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examine Henry George’s philosophies in today’s society and economy


September 17, 2014
Smart Talk with Andrew Mazzone and Dr. Yanis Varoufakis

A previous guest on Smart Talk, Yanis Varoufakis, author of The Global Minotaur and a professor of economic theory at the University of Athens, has returned to critique the highly touted book Capital in the Twenty-First Century by French economist Thomas Piketty.  Varoufakis concedes that the book “confirmed the hideous inequality” that we all knew about, but refers to the book as “propaganda.”

Claiming that Piketty wants to be the “guru of inequality,” Varoufakis credits him with having created a link between the occupy movement and the established mainstream of the economics profession. He, however, finds many flaws in Piketty’s theoretical framework, beginning with the assertion that there’s no difference between capital and wealth: “We all know we can’t measure capital.”  In Piketty’s model, there is no distinguishing between a robotic assembly line, a portfolio of bonds, or silverware in a grandmother’s cupboard. Yet Piketty’s only policy prescription is to redistribute wealth by taxing wealth.  Varoufakis asks, “Do we really want to tax our grandmother’s silverware?” and goes on to assert that the allure of Capital comes from the theoretical component’s “discursive authority.”  Indeed, the theoretical framework leads Varoufakis to say the book is similar to “religious theology, which adherents rarely read and less often fully understand.”

Varoufakis also discusses some of the negative criticism that Capital has garnered. Many people are asking, “Who are you to impose upon us a particular distribution which you think is optimal or just?”  According to Varoufakis, reactions such as these will ultimately destroy the possibility of progressive action. In the final analysis, he calls Piketty “a great enemy of pragmatic egalitarianism.”