Quotulatiousness

August 6, 2014

“Atlas Shrugged was not an instruction manual”

Filed under: Business, Economics, Government, USA — Tags: , , — Nicholas @ 08:34

Oh, my. A few corporations are using the “corporate inversion” tactic to get out from underneath punitive taxes and the reaction is to talk about making it harder to escape? Tamara K. explains why this is breathtakingly dumb:

Dude, one of the complaints that nuanced cosmopolitan liberals have with Ayn Rand is that her villains are cartoonish caricatures, and here you go popping out an editorial that could have been written by Wesley Mouch. Tone-deafness on this scale is positively breathtaking. Atlas Shrugged was not an instruction manual, you knob.

I suspect more corporations have been considering the pro and con to corporate inversion recently … and the hysterical reaction to the few that have already taken place may trigger a rush to the exits. Nice work, guys!

August 3, 2014

NLRB decision would “stick a fork in the franchise model”

Filed under: Business, Economics, Food, USA — Tags: , , — Nicholas @ 10:08

In Forbes, Tim Worstall explains why the recent decision by the US government’s National Labour Relations Board could destroy the franchising business model widely used by fast food chains:

The National Labor Relations Board (NLRB) made a very strange decision last week to rule that McDonald’s the corporation, was a joint employer of the staff in the franchised restaurants. It was, of course, at the urging of those labour activists who would like to union organise in the sector. Dealing with one national company is obviously going to be easier than dealing with thousands of independent business owners. There’s a number of problems with this decision ranging from the way that it overturns what has long thought to be settled law, to it obviating already signed contracts but perhaps the greatest problem is that it calls into question the entire validity of the franchise system.

[…]

The franchisor though gets paid a percentage of pure sales: what the labour costs at the franchises is is no skin off their nose at all. So they’ll not control it. The only major input that the franchisee can control in order to determine profitability would now become, at best, a join venture and we’ve different incentives for each side of the bargain. That’s just not going to work well. I don’t think that Pudzer is being alarmist in stating that this ruling would stick a fork into the franchise model as a whole. You simply can’t have such a system where the franchisees don’t control any of their inputs.

Of course, it’s still open to someone to argue that the franchise system shouldn’t actually exist, that it would be a good thing if everyone were either a truly independent organisation or part of a large and centrally managed group. But if that is the argument that’s being made, or will be made, then it’s a large enough change that it really needs to happen through political means, not administrative law. That means that if Congress wants to change the rules in this manner then that’s up to Congress. But it really shouldn’t be done by the decision of an administrative agency.

August 2, 2014

Explaining free market exchange in real-world terms

Filed under: Economics, Liberty — Tags: — Nicholas @ 11:17

A lovely little bit of explanation (that doesn’t require you to already have Econ 101 on your transcript):

“What are you looking at? Oh, Craigslist. My brother uses that all the time. Crazy, he should get a job”

“What does he do”

“Oh, he buys phones and stuff like that, jailbreaks them, then sells them for a lot more. He’ll buy a phone for $150 and sell it for $400.”

“Sounds like he’s doing pretty well”

“I suppose, but he’s always driving all over to buy stuff”

“Ok. How long do you suppose it takes him to pick one up and get home? Hour and a half? How long to jailbreak it? Lets say 30 minutes, although I bet it a lot less if he has the machine or program or whatever you use. You just told me he made $250 bucks on that one phone he sold. Dude, that’s $125/hour! That’s a pretty good income. That’s the how the free market works. People buy stuff they can sell to make money.”

“I sold an old car to Crazy Rays (Crazy Rays is a pick n pull junkyard) for $500. I bet they sold 2-3 grand worth of parts off of it.”

“How much work would it have been for you to part it out and sell the parts yourself?”

“Too much”

“And you’d rather have the $500 than your old beater, right?”

“Damn straight”

“See, that’s the beauty of the free market! Nobody loses!”

“What do you mean”

“Look, they don’t teach this in school anymore, but think about it for a sec. You hear all this crap about evil corporations and price gouging and that kind of shit. In a free market, that’s all crap. Nobody voluntarily makes a deal that’s bad for them. You’d rather have the $500 than your old car. Win. Crazy Rays would rather have your old car than the $500. Win. Who loses?”

“Nobody”

“Who wins?”

“Both of us”

“And that’s why the free market works.”

*clink beers*

July 30, 2014

QotD: Balancing the budget

Filed under: Economics, Government, Politics, Quotations — Tags: , — Nicholas @ 00:01

… it sounds like a sober and centrist position. I mean who believes in deficit financing? Well everybody but you’re not suppose to admit it out loud. Like dwarf porn. Many watch but few will say so. What it means in practice is one of two things. If an actual conservative uses the term it means that the public service is getting taken to the tool shed. There being few actual conservatives in politics what it usually means is that we’ll keep spending until someone makes us stop.

That’s when the bond market vigilantes step in. Then everyone blames the bond market for ending the party. The kind politician would love, absolutely love, to spend more money on “X” but those evil Gordon Gekko types won’t let him. In truth the bond market traders are no more responsible for a government going broke than a doctor is responsible for giving an alcoholic DT.

The state, observed Bastiat so many years ago, is the great fiction by which everyone tries to live at the expense of everyone else. Politics is the lie that this can go on indefinitely. Voters complain about the low levels of honesty in politics. But a dishonest political class is the product of a dishonest electorate. If people want something for nothing, they’ll get the lying louses they deserve. Fool me once, shame on you. Fool me a hundred years in a row and the shame is very much on the ordinary bitchin’ voter.

Richard Anderson, “Transparent Lies”, The Gods of the Copybook Headings, 2014-07-28.

July 29, 2014

Australia’s bitter experience with carbon mitigation

Filed under: Australia, Economics, Environment, Government — Tags: , — Nicholas @ 06:47

Shikha Dalmia looks at Australia’s recently abandoned carbon tax scheme:

Environmentalists had a global meltdown last week after Australia scrapped its carbon tax. They denounced the move as “retrograde” and “environmental vandalism.”

They can fume all they want, but Australia’s action, combined with Europe’s floundering cap-and-trade program, signals that “mitigation” strategies — curbing greenhouse gases by putting economies on an energy diet — are not winning or workable.

Australia leapfrogged from being an environmental laggard (initially refusing to even sign the Kyoto Protocol) to a leader when its Green Party-backed Labor prime minister imposed a tax two years ago. It required Australia’s utilities and industries to pay $23 per ton of greenhouse gas emissions.

But the tax was an instant debacle.

Australia has the highest per capita carbon dioxide emission in the world and the main reason is that it’s even more coal-dependent than America. Coal supplies 75 percent of its energy needs (compared to 42 percent in America). But contrary to green expectations, the tax didn’t prompt companies to rush toward renewable sources, because they are far costlier.

Rather, utilities passed their costs to households — whose energy bills soared by 20 percent in the first year. Other industries that face hyper-competitive environment such as airlines suffered massive losses. (Virgin Australia alone reported $27 million in losses in just six months.) The tax also made Australian exports globally uncompetitive, deepening the country’s recession.

This spawned a backlash that brought down the Labor government and catapulted into office the Liberal Party’s Tony Abbott, who made a “blood promise” to ditch the tax, which he did promptly once elected, despite warnings that Aussie lowlands are more vulnerable to rising sea levels and other dire consequences of global warming than other countries.

July 24, 2014

QotD: The Law of Triviality

Filed under: Economics, Government, Humour, Quotations — Tags: , — Nicholas @ 00:01

People who understand high finance are of two kinds: those who have vast fortunes of their own and those who have nothing at all. To the actual millionaire a million dollars is something real and comprehensible. To the applied mathematician and the lecturer in economics (assuming both to be practically starving) a million dollars is at least as real as a thousand, they having never possessed either sum. But the world is full of people who fall between these two categories, knowing nothing of millions but well accustomed to think in thousands, and it is of these that finance committees are mostly comprised. The result is a phenomenon that has often been observed but never yet investigated. It might be termed the Law of Triviality. Briefly stated, it means that the time spent on any item of the agenda will be in inverse proportion to the sum involved.

C. Northcote Parkinson, “High Finance, Or The Point Of Vanishing Interest”, Parkinson’s Law (and other studies in administration), 1957.

July 22, 2014

The Erie Canal and the canal boom it created

Filed under: Economics, History, USA — Tags: , , — Nicholas @ 08:13

Last week, Chris Edwards posted a short article at the Cato@Liberty blog, discussing the long history of government malinvestment in infrastructure projects:

Most politicians are optimistic about the government’s ability to intervene and solve problems. That’s one reason why they run for office. Neocons, for example, have excessive faith that foreign intervention can fix the world, while liberals embrace the misguided idea that subsidies and regulations can boost the economy.

The Erie Canal was a misleading outlier: it was a major infrastructure project that actually succeeded in turning a profit, and it set off a string of copycat government initiatives … most of which quickly turned into expensive mistakes for state governments:

Chapter 3 of the book [Uncle Sam Can’t Count by Burton and Anita Folsom]looks at the orgy of state government canal building from the 1820s to the 1840s. Here is the basic story:

  • New York State funds construction of the Erie Canal, which opens in 1825.
  • The Erie Canal is a big success, which spurs canal fever across the nation and encourages other state governments to hand out subsidies. Government canal schemes are launched in Michigan, Pennsylvania, Ohio, Indiana, Maryland, and Illinois. There is particular excitement about subsidized “internal improvements” among Whig politicians, including Abraham Lincoln.
  • However, politicians overestimate the demand for canals in their states and underestimate the costs and difficulty of construction. They do not recognize that the Erie Canal is uniquely practical and economic as it traverses relatively flat land and connects the Great Lakes with the Atlantic.
  • Some of the state-sponsored canals are huge boondoggles and are abandoned. And other than the Erie Canal, all of the state canals sustain heavy losses, including other subsidized canals in New York.
  • After the failures, numerous states privatize their infrastructure and change their constitutions to prevent politicians from wasting further money on such schemes.

July 17, 2014

Mussolini would recognize (and approve of) “economic patriotism”

Filed under: Economics, Government, History, USA — Tags: , , , , , — Nicholas @ 07:58

Kevin Williamson isn’t a fan of the recent upsurge in usage of the term “economic patriotism”, both for practical and historical reasons:

“Economic patriotism” and its kissing cousin, economic nationalism, are ideas with a fairly stinky history, having been a mainstay of fascist rhetoric during the heyday of Franklin D. Roosevelt’s favorite “admirable Italian gentleman.” My colleague Jonah Goldberg has labored mightily in the task of illustrating the similarities between old-school fascist thinking and modern progressive thinking on matters political and social, but it is on economic questions that contemporary Democrats and vintage fascists are remarkably alike. In fact, their approaches are for all intents and purposes identical: As most economic historians agree, neither the Italian fascists nor the German national-socialists nor any similar movement of great significance had anything that could be described as a coherent economic philosophy. The Italian fascists put forward a number of different and incompatible economic theories during their reign, and the Third Reich, under the influence of Adolf Hitler’s heroic conception of history, mostly subordinated economic questions as such to purportedly grander concerns involving destiny and other abstractions.

Which is to say, what the economic nationalism of Benito Mussolini most has in common with the prattling and blockheaded talk of “economic patriotism” coming out of the mealy mouths of 21st-century Democrats is the habit of subordinating everything to immediate political concerns. In this context, “patriotism” doesn’t mean doing what’s best for your country — it means doing what is best for the Obama administration and its congressional allies. This is where my fellow conservatives who write off Barack Obama as a Marxist really get it wrong: He has no meaningful economic philosophy whatsoever. Marxism might be a moral step backward for Barack Obama, but it would be an intellectual step up in the sense that it at least represents a coherent worldview. (“At least it’s an ethos.”) In years of listening to Barack Obama’s speeches, I’ve never detected any evidence that he understands, or even has any interest in, economic questions as such. He is simply a keen political calculator. The conflation of the national interest — “patriotism” — with the interest of the party or the supreme leader is too familiar a demagogic technique to require much explication.

That’s the Washington way: Create stupid financial incentives, complain when people respond to them — and then declare that conformity with your political agenda is identical to patriotism. The production values may be Hollywood slick, but this is just another third-rate sequel: Banana Republic: The Tax Code Strikes Back.

Except the tax code is not striking back. Democrats complain about it, but they rarely if ever try to do anything about the industry handouts and sweetheart deals enshrined therein — given that they wrote so many of them, why would they?

July 15, 2014

The economic side of Net Neutrality

Filed under: Business, Economics, Technology — Tags: , , , , — Nicholas @ 07:41

In Forbes, Tim Worstall ignores the slogans to follow the money in the Net Neutrality argument:

The FCC is having a busy time of it as their cogitations into the rules about net neutrality become the second most commented upon in the organisation’s history (second only to Janet Jackson’s nip-slip which gives us a good idea of the priorities of the citizenry). The various internet content giants, the Googles, Facebooks and so on of this world, are arguing very loudly that strict net neutrality should be the standard. We could, of course attribute this to all in those organisations being fully up with the hippy dippy idea that information just wants to be free. Apart from the obvious point that Zuckerberg, for one, is a little too young to have absorbed that along with the patchouli oil we’d probably do better to examine the underlying economics of what’s going on to work out why people are taking the positions they are.

Boiling “net neutrality” down to its essence the argument is about whether the people who own the connections to the customer, the broadband and mobile airtime providers, can treat different internet traffic differently. Should we force them to be neutral (thus the “neutrality” part) and treat all traffic exactly the same? Or should they be allowed to speed up some traffic, slow down other, in order to prioritise certain services over others?

We can (and many do) argue that we the consumers are paying for this bandwidth so it’s up to us to decide and we might well decide that they cannot. Others might (and they do) argue that certain services require very much more of that bandwidth than others, further, require a much higher level of service, and it would be economically efficient to charge for that greater volume and quality. For example, none of us would mind all that much if there was a random second or two delay in the arrival of a gmail message but we’d be very annoyed if there were random such delays in the arrival of a YouTube packet. Netflix would be almost unusable if streaming were subject to such delays. So it might indeed make sense to prioritise such traffic and slow down other to make room for it.

You can balance these arguments as you wish: there’s not really a “correct” answer to this, it’s a matter of opinion. But why are the content giants all arguing for net neutrality? What’s their reasoning?

As you’d expect, it all comes down to the money. Who pays more for what under a truly “neutral” model and who pays more under other models. The big players want to funnel off as much of the available profit to themselves as possible, while others would prefer the big players reduced to the status of regulated water company: carrying all traffic at the same rate (which then allows the profits to go to other players).

July 14, 2014

When unions took over the public sector

Filed under: Bureaucracy, Business, Economics, Government, USA — Tags: , , , , — Nicholas @ 09:09

Dmitri Melhorn says the union movement is missing an opportunity to be more relevant in the private sector, because public sector unions don’t help poorer workers (because public sector union members are middle class professionals, not working class):

Progressive hostility to [Harris v. Quinn], however, is shortsighted. Harris and decisions like it have the potential to revitalize progressive politics by restoring the relevance and political potency that labor held in the early-to-mid-20th century. The great labor leaders of that era — AFL-CIO President George Meany, President Franklin D. Roosevelt, and the like — agreed with the majority in Harris: it was both impractical and inadvisable to afford public employees compulsory collective bargaining rights.

Roosevelt said that collective bargaining and public workers’ right to strike would be “unthinkable and intolerable.” Meany said it would be “impossible.” In the view of these leaders, civil service laws from the Progressive Era of the 1890s to 1920s had made government jobs good and safe. Labor and progressives, therefore, needed to focus on blue-collar workers’ need to fight collectively for basic safety, dignity and living wages. Through this focus, the United States saw historic gains in the well-being of workers and the country’s middle class.

That labor heyday lasted through the 1950s, but starting in the late 1960s labor lost ground. Public-sector unions grew rapidly, but private-sector unions shrank. By 2012, public-sector workers had union membership rates more than five times higher than rates among private-sector workers.

Essentially, the public-sector unions sucked up all the oxygen. Talented labor organizers opted to work with government workers: their members were relatively prosperous and well connected, so they were easy and lucrative to organize. As explained in Jake Rosenfeld’s book What Unions No Longer Do from earlier this year, this shift to public-sector unions meant that unions no longer fought primarily for the working poor. Instead, much of their muscle was devoted to improving the status of middle-class professionals.

July 10, 2014

Argentina’s economic woes – tourist edition

Filed under: Americas, Economics — Tags: , , , , — Nicholas @ 10:56

How bad is the Argentinian economy right now? So bad that middle class Argentine tourists in Brazil eat at soup kitchens, according to the Wall Street Journal‘s Miriam Jordan:

The state-funded Citizen Restaurant in downtown Rio is accustomed to serving a balanced meal at an unbeatable price to about 5,000 poor residents of this city each day. During the World Cup, however, this cafeteria has been catering to another clientele as well: middle-class Argentines.

“We serve homeless people, drug addicts, blue-collar workers and retirees,” said Jose Barbosa, Rio de Janeiro state coordinator for food security. “This World Cup we have been welcoming Argentine soccer fans, too.”

With the value of the Argentine peso deeply eroded amid the country’s economic woes, many Argentines who have flocked here to root for their soccer team […] say they’re counting every Brazilian real they spend — and hunting for bargains. On Monday, dozens of Argentines lined up alongside Brazilians to buy lunch at the cafeteria, where a meal of black beans, white rice, salad and choice of meatballs or chicken sausage cost 1 real, or about 40 U.S. cents.

“Rio is very expensive — that’s why I am here,” said Fernando Castillo, a 24-year-old bartender from Buenos Aires. With gusto, he dug into his plate of food, which sat on a plastic-blue tray beside a cup of guava juice and a fresh orange for desert, both included in the price. “This is perfect,” he said, “especially at this price.”

“The generous portion keeps us filled all day,” added his cousin, Thomas Castillo.

[…]

To save on accommodations and flights, many Argentines drove to Brazil. In Rio, their campers and cars occupied prime beachfront parking spots until the city evicted them.

It then allowed them to park vehicles and pitch tents in a vast parking lot downtown that abuts the permanent bleachers where Rio’s samba schools perform during the annual carnival celebrations.

Word spread quickly at these parking lots that Citizen Restaurant, within walking distance of the Argentine encampment, offered good Brazilian fare at a bargain-basement price in a clean, safe environment. “It started with 10 of them one day, then 50 of them came and now we’re seeing about 200 Argentines each day,” said Ricardo Chaves, the eatery’s administrator.

Millennials starting to get jaded about the virtues of government

Filed under: Economics, Government, USA — Tags: , , , , , — Nicholas @ 07:57

The latest Reason-Rupe poll has some interesting results on the Millennial generation:

A Reason-Rupe survey of 2,000 Americans between the ages of 18 and 29 finds 66 percent of millennials believe government is inefficient and wasteful — a substantial increase since 2009, when just 42 percent of millennials said government was inefficient and wasteful.

Nearly two-thirds of millennials, 63 percent, think government regulators favor special interests, whereas just 18 percent feel regulators act in the public’s interest. Similarly, 58 percent of 18-to-29 year-olds are convinced government agencies abuse their powers, while merely 25 percent trust government agencies to do the right thing.

The Reason-Rupe report finds this skepticism of government has millennials favoring general reductions to government spending and regulations:

  • 73 percent of millennials favor allowing private accounts for Social Security; 51 percent favor private accounts even it means cutting Social Security benefits for current and future retirees because 53 percent of millennials say Social Security is unlikely to exist when they retire
  • 64 percent of millennials say cutting government spending by 5 percent would help the economy
  • 59 percent say cutting taxes would help the economy
  • 57 percent prefer a smaller government providing fewer services with low taxes, while 41 percent prefer a larger government providing more services with high taxes
  • 57 percent want a society where wealth is distributed according to achievement
  • 55 percent say reducing regulations would help the economy
  • 53 percent say reducing the size of government would help the economy

Of course, along with those hopeful signs are a few that show millennials are still idealistic (i.e., socialistic) in other areas: higher minimum wages, guaranteed food and shelter for all, and raising taxes on the rich all got lots of support in the poll.

July 7, 2014

What is the Canadian government hiding over TPP negotiations? Everything.

Filed under: Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 09:47

Michael Geist on the federal government’s secret dealings on the TPP docket:

The next major agreement on the government’s docket is the Trans Pacific Partnership, a massive proposed trade deal that includes the United States, Australia, Mexico, Malaysia, Singapore, New Zealand, Vietnam, Japan, Peru, and Chile. While other trade talks occupy a prominent place in the government’s promotional plans, the TPP remains largely hidden from view. Indeed, most Canadians would be surprised to learn that Canada is hosting the latest round of TPP negotiations this week in Ottawa.

My weekly technology law column (Toronto Star version, homepage version) argues the secrecy associated with the TPP – the draft text of the treaty has still not been formally released, the precise location of the Ottawa negotiations has not been disclosed, and even the existence of talks was only confirmed after media leaks – suggests that the Canadian government has something to hide when it comes to the TPP.

Since this is the first major TPP negotiation round to be held in Canada, there was an opportunity to build public support for the agreement. Yet instead, the Canadian government approach stands as one of the most secretive in TPP history. Why the secrecy?

The answer may lie in the substance of the proposed agreement, which leaked documents indicate often stands in stark contrast to current Canadian policy. The agricultural provision may attract the lion share of TPP attention, but it is the digital issues that are particularly problematic from a Canadian perspective.

For example, late last month the government announced that new copyright rules associated with Internet providers would take effect starting in 2015. The Canadian system, referred to as a “notice-and-notice” approach, is widely viewed as among the most balanced in the world, providing rights holders with the ability to raise concerns about alleged infringements, while simultaneously safeguarding the privacy and free speech rights of users.

June 28, 2014

31% of Americans believe the US is a crony capitalist state

Filed under: Economics, Government, USA — Tags: , — Nicholas @ 10:55

Thirty-one percent of Americans are probably right:

Many Americans remain unconvinced that the United States has a system of free market capitalism and continue to be wary of government involvement in the economy.

A new Rasmussen Reports national telephone survey finds that 32% of American Adults believe the United States has a system of free market capitalism, while just as many (31%) say it is a system of crony capitalism. Slightly more (37%) are not sure what kind of capitalist system America has.

That’s from a survey conducted at the beginning of April. I suspect the same survey done now would produce a plurality for the crony capitalist side.

H/T to Jesse Walker for the link.

June 25, 2014

Mexico’s champion crony capitalist

Filed under: Americas, Economics, Government — Tags: , , , — Nicholas @ 08:31

I don’t read the various financial magazines’ regular fanboi coverage of multi-billionaires, so I wasn’t all that aware of the fabulous wealth of Mexico’s Carlos Slim. Slim is one of the richest men in the world, but he doesn’t owe his success to technical innovation or outstanding business skills … he owns the Mexican telephone market thanks to a sweetheart “privatization” deal he got from his good friend in the Presidential palace back in 1990. In other words, his fortune largely derives from his ability to skim off vast profits from a captive customer base. Steve Sailer rounds up some interesting snippets about Slim, including a bit from French economist and current media darling Thomas Piketty:

Andres Oppenheimer wrote for PBS:

    Mexico in the early nineties was similar to American capitalism in the late 1870s. Azcarraga, Slim, and Hernandez were not much different from railroad and steel magnate Andrew Carnegie or oil trader John D. Rockefeller. Like the American “Robber Barons” of their time, the Mexico Twelve were making a fortune from their close partnership with the government. And to their immense relief, Mexico was not contemplating anything like the 1890 Sherman Anti-Trust Act, which had broken up U.S. monopolies through forced sell-offs.

In return, Salinas demanded at a private dinner party on February 23, 1993 that Slim and Mexico’s other 29 oligarchs donate $25 million each to the ruling party’s campaign war chest, a total of $750 million. Oppenheimer notes:

    Telecommunications magnate Slim … supported the motion, adding only that he wished the funds had been collected privately, rather than at a dinner, because publicity over the banquet could “turn into a political scandal.”

Now, you might think that there is something unseemly about a regular contender for the title of World’s Richest Man making his fortune off the relatively small Mexican economy. We’re constantly told that Mexicans have to be allowed to flock to America to escape starvation in their own land. Yet one well-connected monopolist is permitted to pile up an enormous trove by charging exorbitant fees for the lifeblood of any economy, communications.

A 2006 article in the New York Times pointed out:

    The Organization for Economic Cooperation and Development, an association of wealthy countries based in Paris, reports that Mexicans pay some of the highest phone rates in the world, with calls costing 50 percent more than the group’s average. Forbes reported that the average monthly phone bill for a small business in Mexico is $132, compared with $60 in the United States.

Slim epitomizes the toll taken on the Mexican economy by monopolists:

    As a result, said Mr. Ortiz of the Bank of Mexico, economic growth is one percentage point less than it could be with real competition. There are not enough jobs to keep workers from migrating to the United States …

Piketty, however, is offended by how Slim

    … is often described in the Western press as one who owes his great wealth to monopoly rents obtained through (implicitly corrupt) government favors…

(Slim, himself, has been proactive about improving his press coverage: in 2008 he financially bailed out the New York Times and is now the newspaper of record’s second-biggest owner. Not surprisingly, Slim, who profits lavishly off long distance calls between illegal immigrants in America and their loved ones in Mexico, doesn’t get mentioned much in the Times’ vociferous denunciations of immigration skeptics.)

Piketty, in his inimitable prose style, explains that criticizing Slim is a mistake, if not downright racist:

    Rather than indulge in constructing a moral hierarchy of wealth, which in practice often amounts to an exercise in Western ethnocentrism, I think it is more useful to try to understand the general laws that govern the dynamics of wealth—leaving individuals aside and thinking instead about modes of regulation, and in particular taxation, that apply equally to everyone, regardless of nationality.

In other words, rather than the citizens of Mexico using the rule of law to break up Slim’s monopoly, as Americans did with Rockefeller’s, the important thing is for readers of Capital to take global control.

What could possibly go wrong in Piketty’s planetary empire?

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