Capital in the Twenty-First Century, by the French economist Thomas Piketty, is the subject of my column this week. Please check out the column at Reason (here) and the New York Sun (here).
I may have been too generous to the book in my column, but I did find the sections on family size and immigration and growth to be quite illuminating. To summarize and oversimplify slightly, he's concerned about increasing wealth inequality, and his solution is an eighty percent top marginal tax rate on income and a five to ten percent annual top tax rate on capital. But he also makes the point that larger families and more immigration could slow or reverse the trend of increasing wealth inequality. One possible conservative response to Professor Piketty's book would be to say, you know what, we agree with you that increasing inequality is a problem, but our side wants to address it by population growth rather than by confiscatory taxation.
Another response — which I use sometimes when I talk about this on television — is to point out that there are all different kinds of inequality. Mr. Piketty's focus on what he calls "the arbitrary inequalities of inherited wealth,' and his obsession with eradicating them, or at least reducing them, via confiscatory taxation. But people have all kinds of non-monetary inequalities that are just as arbitrary and just as inherited as wealth is, and may be even more important. The professional football playing ability that Eli and Peyton Manning learned or got genetically from their father Archie Manning is just as important as any money that they got from him. Some parents may be rich financially, but be bad parents in other ways; other parents may be poor financially but good in other ways. Some parents may pass along genetically-linked diseases to their children. Other parents may pass along movie-star or fashion-model looks to their children. Some may pass along both movie-star looks and genetic diseases. People focus on wealth inequality or income inequality because it is more easily measured, and perhaps more easily rectified, than other sorts of inequality. But maybe a more realistic and productive view of it is to look at it not as inequality, but as diversity, just one of the many ways — and not even necessarily the most important way — that we all go though the world with certain strengths and certain weaknesses, certain advantages and certain disadvantages.
