1. Surely Piketty means Jersey, not New Jersey, at the end. Unless the transcriber got it wrong.
2. I like the idea of a progressive wealth tax that's negative at the bottom; if it's in Piketty's book I haven't come to it yet.
a progressive wealth tax
So... the more debt you have the higher the income you are given? This seems problematic.
That was really interesting. Funny that my first thought was "what will this do for Brad DeLong's mental health."
Howdy y'all
Wallerstein, End of the World, 1999
It is widely thought that the collapse of the Communisms in 1989 marks a great triumph of liberalism. I see. it rather as marking the definitive collapse of liberalism as the defining geoculture of our world-system. Liberalism essentially promised that gradual reform would ameliorate the inequalities of the world-system and reduce the acute polarization. The illusion that this was possible within the framework of the modern world-system has in fact been a great stabilizing element, in that it legitimated the states in the eyes of their populations and promised them a heaven on earth in the foreseeable future. The collapse of the Communisms, along with the collapse of the national liberation movements in the Third World, and the collapse of faith in the Keynesian model in the Western world were all simultaneous reflections of popular disillusionment in the validity and reality of the reformist programs each propagatedAfter 1848, the pre-1848 differences between
so-called liberal and so-called conservative political forces diminished radically as they tended to come together on the merits of a reform program, although of course there continued to be debate about the pace
of reform and about the degree to which it was useful to preserve the veneration of traditional symbols and authorities.The movements of the Third International, the so-called Communist parties, came to control a third of the world's surface, that of the East. In the West, the movements of the Second International were de facto in power everywhere, to some extent literally and usually for the first time, and indirectly the rest of the time insofar as the parties of the right fully acceded to the principles of the welfare state.
They served as the moral guarantor of the state structures. Insofar as the movements are losing their claims to support, because they can no longer offer hope and certainty, the mass of the population is becoming profoundly anti-state. But states are needed most of all not by reformers and not by movements but by capitalists. The capitalist world-system cannot function well without strong states (of course, always some stronger than others) within the framework of a strong interstate system. But capitalists have never been able to put forward this claim ideologically because their legitimacy derives from economic productivity and expansion of general welfare and not from either order or the guarantee of profits. In the last century, capitalists have relied ever increasingly on the movements to perform on their behalf the function of legitimating the state
structures.
Shorter, this time is different, cause this time we gonna get collapse combined with a disillusionment about strong states and collective action. Piketty's tax on wealth requires spending on common goods, an idea whose time has passed. Therefore the tax revenues are likely to be redirected toward the top of heterogeneous hierarchies, as most social
spending currently is. If he could even get such a tax passed.
Graeber may be closer, because frankly Jubilee may imply the death of the state, as the "executive committe of the capitalists." He doesn't really need to explain how to get there or what happens after, cause Anarchy!
Not a knock on Graeber. Anarchy is where we are going anyway.
2 was kneejerk. Pls ignore.
3 was also my thought.
2: I don't think that would encourage debt any more than progressive income tax discourages work - you'd probably have to take on $100K of debt to get another $1,000 annual payment or some such. Would make debt cheaper, but not a net positive.
Sorry, started writing 6 back before 3 was there, got pulled away and didn't refresh before completing.
6: The tax on positive wealth would have to be greater than the corresponding payout on an equivalent amount of debt, or else you could set up a corporation, loan money to yourself at little or no interest, and on net get a tax break (and then you could still use the money, which would make it better than a normal investment). Err, that's probably not quite right, but I think you get the idea.
8 before refreshing and realizing we weren't following this thread any more. Ignore me.
Isn't the debt of the income-poor rather different and harder to compensate than middle class debt? A lot of middle class people are net debtors because of their mortgage. That seems pretty possible to claim a tax break or credit or something on, in fact mortgages are already subsidised in various ways. Getting a payment to a low income credit card debtor is harder but maybe possible. Pawn shops seem out of reach in any individual way, beyond regulating the interest.
10 supposed to be responding to the idea of progressive state support on net negative wealth.
Also I have to say moral hazard at this point, it is a real thing.
I never read Graeber because I was afraid Brad DeLong would come to my house and yell at me if I did. I never read Piketty because it was just so long and somebody is going to summarize it for me.
I think what happened is?
a) point by Eggplant
b) bob
c) Eggplant disavows point
d) discussion of Eggplant's disavowed point
e) Eggplant says goddamn it
f) thread excommunicated
g) Moby
Yeah, I kind of smothered this thread in its infancy. Too bad; it's an interesting conversation.
d) exhausted the soil and no further flowers of discourse may bloom.
It'll pick back up. Friday afternoons and evenings are slow.
I don't understand what happened here?
I'm glad somebody asked, I had been confused as well.
I do wonder, about a progressive wealth tax, how much additional bookkeeping requirements it would create. I like the idea (and realize that it's never going to happen anyway) but I do wince a little bit at the idea having to produce a document of my debts and assets every year.
I know that we've had this conversation before (possibly related to the estate tax) and that, broadly speaking, it isn't that much of a problem. But it would still give me pause.
I thought some code word had been uttered and everyone knew to stop commenting on this thread. I should have known that yinz weren't capable of that kind of coordination.
I think Piketty kind of mopped the floor with Graeber, to be h.
26: Yeah, Graeber doesn't seem a very clear thinker.
As to the moral hazard point (my initial reaction), I guess a progressive tax that goes negative simply means lower borrowing costs for the poor and lower returns for the wealthy. Conceived this way it's hard to see a problem, especially since this would just serve to counter the existing disparities in costs and returns.
Obviously, one wouldn't let it become so negative as to turn large debt into a net source of income.
I kind of like the idea of turning large amounts of capital into white elephants, though.
The people that get screwed by debt to me are mostly the poor, though, who don't have much debt or wealth in absolute terms, but debt : income can quickly become horrific. So I get the argument for negative income taxes or Citizen Basic Income, but the debt side seems better handled by regulation and enforcement of the low end retail loans, ie credit card and pawn shops. Maybe oblige credit card companies to report vulnerable customers and
Doing a yearly tally of debts and assets as a taxpayer is an overhead and an intrusion ... I think this can be limited by a generous zero rate bad for a wealth tax. 1 million is a big round number that jumps out. Maybe oblige reporting at 500k net or when any one asset or debt exceeds 1m.
It's interesting to see Piketty in the context of James C Scott's Seeing Like A State, though. Scott describes all sorts of ways that states expand the measurement and standardisation of societies for tax and policing purposes, like the way Paris was redesigned in the 19th century to make riot suppression easier, or the way surnames in the Philipines were imposed by Spanish colonial government.
Piketty is proposing an extension of that project of legibility and control, and one side effect would be a lot more people have to know their net assets, and report them. Extending that to the poor implies its availability as a lever of control. Eg We're suspending your benefits for revaluation after we noticed you paid off your credit card debt / ran up a big debt this month paying for your mother's medical bills and funeral.
Most of your critique applies to income taxes as well. Shall we do away with them to avoid the overhead, intrusion, and specter of control? That being said, I agree that the effects of wealth taxes would be small compared to progressive income taxes (to level the income distribution for the majority), steeply progressive wealth taxes (to limit the power of the 1%), and estate taxes (to prevent dynasties).
I do wonder, about a progressive wealth tax, how much additional bookkeeping requirements it would create.
Well, we already document the value of assets on many official occasions besides estate tax (estate tax, as you said, but also property tax, capital gains tax, etc.), so I don't think it would be a lot more in terms of bookkeeping. And whereas stock and real estate fluctuate in value based on the market, household debt tends to be denominated in dollars and fluctuate mostly based on interest rates and payoff amounts, so assessment is less fraught.
It seems I forgot to mention I actually like the idea of a wealth tax, even if I look forward to a wealth tax return about as much as I look forward to my current one.
And yes, similar arguments could have been made about income taxes in the early 20c, or the introduction of compulsory ID cards and requiring they be carried at all times. They are both state tools of legibility and control.
It seems I forgot to mention I actually like the idea of a wealth tax
I wasn't accusing you of going full Republican.