The most obvious example of this is the debate, such as it is, over immigration policy in America. After more than a half decade of high unemployment, Mark Zuckerberg, Bill Gates, Michael Bloomberg, Rupert Murdoch, and Mexican oligarch Carlos Slim continue to use their media and political dominance to demonize those who stand up for the American people in opposing the Billionaires United front for cheap labor and expensive phone calls back home to Mexico.
But, if you go to Google and type in
Piketty immigration
You get:
[cough]
[cricket chirps]
Most of the handful of references are gingerly ones from outer edges of the Steveosphere like Marginal Revolution and Ross Douthat at the NYT. Outside that, the notion that there is any relationship between the rich getting richer and massive immigration simply doesn't register. If we did a brainscan of the typical economic pundit's response to the concept "Piketty and Immigration," you'd just see a flat line on the monitor.
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The graphic is so appropriate.
In fairness, Piketty's book did get reviewed in today's Wall Street Journal, although obviously with the conclusion that it was crazy and fantastical.
Don't remember who the reviewer was, but it was a lot of point and sputter towards things that would make a long-time Steve Sailer reader go, "Wait, that actually sounds kind of nice."
How many immigrants attended the école normale supérieure that Piketty graduated from in France? My guess would be very few. If you never compete with immigrants for jobs, then it is easy to forget about them.
David Frum today on Twitter
https://twitter.com/davidfrum/status/458633505266991105
Aspergery nitpick of the day (sorry!):
Brainscans look like skull cross-sections with colored blobs in them. No brain activity, as in the case of those economists, would just show (I'm guessing) the hollow skull cross-section.
Piketty's position on immigration is worse the silence. His big idea is that we are on the road to inequality hell if r, the rate of return on capital, exceeds g, the rate of growth in the economy. This isn't per capita growth or productivity, which are what matter for living standards, but just economic growth, which rises with population growth. He has explicitly said that he wants to increase the population size in order to lower inequality. Below is a very critical take from leftist economist Mark Weisbrot:
"...as Piketty emphasizes - the slowdown in population growth lowers g, and therefore increases the concentration of wealth. Here is my last disagreement with Piketty: he describes the slowdown in population growth as 'frightening' because of its impact on wealth distribution. But it is also - especially in the high-income countries - one of the most important changes that is necessary to avert global climate disaster. And it also has a positive effect on living standards and income distribution: all other things equal, lower population (and labor force) growth increases the bargaining power of labor, and in any particular country, it increases the potential for everyone to have higher living standards with given levels of productivity growth."
Actually, Steve, if you read the book you'll see that Piketty interprets mass immigration as a force that *counteracts* plutocracy. It's at the end of the book.
Too bad Piketty couldn't have had a little talk with Samuel Gompers.
Basically, every billionaire either thinks mass immigration is in his financial self-interest or thinks almost all the other members of the Billionaires Club think that (conversely, can anybody name any billionaires who are publicly active in restricting immigration?)
So, Piketty thinks he knows better than the billionaires about what's in their bank accounts' self-interest when it comes to immigration policy? Is he some kind of maroon?
Piketty is associated with the French Socialist Party and French President Francois Hollande.
So yeah, he's probably open borders all the way.
I'm not saying he's right. I think he's confusing endogenous demographic growth with mass immigration. And it's an extremely short section of the book, casually argued compared to the rest of it. Anyway, you should read the relevant sections.
Here:
http://finance.fortune.cnn.com/2014/03/05/immigration-us-economy/
Thomas Piketty, the French economist responsible for compiling much of the data driving today's debate over growing wealth and income inequality, raises this issue in his forthcoming book, Capital in the 21st Century. He points out that immigration is also the primary reason the U.S. has, for much of its history, avoided the large and unequal concentrations of private wealth that developed in Europe. He writes:
[Immigration] was the great contribution of the United States to global redistribution: the country grew from a population of barely 3 million at the time of the Revolutionary War to more than 300 million, largely thanks to successive waves of immigration. That is why the United States is still a long way from becoming the new Old Europe ... immigration is the mortar that holds the United States together, the stabilizing force that makes increasingly large inequalities of labor income politically and socially bearable ... for a fair proportion of Americans in the in the bottom 50 percent of income, these inequalities are of secondary importance for the very simple reason that they were born in a less wealthy country and see themselves as being on an upward trajectory.
If you read the conclusion of the CNNMoney article, you'll see that the author makes a complete non-sequitur hash of a paraphrase of what Piketty is saying.
they are somewhat connected, immigration into the US and the wealth of the 0.1%. but what really is accelerating the increase in the wealth of the 0.1% relative to everybody else:
1) the federal reserve printing 85 billion US dollars per month, every month (down to 'only' 65 billion a month now) for year after year. most of that money goes directly into the pockets of the 0.1% one way or another.
2) population growth OUTSIDE the united states. this creates customers for the companies which these billionaires own and run. you can only increase market share so much in the US, but if you step outside the US, there is a world with billions of new customers waiting for your stuff, with few domestic competitors.
that world of customers grows by a higher percentage every year than the number of available customers in the US. economic growth in those countries outpaces US economic growth by 2% to 8% yearly. better to take a slice of that action in 10 other nations all at once than limit yourself to your yearly portion of the US growth of 1% to 2%.
Piketty interprets mass immigration as a force that *counteracts* plutocracy
So he's for it
Piketty's like the new BHL apparently.
Is Piketty just plain ignorant of American political history?
It was the plutocracy that wanted mass immigration in America in, say, 1865-1924, while it was the pro-middle class guys who wanted to restrict it. The explanation for how immigration restriction makes for a more prosperous middle class were pointed out by the founding Founding Father Ben Franklin in 1754.
The bogus big idea of the 90s was that a lot of finespun econometric Data had now proven well-meaning libertarian Trekkie ideology about "immigration being good for everyone," therefore that anybody in a sub-Bloomberg/Rove bracket who opposes unscreened unintelligent importation of assorted peasants must be afflicted by false consciousness. But the counterpoint has never been dependent on elaborate doctoral research, just enough imagination to believe zillionaire urbanites don't give a crap about the fallout from policies which tend to hurt people further down from them (compare with the dime-a-dozen academic studies that conclusively, repetitively invalidate abstinence lectures in schools)
I think after Lehman Brothers in 2008 boosted the market for anti-elite sentiment, the amnesty lobby and Cato think-tankers were gravitating back to special pleading and irrational emotional appeals, to surface in speeches by Bill Clinton and Haley Barbour and also Jeb's new album "Act of Love"
Guys lusting after greater power, whether they're gauche jocks trading bonds or 99th percentile leftist celebrity academics, always seem to know what's best for you. For a humorous non-French example I recommend the part in the Tuesday column at Best Of The Web Today dealing with Jedediah Purdy, whom I'd completely blissfully forgotten till now; the guy became a freaking law school professor.
It appears Picketty is conceding that:
A. Equality means everyone makes do with less
and
B. Third World immigrants are a net drain.
Let's figure out how to use these concessions by the eminent lefty.
In contrast, Ha-Joon Chang's book "23 Things They Don't Tell You About Capitalism" goes on at length about the immiserating effects of immigration, arguing that an important reason Swedish bus drivers are paid so much more than Indian bus drivers is immigration restriction and pointing out that this disparity would vanish under open immigration. Even more astonishingly Chang grants that countries have the right to restrict immigration. The Guardian reviewer called the book a "masterful debunking" of capitalist myths but could not bring himself to mention the word immigration even once. A favorable Huffington Post review was more generous: it actually managed to utter the word "immigration" - but only in the casual context of saying the book had plenty to offend Democrats as well as Republicans.
I mean, Piketty appears to say immigrants get a share of the pie, so they're better off than they were in their home country, while natives have to give up a share of the pie, so there is more overall "equality" perforce. What else is the meaning of his assertion that more people = more equitable distribution of goods? I assume he isn't saying more people = increased production, because increased production is not the same as a more equitable distribution of goods (not in any viewpoint of the political left, certainly). So I think we have the spectacle of an economic writer saying that adding more people to an economy through immigration from poorer economies is a good because it tends to be leveling and leveling ("equality") is the highest economic good. His words about immigration's causing America's historic economic growth are just pablum to get the ignorant reader to think: "he's a pro-economic-growth guy."
(conversely, can anybody name any billionaires who are publicly active in restricting immigration?)
Yes, Haim Saban and Sheldon Adelson. Both support restricting immigration into Israel.
Why aren't Korean and Japanese billionaires promoting immigration into their homelands?
So it's a case of "new Piketty which?".
(Collectors of 1970s British music trivia might have a clue of what I'm on about).
To thise who don't know, (which It reckon is all of the iSteve readership, including Steve), New
Picketywitch, were a particulary bland, middle-of the-road, British pop group of the 1970s, a neutered version of the New Seekers, if you can imagine that. All Laura Ashley prints, shoulder length hair, (on the men),the type of castrated 'pop group' that your 1920's born Dad might actually have approved of.
Anyway, what sticks in my mind about New Pickettywitch, apart from the ridiculous name, was the on-going 1970s tabloid British press marathon concerning their laed singer one Sheila Rossall, the girl of whom it was said was 'allegic to the 20th century'. In short she couldn't, it was said, eat anything, drink anything or breathe anything, and lived, perpetually in an oxygen tent. It was an on-going saga in the Sunday tabloids. The martyrdom and crucifixion of Sheila Rossall. 'Total Allergy Syndrome' it was called. Actually, I don't know much about their music, all I remember is Sheila Rossall. What has stuck in my trivia obsessed mind all these years - this is the mid '70s I'm talking about when I was 'knee-high to a grasshopper' was a line in article I read about her ongoing travails. Apparently, the paper said, the only food she could possibly hold down was either "lion meat" or "bear meat". This struck me - and the notions of the procurement and 'testing' as so damned bizzare that it's haunted me ever since. I still think that I've dreamt it up.
Apparently lion or bear meat was the only food 'uncontimanited' by the chemicals of the 20th century.
The rate of return on capital exceeds growth is what he says. The 20th century was an exception because of the wars "capital was destroyed, taxed or nationalised to pay for the war effort and the building of public services and social security."
According to Paul Collier, author of Exodus, economists are entranced by immigration into the West from poor countries because it leads to an gigantic increase in the immigrant's productivity. So they strain every fibre to prove it does not damage the interests of the population of the rich country. But really they are calculating with unspoken assumptions of global utility. As the indigenous population loses less than the immigrants gain, it is a no brainer for economists.
In practice the rich minority in receiving countries get the benefit of the immigrant's gain in productivity so they are becoming super rich. And the super rich alone have the resources to get their way in the political process.
With one exception: foreign policy considerations, which trump all else. (The Depression only really got started because the French state used its reserves to destroy Germany's largest bank to stop an Austro German currency union.)
A conflict with Russia could be a good thing. I don't think anything can possibly work at this stage unless it is of truly cataclysmic proportions.
The last page of this weeks(4/21) Barron's is all about Piketty. Thomas G. Donlan talks about the book. Donlan seems to say Piketty advocates wealth being controlled by democratic governments and not private citizens but Donlan thinks democracies can be corrupted.
He concludes,"Experience teaches that rulers concentrate wealth for themselves as effectively as wealthy people concentrate power for themselves. The questions for nations is to choose equitable misery or unequal wealth."
But what about the 'virtuous circle' that Hedrick Smith yaks about in 'Who Stole the American Dream?' I think of the virtuous circle as Henry Ford doubling the wages of his workers so they could buy the cars they made.
The worst has been the H1b vista which is also supported by a lot of Republican politicians. A lot of native born whites have lost their jobs to the H1b and the jobs eventually go to India through outsourcing companies. In fact most of the right have been silent when the native born lose even better paying jobs in the tech field rather than the illegal immigrants that take lowering paying job with the exception of construction.
" immigration is the mortar that holds the United States together, the stabilizing force that makes increasingly large inequalities of labor income politically and socially bearable" - He wrote this and wasn't joking about it. Terrifying.
You might be interested in this story since it is on topic:
McDonald's accused of favouring foreign workers
Today McDonald's suspended the programme due to the bad press and a government investigation. This temporary foreign worker programme scandal came to light following an investigation by the leftist CBC.
As a lefty, Piketty should have read Werner Sombart's "Why Is There No Socialism In The United States?" from 1906.
Sombart suggested that waves of immigration prevented the American working class from developing a coherent, unitary narrative of working-class solidarity based in shared memory of common struggles. Race, rather than class, became the more defining feature of identity.
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