Wednesday, June 10, 2020

Capital and Ideology III

Part Two of the book consists of an exhaustive description of slave and colonial societies. There is so much material in this book – it could have been three or four books – that I'm going to comment only on things that particularly interest me. My interests do not necessarily match Piketty's, but I find some of the information interesting in its own right. In passing, Piketty mentions the basic pattern of international trade, and it struck me how little one ever hears about it, because it is ignored or distorted by the news media and politicians. When a country, such as Japan, increases its exports because labor is inexpensive, the workforce is young and it has a competitive advantage in pricing, the situation is not permanent and evolves over time, particularly when the workforce ages and the labor pool declines. Eventually, the workforce becomes smaller, and the wealth that has been accumulated is invested overseas, providing a replacement income for the income that has been lost from exports. Although the situation isn't quite so stark in the U.S., manufacturing and exports have similarly declined, resulting in fewer jobs. The workforce in the U.S. is also aging, but, unlike Japan, immigrants are filling vacant positions. Under this explanation, there is nothing wrong with trade deficits, and there isn't necessarily a reason to rebalance them. For example, Japan now has a trade deficit, but the Japanese have large investments abroad and are not financially imperiled. In order to regain lost manufacturing jobs in this scenario, it would be necessary to reduce labor costs either though automation or lower hourly pay. Thus, when Donald Trump or other politicians come along and say that they are going to rev up the economy and bring back jobs, as if it were 1960 all over again, they have no idea what they're talking about. There is a basic cyclical process in place that can't be bypassed. No doubt this will be listed in Trump's obituary, along with his other colossal failures. Piketty has yet to describe how improvements could be made in this kind of political environment.

I found the description of how slavery ended interesting. When the English ended slavery, the government compensated the slaveholders for their loss of property. The situation with the French in Haiti was quite different. There had been many uprisings in Haiti, and finally France agreed to let the slaves buy their freedom. Thus, Haiti incurred a debt in 1825 which was not paid off until 1950. The U.S. had confused and unsatisfactory results when slavery ended. There was a proposal to send the slaves to Liberia, which didn't work. An attempt to recompense the slaveholders was also unsuccessful, because the value of the slaves was too high to be afforded by the government. Perhaps some of the animus in the South lingers from the fact that the slaveholders were never compensated. The problem of slavery remains unresolved in the U.S., and we're still seeing it in the news. Of course, I don't have any answers, but I don't think that reparations to slave descendants, as currently discussed, are going to be politically popular. I find that movement a little odd, because life isn't fair and never has been. At this stage, the civil rights movement in the U.S. has worn quite thin and is on life support. Uneducated white people are now clambering for attention too, as their economic situations deteriorate. From my point of view, all Americans have become a bit whiny. Many of them seem to assume that they are entitled to a minimum standard of living even if they make little effort. Worst of all, the government, which is permanently underfunded because of low taxation, doesn't have the ability or desire to do much about it. I know it isn't an apt comparison, but I think more along the lines of the Armenians (three of my great-grandparents) who fled genocide in the Ottoman Empire. The idea that I would demand reparations from Turkey seems like the height of absurdity to me. If I were a slave descendant living in the U.S., my first choice would be to emigrate to a different country. I wouldn't waste my time waiting for the U.S. to become an enlightened country.

Also in Part Two are descriptions of the transitions from ternary societies to proprietary societies in Asia and elsewhere. There is so much data that I'm not going to try to summarize it.

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