The conservative case for Thomas Piketty

Looked at it very broadly, the conservative “diagnosis” would say something like this: for the broad middle class, what we usually think of as the components of “the good life”, i.e. housing, a job, affordable healthcare, higher education, and so on, are growing increasingly expensive–and in large part this is because of bad government regulation.

This is also true of access to capital. As Piketty says, all else equal, we want to increase wealth mobility and access to capital.

If you want a vibrant economy that favors the entrepreneur–as conservatives do–you want an economy where it’s easy to get rich, but where it’s hard to stay rich–where rich people have to keep putting money to work, i.e. investing in young entrepreneurs and general-welfare-enhancing risky ventures. One way to help do this, of course, is to unleash the creative-destructive forces of the market in as many sectors as is reasonable, so that entrepreneurs will disrupt old wealth. But–again, particularly in a zero-inflation world–it’s not clear that this is sufficient to ensure that goal. And, in a world where you do have to tax something, taxing stocks of wealth seems like one of the least-harmful options out there.

There is no such thing as a “neutral” monetary or tax policy. All else equal, your option will either encourage wealth hoarding, or wealth sharing–true sharing, driven by the free market, not “sharing” under the threat of a government baton. And it seems to me that a system that encourages wealth mobility is one that free market conservatives should embrace.