I’ve changed the tagline of this blog from “cautiously optimistic” to “solutions oriented cynicism.”
I’ve come to terms with my inherent cynicism. My knee-jerk reaction to the enthusiastic proclamations of social entrepreneurs is skepticism rather than inspiration. You won’t hear me say, “Oh my god, that’s so amazing.” Instead, I ask questions. Lots of questions.
But I’m also skeptical of a certain kind of skepticism — a fatalistic, apocalyptic, complainalism — that merely points out all that is wrong with humanity without every considering what can be done to improve our condition.
Take Thomas Picketty’s book, Capital in the Twenty-First Century (no, I haven’t read all of it). The book leaves its readers with the fatalistic impression that inequality is an inherent condition of capitalism. The one “solution” he puts forth is a global wealth tax that is a political non-starter. It’s a deeply cynical perspective of capitalism (one that I’m sympathetic to), but without any realistic solutions to consider.
I’m more impressed by Joseph Stiglitz’s response, Phony Capitalism from last month’s Harper’s. Yes, he agrees that there is an inherent problem when investors make increasingly greater returns on their wealth than workers make for their labor. But there are achievable tax policy reforms that are politically achievable.
Some guiding principles from his essay:
At the top of the list of concerns in assessing any tax proposal should be its impact on the distribution of income. But three broad principles should also help guide thinking. First, it is better to tax bad things than good things — to tax pollution and speculation, say, than work and savings. Second, it is better to tax things like land, oil, and other natural resources, which don’t disappear when they are taxed (factors in inelastic supply, as economists put it). These two principles reflect a more general third principle: incentives matter. Taxes should encourage activities that are of widespread benefit and discourage those that are costly to our society.
Like Piketty, Stiglitz is an inherent skeptic. But he’s a solutions-oriented skeptic.
Tax policy isn’t the only way to address inequality. As a Brazilian social activist told me on Monday, “Brazil’s universal health care system is the most equalizing institution in a very unequal country.” Equal access to quality education is another equalizing force to address inequality.
Thus my deep skepticism of the Occupy movement and abstract calls for “an alternative to capitalism.” Sure, the venture capital-funded tech economy is accelerating inequality, producing a handful of tech billionaires without creating middle class jobs, but we already know what needs to be done to address the problem: greater access to health care, greater access to quality education, significant reforms in tax policy. Why mobilize for abstractions when we can campaign for specific, measurable reforms?