Karl Fitzgerald: Michael Hudson – www.Michael-Hudson.com – is back on the 3CR airwaves with an explosive show moving through the incredible wealth gap as outlined by Thomas Piketty. His book is barnstorming the world at the moment. We review it, alongside a bit of Marxist theory as we slide into what America is really up to in the Ukraine. It’s always interesting with Michael Hudson. Stay tuned for another instalment of the Renegade Economists.
Sweeping the world have been glowing reviews of the new book by Thomas Piketty, Capital in the 21st Century. I’ve been pounding on the bookshop doors asking when it’s arriving, this 700-page opus. It hasn’t hit here yet but I’ve read many book reviews. Have you had a chance to grab a hold of this must-read document?
Michael Hudson: No, but I have worked on the statistics that he uses for the last 50 years, so I know the problems with the statistics and what they can do and what they can’t do. And I’ve read what he’s been publishing all along with his colleague in California, Emanuel Saez, about the concentration of wealth and income at the top of the pyramid.
Karl: And that’s the big point is that he’s renowned, along with Saez, for working on income inequality, but this book really looks at wealth inequality.
Michael: The problem with Piketty’s statistics are that it vastly understates how unequal the world really is and that’s because – you may know in Australia that our Queen of Mean, the hotel lady Leona Helmsley said “Only the little people pay taxes”. What she means is only the little people earn income. Rich people in America don’t earn income, they make capital gains and capital gains are not in everybody’s income statistics, they’re not in the statistics basically that are reported. And the IRS, the Internal Revenue Service of the United States, only conducts a study of capital gains once every ten years or so, and countries like England and many European countries don’t even have a tax on capital gains, so they’re not going to appear in the statistics.
So you’re seeing a replay of Chile under Pinochet and the military dictatorship in the Ukraine now. And the result, of course, will be to tear Ukraine apart – it’s bankrupt, no matter what, there no doubt will be civil war there. The Americans are hoping to use the civil war as an opportunity to move in NATO and to move H-bombs right onto the Russian border. This is risking a threat of war. This is crazy.
Updated: Apr. 29, 2014
Is Thomas Picketty Right About The Causes of Inequality?
TheRealNews on Apr 29, 2014
Economist Michael Hudson discusses the popularity of French economist Thomas Picketty’s recent book and says his work fails to link the financialization of the economy to the ascent of the 1%.
Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. His book summarizing his economic theories, The Bubble and Beyond, is now available. His latest book is Finance Capitalism and Its Discontents. He can be reached via his website, firstname.lastname@example.org.