Anti-Piketty

'Capital in the 21st Century'
Considering the world-wide impact of the book 'Capital in
the 21st Century', by French economist Thomas Piketty,
and its meaning for social priorities and goals, I am pleased
to send you my attached evaluation of this book. I hope
this will inspire your reflections about the moments we are
going through. Kind regards,
Ronaldo Campos Carneiro – June 2014
Brasília – DF – Brasil
About Piketty’s Book on Capital –
The Answer of a convinced Liberal
After fifteen years of research (1998-2013) aimed at
understanding the historical dynamics of income and wealth
in around 20 countries, mainly in the last 200 years,
analysing remarkable facts about humanity such as the
industrial revolution, world conflicts and economic crises,
using and harmonizing data broadly accepted by credible
institutions like the World Bank, the UN and the IMF, this
French Professor at the Paris School of Economics, Thomas
Piketty, aged 43, came to the conclusion that:
Capitalism, or what is left of it, just as it is now put
in practice or crony capitalism is heavily
concentrating income and wealth, in a process where
the rich get richer and the poor get poorer. Estimates
for the XXI century are alarming and define human
coexistence as unfeasible under the rules prevailing
nowadays.
The current market competition is like an athletic
race in which some are well fed and have access to
health assistance and education, whereas crowds of
excluded are left far behind: the minimally decent
atitude is to place them on the same starting line or to
equal their opportunities at the beginning of the race.
“The 85 richest people in the world, who could fit into a
single London double-decker, control as much wealth as
the poorest half of the global population– that is 3.5 billion
people”.
“Strong inequality is corrosive of growth; it is corrosive for
society. I believe that economists and politicians
ignored inequality for too long.” (Christine Lagarde,
Executive Director of the International Monetary Fund)
I personally think that these conclusions are irrefutable. No
scholar will, after Piketty’s research, ignore the enormous
social exclusion generated by capitalism, or the urgent
need of actions to revert this dramatic situation. Inequality
is complicating the market economy. One must never
forget that the economy depends on supply and demand –
it is useless to have supply facing a reduction in demand, or
vice-versa. No one, but a liberal dreamer, can imagine that
the economy will operate with supply only! Economics is a
science where agents are regulated by the inexorable
law of supply and demand. Politics is an art where
the human will prevails. This is the reason why they
cannot blend: economics and politics have diferent natures.
My complete agreement with Piketty’s conclusions also take
me to a complete disagreement with his
recommendations of a progressive tax and a global
tax on wealth. This would be a shortcut to hell: it
would mean more government, bureaucracy, war,
corruption or, in the economic view, it would transfer assets
from the domain of supply and demand to the changing
human will of bureaucrats and politicians – an antechamber
to hell. Nothing is more predatory than the action of
governments in the economy – indebtedness is what
governments know how to do, and they do it unreservedly.
“Deficits mean future tax increases, nothing less. The
increase of deficits must be seen as a tax on future
generations, and the politicians who create deficits should
be judged as tax generators”. (Ron Paul, former US
Senator – Republican).
Our generation has been the victim of decisions from past
generations, that increased indebtedness, just like future
generations will have to pay for the inconsequence of our
own generation, that expanded those debts even further.
The European discussion about austerity or
Keynesian stimuli mean to penalize our generation or
our descendants. The problem is that policy makers
search immediate applause, transfering the solution of
structural problems to the future. These are inconsequent
acts, showing no concern with future generations.
“Do not forget that I have found out that more than ninety
percent of all the national deficits, from 1921 to 1939, were
caused by the payment of past, present and future wars”
(Franklin D. Roosevelt)
“People do not make war. It is the governments that
make it” (Ronald Reagan)
I would go back to the time of the American Revolution –
“You will never strengthen the weak by weakening
the strong” – and to the moments when the French
Revolution was promising “liberty, fraternity and
equality”.
Inequality of opportunities in human coexistence has
been generating the most terrible process of
domination and human bondage: the dictatorship of
bureaucracy. The enormous amount of financial resources
under the power of the State, to be allocated by acts of
human will, stimulates an unbridled race of unscrupulous
politicians in search of power at any cost; “They do not
disdain, in certain cases, to associate with cheating,
fraud and corruption”, to use the words of Vilfredo
Pareto.
It would be very efficient and useful if economic
policymakers became convinced that applying more
measures under the same keynesian references they
would come to the same results. We must migrate to
another reference frame if we wish to improve our
development process.
Economic rulers must be aware of the fact that: “If they
do only what they have always done, they will end up
having what they always had”. Piketty’s proposition,
however, is for more of the same, and it would certainly
lead to poor results.
The relation between income and wealth is like a river
flowing to a dam, where income is the variable of flow or
the fluidity of the river, and wealth is the variable of stock
or the accumulation in the dam. They both have the same
nature, because wealth is no more than accumulated
labour, and only labour can generate wealth. Piketty proved
that there are some who harvest without planting, or who
generate wealth with the labour of others; when the rate of
return on capital is higher than the rate of economic
progress, it results in predatory accumulation. This is the
patrimonialist economy, that produces income from
inherited family properties or from political connections: to
be a friend of the king produces more than merit or
competence. It would be risible, were it not tragic, to
imagine that the control of financial flows (currency,
exchange and credit) can generate development, as
suggested by Keynes. Only productive labour can
generate capital.
“Labor exists before, and is independent from capital.
Capital is just the fruit of labor and it would never exist
without the previous existence of labor. Labor is superior
to capital, and deserves much more consideration.”
This truth expressed by Abraham Lincoln must be
recognized by all the zombies who are wandering, lost and
disconnected from the basic concepts of economics.
One must not criticize without a corresponding proposition.
The solution is not among the tools of economic theory, but
in the scope of politics, by means of a broad, full and true
agreement around a new Social Pact, in which nutrition,
health and education will become a responsibility of
the private productive process, after the
corresponding reduction of taxes by the government,
who will also reduce its interference in the economy.
Instead of transferring resources from the rich to the
poor, this pact will equal opportunities concerning
nutrition, health care and education. I do not mean
philanthropy, but a new concept of human labor as a
process of transformation of human energy in physical or
intelectual energy. This would replace the changing logic of
ideas –ideology- by the invariable logic of life – biology. Of
course, entrepreneurs will not act out of philanthropy: full
productive labor will be the broker of this agreement
of wills.
This idea is perfectly simple: Piketty proved that after
centuries of distributive measures in all countries, in
which resources were transferred from the rich to the
poor, the result was more social exclusion.
To prohibit wealth with a ceiling on income, as Piketty
proposes, means to weaken the strong to strengthen the
weak. Better would be, instead of a ceiling on income,
to establish a groundfloor, so as to permit wealth and
prohibit poverty, in an open system that would open the
pressure cooker after the progressive dissipation of
pressure.
Let us equal, for all, the access to nutrition, health
care and education, and liberate all the tools and
values of the market economy.
It was these values that made the West prosperous
since the XIX Century and their efficiency has been
confirmed.
Instead of terming this my proposition utopic, theoretical or
unfeasible, one must keep in mind that the complete
liberation of prices and wages will lead us to full
productive labour, that is: salaries will be ascending
– there will be no need to establish a minimum wage
– imagine the Industrial Revolution, at the beginning of the
XIX Century.
“Governamental institutions:
a) protect the powerful and interest groups;
b) generate hostility, corruption and hopelessness;
c) hinder prosperity; and
d) repress free expression and the opportunities of
individuals”. (IMB – Mises Institute).
I offer, below, some challenges in the scope of this
proposition, for the reader to ponder:
1) the agricultural sector and the reversion of migration
to the cities;
2) health care, education and the power in the hands of
the private sector; profit linked to people health.
3) the financial sector and its incapability in the purchase
and sale of papers having monetary expression.; Christine
Lagarde: “crisis has prompted a major course correction—
with the understanding that the true role of the financial
sector is to serve, not to rule, the economy.
As Winston Churchill once remarked, “I would rather
see finance less proud and industry more content”.
4) the political area and the prevention of speculation
when resources are reduced.
Finally: In a Soccer World Cup or in the Olympic Games,
just imagine how the competition would happen if political
or bureaucratic influences were present in the choice of
teams or in the rules of the games!
“In Hell, the hottest places are reserved for those who
chose neutrality in times of crisis’. (Dante Alighieri (1265-
1321)
Lets learn with the best lessons of Von Mises:
· If history could teach us anything, it would be that
private property is inextricably linked with civilization.
· Those who are asking for more government
interference are asking ultimately for more compulsion
and less freedom.
· Governments become liberal only when forced to by
the citizens.
· Both force and money are impotent against
ideas.
THE GREAT DIVIDE 2014, JUN 27 6:16 PM 793
Inequality Is Not Inevitable
By JOSEPH E. STIGLITZ
“We need not just a new war on poverty but a war to
protect the middle class. Solutions to these problems do
not have to be newfangled. Far from it. Making markets
act like markets would be a good place to start. We
must end the rent-seeking society we have gravitated
toward, in which the wealthy obtain profits by manipulating
the system.
The problem of inequality is not so much a matter of
technical economics. It’s really a problem of practical
politics. Ensuring that those at the top pay their fair share
of taxes — ending the special privileges of speculators,
corporations and the rich — is both pragmatic and fair. We
are not embracing a politics of envy if we reverse a politics
of greed. Inequality is not just about the top marginal
tax rate but also about our children’s access to food
and the right to justice for all. If we spent more on
education, health and infrastructure, we would strengthen
our economy, now and in the future. Just because you’ve
heard it before doesn’t mean we shouldn’t try it again.
Widening and deepening inequality is not driven by
immutable economic laws, but by laws we have
written ourselves”.
Conference on Inclusive Capitalism
https://www.imf.org/external/np/speeches/2014/052714.ht
m
By Christine Lagarde
Managing Director, International Monetary Fund
London, May 27, 2014
“A greater concentration of wealth could—if unchecked—
even undermine the principles of meritocracy and
democracy. It could undermine the principle of equal rights
proclaimed in the 1948 Universal Declaration of Human
Rights.
Pope Francis recently put this in stark terms when he
called increasing inequality “the root of social evil”.
It is therefore not surprising that IMF research—which
looked at 173 countries over the last 50 years—found that
more unequal countries tend to have lower and less
durable economic growth”.
Best wishes,
Ronaldo Campos Carneiro – June 2014
rcarneiro4@gmail.com
http://rcarneiro4@blogspot.com.br
http://ronaldocarneiro.wordpress.com
To understand Piketty’s book:
http://piketty.pse.ens.fr/en/capital21c2 – Paris School of
Economics
CUNY debate with outstanding thinkers
https://www.youtube.com/watch?v=heOVJM2JZxI&feature=e
m-subs_digest-vrecs
Skidelsky’s blog –
http://www.skidelskyr.com/”Skidelsky’sHYPERLINK
“Too Much”: Special Thomas Piketty issue (26 May – Sam
Pizzigati
http://toomuchonline.org/weeklies2014/may262014.html
John Weeks – “Why is ‘Capital in the 21st Century’ (C21C)
Such a Success”? 30 May 2014
Debate Piketty and Senator Elizabeth Warren
http://www.commondreams.org/headline/2014/06/03-1
I also suggest reading the texts on this subject by:
David Harvey (“Afterthoughts on Piketty’s Capital”), plus
Paul Krugman, Dani Rodrick, Joseph Stiglitz, Lawrence
Summers, Robert Solow, James Galbraith.

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From: Thomas Piketty <thomas.piketty@psemail.eu>
Date: 2014-06-13 3:37 GMT-03:00
Subject: RE : Piketty’s Capital – The Answer of a convinced
Liberal
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Thanks Ronaldo, I appreciate it. Best, Thomas

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Thomas Piketty
Ecole d'Economie de Paris/Paris School of Economics
Page personnelle : http://piketty.pse.ens.fr/
From: Thomas Piketty <thomas.piketty@psemail.eu>
Date: 2014-07-02 7:38 GMT-03:00
Subject: RE: Piketty’s "Capital" – The answer of a convinced
liberal
To: Ronaldo Carneiro <rcarneiro@salutecafe.com.br>
Thanks Ronaldo, this is a very interesting reaction! Best,
Thomas

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Thomas Piketty
Ecole d'Economie de Paris/Paris School of Economics
Page personnelle : http://piketty.pse.ens.fr/

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From: Hector Julio Melchiori – june,13,2014
hjmelchiori@gmail.com
Creo que la diferencias comienzan en los tres primeros
años de vida al no tener nivelado el alimento, ya que el
intelecto se relaciona con la primera capacidad de ingesta,
luego ya es tarde.
CREO QUE LA IGUALDAD DE OPORTUNIDADES DEBE
NACER ALLÍ, DESPUÉS MISMA EDUCACION Y MISMA
INSTRUCCIÓN, LA EDUCACION SE DA EN EL HOGAR, PERO
SI TENEMOS PADRES NO EDUCADOS, QUE A SU VEZ SON
HIJOS DE OTROS PADRES NO EDUCADOS , VAMOS PEOR.
POR ULTIMO LA INSTRUCCIÓN SE DA EN LOS COLEGIOS
QUE DEBERÍAN DAR LAS MISMAS POSIBILIDADAES PARA
TODOS, CON ESAS TRES COSAS ARRANCAMOS A UN
FUTURO MEJOR,
ES MI PERSONAL OPINIÓN QUE NO TIENE PORQUE SER
NADA MAS QUE MI VERDAD, QUE ES ABSOLUTA SOLO
PARA MÍ, PERO TODOS TIENEN EL DERECHO A TENER SUS
VERDADES PROPIAS Y PARA ELLOS SERÁN VERDADES
ABSOLUTAS TAMBIÉN,
LO QUE HACE FALTA ES CONCORDAR PARTE DE LAS
OPINIONES DE UN GRAN NÚMERO DE PERSONAS
DISPUESTAS A TRABAJAR PERO QUE SABEN QUE ELLOS
NO VERÁN LOS FRUTOS,
ESO ES PARA LAS GENERACIONES VENIDERAS
"SI TODOS CUMPLIERAMOS CON NUESTROS DEBERES
HABRIA MENOS PERSONAS RECLAMANDO POR SUS
DERECHOS" GHANDI DIXIT.
ATTE. MELCHIORI.

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From: Pedro Schwartz <pedro@pedroschwartz.com>
june,13,2014
Dear Mr. Carneiro:
I find what you say complicated and will think on it.
However, I think Piketty is wrong in his forecast of the
future of capitalism.
Sincerely

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Dhian Chand <mdhianchand@hotmail.com> june.14,2014
2006-7 DG – 3080 District
Shimla Him. Pr. India
Dear PDG Ronaldo Carneiro,
Thank you for sending me your evaluation of Piketty's
Capital – the answer of a convinced liberal. You have
motivate me to buy and read his book "Capital in the 21st
Century". You have rightly concluded in the last four points,
the people responsible to create balance in the social
economic status in the society. However, the question
remained unanswered that politicians and bureaucrats have
no limit for their greed for money and power which
ultimately encourage corruption in the country and war
between neighbouring countries. If we are able to influence
these two category of our society the balance in distribution
of economic growth will be maintained and there will be no
poor in the modern world which due to technology
evolution has become one a global village.
Regards
Dhian Chand

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From: Anthony de Jasay <jasay@wanadoo.fr>
14/6/14
Dear Mr. Carneiro,
I have had your letter of 13 June read to me (as you may
know I have lost my eyesight long ago). I agree with most
of it , but as you must know very well it is not by
condemning politics and politicians for being toxic and
nasty that thay will become any less harmful. They are a
probably inevitable product of one man, one vote.
Yous sincerely,
Anthony de Jasay

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From: Stephen Raudenbush – 13/6/14
sraudenb@uchicago.edu
Dear Ronald
Thanks for sending this. I have admired your work and
made very good use of your book with James Heckman on
inequality.
I do have a few questions
* Why are key elements of Sen's "human development
index" so much better in the European social democracies
than in the US?
* Why have the countries that employed a Keynesian
stimulus done so much better during the recession than
countries that used the recession to reduce government
spending?
I believe you have offered a false choice between heavy
government involvement and light government
involvement. All sides are competing to use the
government to support their own special interest. If the
government does not intervene to insure child care,
education, health, housing, minimum wage, unemployment
insurance, and social security for the elderly, and protect
the environment, the result will not be a utopian laissez
faire society. Instead, government resources will be
directed entirely to prop up agri-business, build roads to
support real estate developers, save failing banks, generate
unneeded contracts for lobbyists, etc. In sum, we will have
neither social democracy nor laissez faire but rather
socialism for the rich, which is pretty much what the US has
now.
Why did you not comment on our extraordinarily corrupt
political system in which running for low level offices now
requires millions of dollars? Where huge firms literally
dictate legislation to the office holders they have
bankrolled?
I would propose a government role that does the good
things I mentioned above while aggressively intervening
against oligopoly and favoritism to insure competition in the
market place. The government can be a friend of the free
market and a friend of meritocracy while insuring basic
necessities, particularly for the children and the elderly, and
supporting human capital development.
Sincerely
Steve Raudenbush

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From: William Anderson – 13/6/14
banderson@frostburg.edu
If these points are true, then are you saying that the vast
amount of people are materially poorer than they were,
say, in 1980? That they have fewer goods and services
available to them now than they had then?
It seems to me that the theories depend upon (1)
homogeneous capital (capital as a lump of stuff that is
useful primarily for how much is spent in creating and
accumulating it), and (2) underconsumption. We have been
getting underconsumption theories at least since “Fable of
the Bees.”
Now, we do have a lot of what is called crony capitalism
today, in which owners of capital, through political
alliances, are able to force resources into a direction that
would not be profitable (or would be less profitable) without
the government intervention. However, from what I can
tell, Piketty is not so worried about this development.
Piketty would prefer lots of people to be poor to make Bill
Gates and a few other people pay more taxes.
If Piketty’s thesis is true, then the vast majority of people
today are poorer than were the people of the early 1800s,
when the development of large-scale capital really took off
in Great Britain and in Europe. Are you prepared to say
that? Think of the logic of his thesis; are you prepared to
claim that a larger percentage of people are poor today
(and living in worse conditions) than were people of the
early 1800s?
Then, to follow Piketty’s logic, the bifurcated returns to
capital (versus ordinary income growth) would have to be
consistent from the very start. Thus, you are having to
claim that the poor today are poorer than the vast majority
of people in the early 19th Century. Can you empirically
justify that statement?

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From: g.reisman@capitalism.net – 13/6/14
Dear Mr. Carneiro:
Thank you for your review of Piketty.
Attached, please find a copy of my review of him, which
I’ve just posted to my blog.
Sincerely,
George Reisman

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From: studiosarpietro@gmail.com
june, 16, 2014
Dear fellow Rotarian Ronaldo Carneiro,
thank you very much. your thoughts on the book of Piketty
are very interesting, especially in this period we are going
through.
I will continue to reflect on this, and I will send it to my
daughter who is studying Economics.
Many greetings.
Salvatore Sarpietro
2007-08 DG – 2110 District

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Benegas-Lynch, Jr., Alberto
National Academy of Sciences, Argentina
abenegaslynch@yahoo.com – june,20,2014
Dear Ronaldo Carneiro, thak you for sending your
papers that I will read with great interest. In the
meanwhile, I copy one of my weakly columns on the
subject. Cordially, Alberto Benegas Lynch, Jr

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From: Jeff Deist
jeffdeist@mises.org – june,20,2014
Excellent, thank you. Jeff

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From: Floy Lilley <floylilley@mises.com>
Date: 2014-06-20 17:29 GMT-03:00
Subject: Re: About Piketty’ s Book on Capital – The answer
of a convinced liberal
To: Ronaldo Carneiro <rcarneiro@salutecafe.com.br>
Hello Mr. Carneiro,
Your enthusiasm for this project is palpable. That's a fine
way to feel about whatever you do.
You embrace Piketty's work in ways that I do not. I do not
find that he proves his thesis.
Thank you for having thought of me.
Best,
Floy Lilley

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From: Rev. Robert A. Sirico <rsirico@acton.org>
Date: 2014-06-21 13:30 GMT-03:00
Subject: RE: About Piketty’s Book on Capital – The Answer
of a convinced Liberal
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Dear Ronaldo:
Your email arrive just as I had begun reading Pikettey’s
book Capital, so I shall now do so with your critique in
mind.
Many thanks,
Fr. Robert A. Sirico,
President
The Acton Institute

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From: Gary North <gnorth@poetworld.net>
Date: 2014-06-23 9:02 GMT-03:00
Subject: RE: About Piketty’s Book on Capital – The Answer
of a convinced Liberal
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Don't start with Pikkety. Start woth Pareto: 1897
From: Jaana Woiceshyn <jwoiceshyn@gmail.com>
Date: 2014-07-11 1:29 GMT-03:00
Subject: RE: Why competition is good and regulation bad
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Thank you, Ronaldo.—My silence does not imply anything
but me being swamped and not being able to find the time
to correspond—sorry. I hope my life will get less busy soon.
But in general, I disagree with Piketty’s thesis. Inequality is
a non-issue! Regards, Jaana
From: Noam Chomsky <chomsky@mit.edu>
Date: 2014-07-11 1:56 GMT-03:00
Subject: Piketty’s "Capital" – The answer of a convinced
liberal
To: Ronaldo Carneiro <rcarneiro@salutecafe.com.br>
Thanks for sending. Hope to get to it soon.
From: Info <info@profilebooks.co.uk>
Date: 2014-07-18 5:41 GMT-03:00
Subject: RE: Inequalities
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Hello,
Thank you so much for your email below.
Unfortunately, Profile books do not accept unsolicited
material. However, we do recommend the following
websites as industry standard for gaining a reputable agent
as well as other tips for publishing. Please do not pay an
agent either – this is usually not a good sign.
· Writers and Artists yearbook
· Preditors and editors
· Absolute write
We most certainly wish you the best with getting published.
Kind regards,
Olu
*****************************************
Olu Ubadike
Office Manager
Profile Books
3A Exmouth House
Pine Street
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London
From: Ieva NAVICKAIT? <Ieva@llri.lt>
Date: 2014-08-01 4:07 GMT-03:00
Subject: RE: Inequalities
To: Ronaldo campos carneiro <rcarneiro4@gmail.com>
Thank you for sharing, Ronaldo. It will be very interesing to
read your remarks on Piketty‘s book. Let‘s keep in touch.
Best wishes. Ieva
Christopher Spackman comentou
sua publicação.
Christopher escreveu: "Thanx for the article.
Thoughts. 1. Agree that capitalism is well on the way
to eating itself 2. Agree that war is a major problem.
Nation states have abrogated the right to billions of
unprofitable dollars. 3. Agree that answer is probably
not a 'ceiling' but a 'floor' – in other words, the tax
system. If the 'haves' agree to pay generously, then
the problems you point out with health, education,
etc. will disappear. The problem occurs when the
'haves' think they own their money and try to hold it
all. Conclusion: a neat summary of the problem 😉
Christopher"

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