As all thinking adults on this planet, I was intrigued to read about Thomas Piketty and his magnum opus “Capital in the Twenty-First Century.” Its main message, according to the Guardian:
Rising inequality is killing capitalism.
This is a nice message. I like the French, and I like this idea of taxing the super rich.
The only problem after reading this article is that I felt Piketty didn’t really address the origins of money creation. To me, it feels like he still believes it’s a fair world, with fair countries with equitable monetary policies, who somehow come into their trillions of dollars and euros in a fair way, and the only solution is taxing those awful rich people.
Now I wonder if it’s that simple?
It appears to me Christine Laguarde also says the same thing on Amanpour's program. Economic inequality is bad for the economy. Lets monitor it, lets measure it, lets keep it in check. Sort of like it’s a tumor that can be scanned with a scanner and then removed when the doc says its big enough to get rid of.
I’m not an economist, just an unemployed writer of blog posts. But it occurred to me that the fundamental source of the inequality seems to come from how money is created. I am talking about those cash bills in your hand, people. I am wondering why some countries seem to print so much of it –dollars, for instance. It’s a bottomless pit. Lets invade Iraq. And Afghanistan. And Ukraine. And now all of Eastern Europe. The money keeps on flowing and flowing and flowing. It’s a bottomless cup.
People in slums in Brazil, and India, and other places of this nature, meanwhile, may supply services to the economies of Europe and America, but somehow they don’t have this equitable start of cushioning of nice currency. They start out with zero bills in the monopoly game. It’s like a game where half the players start with nothing in their hands, forty percent get two or three bills, and about ten percent take all those little green bills and tell the other players: “Hey, once you guys get up to speed, we’ll give you a few of these bills. In the meantime, stay in the game.”
But why should people stay in this game? It is only as long as people think the dollar and the euro should keep on flowing out of the ground, like some Greek mythological fountain of plenty, that Nepalese and Indians and other workers will continue to work for almost no money for years in the Gulf, to take out oil from the ground to fill the cars of Americans, who may be rushing around doing nothing more important than their laundry. I mean, come on—can these 330 million Americans really be creating all that many new products, and new businesses, and new ideas, enough so that they can exponentially keep all the rest of the other economies in a place from which they can never throw off the weight of the dollar?
I always find it strange to go the local supermarket and find out that the one new Nepalese item that makes it there-whether rhododendron juice or seabuckthorn juice or nettle fabric or high altitude churpi—has vanished into the giant maws of the supermarkets of Europe and America. Nothing remains, even though the return to the people who make these goods is tiny, in comparison. The churpi cheese, once the staple food of mountain people, now ends up as dog chew for American pets. No doubt a local elite middleman makes a tiny profit—enough to build a building, perhaps. In the meantime, the mountain people get exponentially less nourished than they were before. Whatever little monopoly currency they started out with is rapidly being seized in this game where only the very richest countries can win.
I like the French, and I like this idea of taxing the superrich. But I think global inequality needs a more elaborate solution than simply taxing the billionaires. I think people need to start asking: how come those countries in Europe and America start out with so much more currency in their hands than the rest of the 154 countries put together?
And: how come they never run out of cash, even when everything—trade, employment, sales—is down?
And: should we start looking at the insides of this bottomless cup?