"Thomas Piketty On The Wealth Divide"
SOLOW: Piketty is right. "Piketty's foreboding vision of the twenty-first century remains to be dealt with: slower growth of population and productivity, a rate of return on capital distinctly higher than the growth rate, the wealth-income ratio rising back to nineteenth-century heights, probably a somewhat higher capital share in national income, an increasing dominance of inherited wealth over earned wealth, and a still wider gap between the top incomes and all the others. Maybe a little skepticism is in order. For instance, the historically fairly stable long-run rate of return has been the balanced outcome of a tension between diminishing returns and technological progress; perhaps a slower rate of growth in the future will pull the rate of return down drastically." Robert M. Solow in The New Republic.
JENKINS: Piketty's misplaced faith in taxation. "He may be right about our slow-growth future, but his faith in taxation to correct the imbalances and consequences of stagnation is excessive. The 70% top income-tax rate that once prevailed in the U.S. was not a great leveler. It did more to empower politicians and special interests -- who busied themselves creating loopholes for llama farms and soft porn movies -- than it did for the average earner. And his equation of wealth with capital overlooks that much stock-market wealth is likely to evaporate in the face of his confiscatory agenda." Holman W. Jenkins Jr. in The Wall Street Journal.