Senior fellow and China specialist James Dorn of the Cato Institute argues here that morality and justice require the protection, not the taking, of property. Following the advice of Thomas Piketty, who teaches at the Paris School of Economics and has achieved “rock star” status with the release of Capital in the Twenty-First Century, Mr. Dorn argues, would not lead to social harmony and prosperity, but instead to injustice and the loss of liberty. What Mr. Piketty chooses to ignore is that when money is reinvested, either in an owner’s business or elsewhere, jobs and wealth are created to the benefit of society in general. As Mr. Dorn points out, the protection of property rights, along with lower taxes, allows all people to prosper under a stable, just rule of law.
The release of Thomas Piketty’s new book “Capital in the Twenty-First Century” by Harvard University Press has caused a rush of media attention for the 42-year-old professor who teaches at the Paris School of Economics.
He advocates a steeply progressive income tax with a top rate of 80% along with a wealth tax to reduce inequality, which he finds to be on the rise globally.
If his scheme were implemented, “legal plunder” (a term coined by the 19th century French liberal Frederic Bastiat) would undermine the rule of law, which is meant to safeguard persons and property, and turn the concept of justice on its head — from meaning the prevention of injustice to the use of force to dictate some politically favored distribution of income and wealth.
Piketty claims he is not a Marxist but rather a socialist with a belief in private property. Yet, the contradiction should be apparent: One cannot defend private property and at the same time call for a massive taking of property.
“Following the policy prescriptions of Piketty and Shiller would not lead to social harmony and prosperity, but rather to injustice and the loss of liberty.”
Piketty reveals his preferences when he states: “Capitalism and markets should be the slave of democracy and not the opposite.”
In his view, property is not a natural right prior to the law; it is a creation of the state. Hence, the majority should be able to use the power of government/legislation to heavily tax the rich and near-rich. The purpose would be to rid the world of inequality. This is his moral imperative.
The likely result of this utopian scheme would be to drive creative people out of high-tax countries, slow economic growth, and make societies poorer in the long run.