Deirdre McCloskey: Piketty’s Ethical Myopia

Polymath economic historian Deirdre McCloskey advances a devastating, plain-language critique of Thomas Piketty’s Capital in the Twenty-First Century. Beyond exposing Piketty’s poor grasp of basic economics and the role of human capital, McCloskey argues that his biggest failing is an ethical one—focusing on the distribution of wealth instead of the absolute well being of the poorest among us. >>>

LINK: How Piketty Misses the Point (by Deirdre N. McCloskey in Cato Policy Report)

The central problem with the book, however, is an ethical one. Piketty does not reflect on why inequality by itself would be bad.
…
[H]e misses the main act. In focusing solely on the distribution of income, he overlooks the most surprising secular event in history: the Great Enrichment of the average individual on the planet by a factor of 10 and in rich countries by a factor of 30 or more.

This includes a gigantic improvement of the poorest — your ancestors and mine. By dramatic increases in the size of the pie, the poor have been lifted to 90 or 95 percent of equal sustenance and dignity, as against the 10 or 5 percent attainable by redistribution without enlarging the pie.
…
The original and sustaining causes of the modern world were indeed ethical, not material. They were the widening adoption of two new ideas: the liberal economic idea of liberty for ordinary people and the democratic social idea of dignity for them. This, in turn, released human creativity from its ancient trammels.

What do you think?

Brought to you by: