Yesterday I was asked about Piketty’s argument that free trade reduces income equality. This requires an answer on several levels.
First, income inequality matters. The Keynesians claim that it doesn’t matter if Peter owes Paul or Paul owes Peter. This is observably false, just as it matters if there is a middle class that is economically active versus an economically dominant aristocracy that is primarily interested in conspicuous consumption. This isn’t some sort of new Levellism, merely a logical observation of fact.
Second, this is a literally Marxist perspective. It may surprise some to know that free trade is a Marxist position. Look it up. Free trade is not anticommunist, it is one aspect of communism.
Third, like most Marxist principles, this is wrong. Opening up an economy to additional outside players, most of whom have proved to be the apex predators in their native economies, means that the average individual’s income is going to go down because the outside player is not going to enter the market if it cannot extract sufficient resources to justify their capital expenses in penetrating it.
Now, I haven’t read Piketty and I see no reason to do so in the future. This is because he is attempting to sell a concept that is neither new nor true.