Wednesday, November 4, 2015

Another Billionaire Concerned About Inequality

Bill "Concerened About Inequality" Gates in front of his home.

This is as goofy as it gets. Bill Gates, who generally ranks as one of the top three wealthiest people in the world, is concerned about inequality.

Yup.

And to prove he is serious, he tells us that has read one of the goofiest books out on capital and inequality.

Gates writes:
 A 700-page treatise on economics translated from French is not exactly a light summer read—even for someone with an admittedly high geek quotient. But this past July, I felt compelled to read Thomas Piketty’s Capital in the Twenty-First Century after reading several reviews and hearing about it from friends.
I’m glad I did. I encourage you to read it too, or at least a good summary, like this one from The Economist. Piketty was nice enough to talk with me about his work on a Skype call last month. As I told him, I agree with his most important conclusions, and I hope his work will draw more smart people into the study of wealth and income inequality—because the more we understand about the causes and cures, the better. I also said I have concerns about some elements of his analysis, which I’ll share below.
I very much agree with Piketty that:
High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal.
Capitalism does not self-correct toward greater equality—that is, excess wealth concentration can have a snowball effect if left unchecked.
Governments can play... extreme inequality should not be ignored—or worse, celebrated as a sign that we have a high-performing economy and healthy society.
It seems that the only important dispute Gates has with Piketty is as to how to tax us non-billioanires:
Piketty’s favorite solution is a progressive annual tax on capital, rather than income... 
But rather than move to a progressive tax on capital, as Piketty would like, I think we’d be best off with a progressive tax on consumption. 

For the problems with Piketty's take see Piketty's Strategic Victory.

  -RW

5 comments:

  1. Oh, my gawd... what an ignoramus.

    ─Capitalism does not self-correct toward greater equality—that is, excess wealth concentration can have a snowball effect if left unchecked.─

    That's a feature, Mr. Gates - not a bug. There's no "self-correction" towards greater equality because the natural state is not equality, as long as there are humans alive.

    ─extreme inequality should not be ignored—or worse, celebrated as a sign that we have a high-performing economy and healthy society.─

    That is merely your opinion, Mr. Gates. If you mean that fortunes should not be made through nefarious means like cronyism or rent-seeking, then we would be in agreement but that is not what Piketty is talking about.

    ─Piketty’s favorite solution is a progressive annual tax on capital, rather than income─

    And since he's the expert.... well, well!

    Except that a tax on capital would mean *less* capital available to invest. Why would that be a good thing or why would Mr. Gates (and Piketty for that matter) think that a progressive tax on capital or consumption be better than a tax on income I have no idea, but sounds to me more like an opinion on which is better, if a beating or waterboarding.

    ReplyDelete
  2. Gates seems to have completely forgotten how he got started. I guess when you get to be that rich you are surrounded by sycophants and you start to believe that every piece of nonsense that comes out of your mouth is sagely. Every thought profound.

    ReplyDelete
    Replies
    1. When they get that wealthy they are more concerned about preventing other people from catching up to them.

      Delete
  3. What do you expect from the "intellectual property" welfare queen? He owes his success to the State. Now that he made it, he wants to preserve his benefactor and its status quo by promoting more looting.

    ReplyDelete
  4. Gates was a programmer. A techie. He was brilliant at doing something amazingly lucrative at the right time with the right idea in a highly specialized area. Outside that I don't see him much different than anyone else. Same for Ted Turner, Donald Trump etc. Having riches or high IQ does not mean the person has wisdom. Gates it seems to me has wisdom deficiency and common sense deficiency disorders. Same for George Lucas who executed on one great idea... then came Jar Jar Binks and Howard the Duck. Go figure.

    ReplyDelete