🪴 Capital and Ideology
My notes from the audio book version ~2021.
Reganomics did not work. They have led to rapid inequality among all modern democratic societies.
The lack of focus on education for all has led to economic decline and a shift in left wing parties to focus on elites rather than everyone.
Private property is a myth. Everything is rented/borrowed for a time nothing is owned.
Everything builds off the past (knowledge or wealth).
Author recommend the following 3 taxes to work in concert:
- Property
- Inheritance
- Income
Progressive forms of these (the more you make the more you pay) rather than regressive (which is what most of the modern world has used since 1980s)
Use these taxes to fund ubi, universal healthcare, and capital endowment (chunk of money given to individuals at age 25).
Strongest Growth ever observed Was During The Highest Progressive Tax Rates in the 40s-60s.
Recommends the following: 60-70% for 10x above average income 90% for 100x above average income
Markets are not sacred
it is always tempting for the most powerful economic actors to defend market forces Yet their defense is selfish and shortsighted as Carl Pallone observed in the great transformation, refer to chapter 10, markets are always socially and politically embedded and their sacralization only exacerbates nationalistic and identitarian tensions this is especially true of the labor and money markets which set wages and interest on sovereign debt
Author says that the specific rates should be debated but says that what we have today is useless.
the next point is especially important it is striking to note that turn out rates are linked to inequality turn out remains high among socially advantage voters but declines among less advantage to voters
The most logical way to proceed would be to establish a capital endowment to be given to each young adult at age 25 say financed by a progressive tax on private wealth by design such a system with diffuse wealth at the base while limiting concentration at the summit
All available evidence shows that comanagement has been a great success it has encouraged greater worker involvement in shaping the long-term strategies of employers and counterbalance the often harmful short term focus of shareholders and financial interests it has helped Germanic and Nordic countries to develop an economic and social model that is more productive and less inegalitarian then other models it should therefore be adopted without delay in other countries and it’s maximal version with half of the board seats in all private firms large or small given to workers
There is an urgent need for debate on the fiscal financial an institutional arrangement necessary to reschedule the debt because it is details like these that determine whether debt reduction comes at the expense of the wealthy by way of a progressive wealth tax for example or of the poor by way of inflation the social demand to do something about the debt may be confused but it is also legitimate and the response should be not to shut down debate but rather to open it up and all its complexity
From the vantage point of 2019 the effects of Reagan’s reforms seem quite dubious growth of per capita national income fell by half in the three decades following Reagan’s term compared with the previous three or four decades since the goal of the reforms was the boost productivity and growth this can hardly be counted as satisfactory outcome in addition inequalities skyrocketed so much so that the bottom 50% of the income distribution has seen no income growth since the early 1980s which is totally unprecedented in US history and fairly uncommon for any country in peace time
a just society is one that allows all of its members access to the wide as possible range of fundamental goods fundamental goods include education help the right to vote and more generally to participate as fully as possible in the various forms of a social cultural economic civic and political life a just society organizes Socio economic relations property rights and the distribution of income and wealth in such a way as to allow its least advantage to members to enjoy the highest possible life conditions a just society is no way requires absolute uniformity or equality
A just society must be based on universal access to fundamental goods foremost among which are health education employment the wage relation and deferred wages for the elderly and unemployed
To summarize the democratic party like the parties of the electoral left in France changed its priorities improving the lot of the disadvantaged ceased to be its main focus instead it turned its attention primarily to serving the interests of the winners in the educational competition
research has shown that both parties tend to respond more to the preferences of elites than to those of more modest voters this neglect feeds into what…Kramer calls the politics of resentment among more modest voters.
The idea that strictly private property exist and that certain people have an inviolable natural right to it cannot withstand analysis the accumulation of wealth is always the fruit of a social process which depends among other things on public infrastructures such as legal fiscal and educational systems the social division of labor and the knowledge accumulated by humanity over centuries under such conditions it is perfectly logical that people who have accumulated large amounts of wealth should return a fraction of it to the community every year ownership thus becomes temporary rather than permanent
since at least the 18th century and the age of Atlantic revolutions we have known that the power to levy taxes is the quintessential parliamentary power setting tax rules deciding who and what can be taxed and how much requires free and open public debate under the watchful eye of citizens and journalists all shades of opinion in every country need to be fully represented by its very nature a council of finance ministers cannot satisfy these requirements
The question is not so much whether an item of property is a shared natural resource or a private good developed by a single individual as all wealth is fundamentally social indeed all wealth creation depends on the social division of labor and on the intellectual capital accumulated over the entire course of human history which no living person can be said to own or claim as his or her personal accomplishment
In my view there is no real justification for indirect taxes except when necessary to correct an externality, as in the case of the carbon tax…they should therefore be replaced by taxes on income or wealth. An externality occurs when the consumption of a good or service by an individual imposes undesirable costs on other individuals. Typically by way of pollution or greenhouse gas emission. Indirect taxes such as the VAT do not allow taxes to be a portion as a function of income or wealth which is a major limitation in terms of both economic and democratic transparency.
Strongly Progressives taxes do not block productivity. If the top rates only apply to the top most percent.
Reduced wealth inequality leads to strongest growth seen in America.
And early 20th centuries and this reduction of inequality open the way to stronger growth and ever before at a minimum they should convince everyone that a very high level of inequality that existed before World War I was a no way necessary for growth as much of the elite claimed at the time everyone should also agree that the conservative Reagan revolution of the 1980s was a failure