Why Piketty is s Defender of Neoclassical Economics and an Enemy of Egalitarianism

Naked Capitalism has the article Why Piketty is s Defender of Neoclassical Economics and an Enemy of Egalitarianism. I quote the article in its entirety below, and then show the video around which the article revolved.

Yanis Varoufakis, in an interview by Andrew Mazzone, offers a cogent, damning criticism of Thomas Piketty’s theory, such as it is, of inequality. Varoufakis contends that not only is Piketty’s theory (as opposed to his empirical work) weak and unworkable, it also ignores the true drivers of inequality in a capitalist system, such as differences in bargaining power. Varoufakis contends that Piketty was more interested in coming up with an explanation that would fit a neoclassical framework and thus be well received by mainstream economists than one that would help make the world better by providing real insight into the problem. The inadequate theory leaves Piketty with redistribution as his only possible solution, and he suggests a sketchy,poorly conceived a wealth tax.

The is a lively and provocative talk.

Going back to read the words in the article, I do agree with the value of what the article highlights. However, my impression of the interview by the time I came to the end was the following:

The value of this talk was in the last three minutes or so. What was important was the idea that the process needed to be fair, but the outcome was not something you could control in detail. The rest of it was frustrating because of the generality of it. For instance there was a discussion of three points made by Piketty, the first was deemed a tautology, the second was of some value, and the third was also dismissed. There was no discussion of what the three points were and why their description of them was true. I have read the entire book, but I cannot recall what were the three points they were talking about.

The discussion in the last few minutes of how Nozick destroyed Rawls’ thesis by asking a simple question was very informative. The fear that the same thing would happen to Piketty as what happened to Rawls was also a lesson well worth learning. I also valued the insight by Varoufakis of what was right and what was wrong with Libertarian philosophy. In essence the focus on process is right, the thought that unfettered capitalism was a fair process was wrong.

Much of the rest of the discussion was useless to me. I can’t pass judgment on how useful it was to anybody else, because I cannot know what prior knowledge someone else brings to listening to this discussion.

I cannot predict how you might view this 36 minute talk, but I wouldn’t be surprised if you were wondering what was so lively and provocative about most of it.

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