In Anti-Piketty, the author's claim that the statement

"If the supply of any good is insufficient and it's price is too high, then demand for that good should decrease which should lead to a decline in its price"

is a misunderstanding of Freshman economics seems more of an ad hominem attack, which has led me to want to understand further if the attack is valid.

If this is such a basic misunderstanding of microecon 101, then how would Piketty be a renowned economist?

  • This is quite hard to say without knowing the context of the quote. E.g. I have no idea what is meant by "should" in this sentence. – denesp Aug 13 at 13:30
  • @denesp what are the possible interpretations and their implications? – Anthony Peter Aug 13 at 19:54
  • 2
    "I have no idea." Could you possibly quote the paragraph from Piketty where this appears? – denesp Aug 13 at 19:55

Thats Tom Palmer and what he is saying is that his high school professor taught him not to confuse a shift in demand curve with movement along the demand curve.

I will put this in my own words for you. If there is not enough supply of a good to meet demand, Piketty is saying the price should drop and I would agree denesp, where is this should coming from? If there is a demand for a product, but not enough supply, then the price should and does increase, not drop, because this makes this product scarce and its scarcity gives it value.

So like if everyone could turn lead into gold then gold would drop in price because it is not longer scarce to mine, everyone can turn lead into gold in the comfort of their own homes.

Palmer is just saying, hey, I read this analysis of supply and demand of Piketty, basic high school stuff and he could not even get that one right.

Its just a way to introduce that he is about to tear Piketty's theories a new one.

But as someone who has followed Piketty's work, allow me to address what Anti-Piketty, the book, is really addressing so that other readers can get a more robust understanding here of what Anti-Piketty is about.

I have followed Piketty's taxation/social welfare solutions to wealth inequality and I have found that it does nothing to change the source of systemic inequality, debt-based neo-feudalism and neo-colonialism.

Now, just because there may be a mass of people like myself that disagree with him, does not mean Piketty would not be a renowned economist.

Especially when is tax the rich solution, would, instead of being resisted by the super wealthy and creating waves, they could just as well agree with it and ensure through their power and influence that is the middle class or those beneath them who get the brunt of this taxation policy. At it also lets them off the hook because they showed that they are on board with Piketty, so not all filthy rich are that bad after all.

What Piketty is known for is his book Capital in the Twenty-First Century.

Piketty addresses wealth inequality in that book, that's what he is popular for. In his book he is proving that capital expands at rates far above the overall economy and wages. Since capital grows much faster than wages or the underlying economy, the gap between earned income and unearned income (rents) widens, along with the net worth of those who own capital and those who own little to no capital.

I do not disagree with this argument, in fact, I have provided answers in other questions in this forum with charts confirming the above.

What Piketty recommends as a solution is a global wealth tax which I believe is close to impossible to implement and that's where we part ways and Anti-Piketty steps in.

I would go further and say it is impossible within the U.S., never mind the world, as the top 0.1% own the political machinery. Why would anyone who owns the political process agree to tax themselves?

The dangers of any economist suggesting another tax the rich idea, is that this never falls on the doorstep of the super wealthy because they have all the resources and power to block these kinds of policies towards them, the upper middle class, however, do not.

So politicians will say, hey look we successfully implemented a tax the rich plan, when in actuality, its taxing the middle class and the politicians get their votes and the middle class get screwed, again, because they have no voice or political power like the super wealthy do.

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