The “savior of socialism” proves the worth of capitalism 8

Today we post, in our Pages section, a review of Capital in the Twenty-First Century by Thomas Piketty. 

The review, by Don L, is titled:  The “Savior  of Socialism” Proves the Worth of Capitalism. (To go there, click on the title under Pages, at the top of our margin.)

Here is an extract :

Piketty’s Marxian monster is one nonsensical – and previously discarded – economic notion after another. He doesn’t grasp that there is no distribution of income, favorably or negatively, in a Free Market Capitalistic system. All wealth is allocated by consumers … they are kings and queens of an economy and of a truly JUST society. They determine what producer satisfies needs and wants most successfully. It’s consumer meritocracy! Nobody from General Foods ever shows up at the door with a threat of imprisonment if you don’t buy. Further, Piketty holds to the long-ago-tossed idea that capital is homogeneous. Capital is heterogeneous, and it is the putting together, by an entrepreneur, of the right combination of capital to serve consumers’ demands, in an uncertain environment, that determines profit or loss. Remember, an entrepreneur pays wages well in advance of sales revenue. There is absolutely no such thing as a guaranteed or certain rate of return on capital such as Piketty chronically and erroneously incorporates in his formulations. …

Mr Piketty’s book, except for unintentionally proving that government causes income inequality, is worthless, and his endeavor is doomed. Piketty fails to comprehend that inequality arises when government economic intervention distorts free exchange into an unnatural 3-party, buyer-seller-government, lose-lose-win by coercion, framework. He just doesn’t understand that there can never be a sufficiency of data, nor a mathematical model, by which you can emulate the free and willing, person-to-person, win-win interaction of hundreds of millions of people making trillions upon trillions of decisions about what they think is best for themselves as they allocate dollars/wealth through exchange. Governments cannot legislate or impose a false reality.

“Socialism fails because it’s based on the emotion of SHOULD.

Free Market Capitalism succeeds because it’s based on the reality of IS.”

Ludwig von Mises

The author supplies a very useful list of books at the end of the review.

Posted under Capitalism, Commentary, Economics, Socialism by Jillian Becker on Tuesday, May 20, 2014

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