Wall Street and wealthy Americans are in fact the biggest winners from policies like quantitative easing, while Main Street Americans have seen little improvement in their economic lives. A more broadly based fiscal policy response might have engendered a recovery less skewed toward the haves, rather than the have nots. End result? Inequality is getting worse, people are getting a lot angrier and we get political phenomena like Donald Trump.
In George Orwell’s classic dystopian novel 1984, a totalitarian state has created a language called Newspeak designed to limit freedom of thought, often by inverting customary meanings. How ironic that Ayn Rand, self-appointed defender of economic freedom, should add the term “Objectivism” to the lexicon of Newspeak.
Some think that human cooperation can develop in a spontaneous way (Hayek comes close to this at times), or because cooperation creates an edge, the forces towards the evolution of a psychology of group cooperation are going to ensure that tribes, villages or even bigger polities can develop a sophisticated order without the state.
Jsme ve válce, hřímá hned nato jakýsi politik. Jsme silní a neustoupíme, zamračeně opakuje totéž, co opakoval před půlrokem a před rokem. Musíme se zkrátka sjednotit. Politik dokonce předstihl Islámský stát v přihlášení této organizace k útoku.
How can it be that great wealth is created on Wall Street with products like credit-default swaps that destroyed the wealth of ordinary Americans—and yet we count this activity as growth? Likewise, fortunes are made manufacturing food products that make Americans fatter, sicker, and shorter-lived. And yet we count this as growth too—including the massive extra costs of health care.
Any serious student of economics can’t help but notice that the academic and popular versions are as different from each other as Dr. Frankenstein and his monster. Take Friedrich Hayek, for example. His books could fill a bookshelf and the commentary could fill a small library, but the monstrous version can only speak in two-word sentences. “Government bad! Market good!”
Market interactions, though, are different from “real” human relationships. Efficient markets require trust, fairness, and cooperation among people who don’t know each other and may not see each other again. Without trust, markets break down.
The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to 19th-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.
