Online Articles

Voter turnout at the latest European Parliament election is much debated. Many countries saw further drops compared to last EP elections in 2009, fuelling concerns about widening democratic deficit. Beyond the general facade, IREF discovers an interesting geographic pattern in the turnout numbers.

The concept of Living wage is gaining popularity throughout the EU. The social pressure of its advocates probably stands behind the recent proposals to increase substantial minimum wages. Closer scrutiny of the proposed levels of living wages by the IREF reveals, however, that the relationship between Living wages and Minimum wages is quite unexpected.

If the Yes campaign wins today, Switzerland will have by far the biggest minimum wage on this planet. We analyse this trend in a wider context of contemporary European popular movements. We suggest that the Swiss Minimum wage proposition has actually very little to do with the traditional concept of “minimum wage”. Lessons for the EU go much deeper than the standard effect of minimum wage on jobs.

In his new Capital in the 21st century, as forbidding as his previous work on High Wages in France in the 20th century, Thomas Piketty presents a mass of data on asset growth in several European countries and the United States. This information improves the knowledge of our society’s relationship to capital and the divide between the richest and the poorest. Except that the author abuses these data, following 19th century scientific materialism.

Like Marxist authors, he endeavours to transform his discourse into a scientific demonstration. He wants not only to convince, but to hit home his own truth, supposedly grounded in the mathematical formula that he presents. Granted, he states that “we should be wary of any economic determinism in this matter” (p. 47), but he uses econometrics to announce the expected wealth distribution in the 21st century, as if there were little or no risk of making mistakes.

And his claim is that the divide between rich and poor will inevitably widen, although he admits that the opposite took place during the 20th century. He extrapolates trends, as did Malthus in the 18th century or the Rome Club in the 1970s to predict that the world would die of starvation. He questions Kuznets’s inequality bell curve, sketching trends that ignore human action. He notes that “Marx totally ignored the possibility of technical progress and continuous productivity growth” (p. 28) in his theory of infinite capital accumulation killing off capitalism, but on the other hand he reproduces a theory of constant wealth growth.

Abstract:

– Thomas Piketty presents statistical graphs in the manner of Malthus in the 19th century or the Rome Club in the 1970s

– Piketty’s theory of boundless wealth accumulation does not withstand factual analysis

– There is first confusion between capital (productive, financial and real estate) and negotiable assets

– Thomas Piketty claims that for the past 20 centuries, the asset rate of return is 4 percentage points above the rate of economic growth

– But how could he possibly obtain such data for the past 2,000 years? This is absolutely impossible

– Further, and contrary to what he claims, the average asset rate of return of households cannot be higher than the rate of economic growth

– If Piketty’s calculations were accurate, then the wealthiest 1 per cent would own all available assets by 2016!

– Piketty’s calculations are wrong because he ignores reality: the economy is not a zero sum game, capital is saved, reinvested or even wasted; social mobility is extremely important and inequalities are not set in stone

Nobody likes poverty. But how do we end it? Suppose we give everyone some money. This will automatically include the poor, we don’t have to identify them, problem solved. Is it doable? Will anyone still work, create new ideas, write poetry, love?

The answer depends largely on how basic the basic income is, as we show.

The latest Scorsese blockbuster is still making the headlines for its novel artistic work with timelines. Does the Wolf, however, have anything whatsoever to say about Wall Street? Very little, and it may actually work to strengthen and entrench any bad practices that remain in the financial world!

European elections are upon us. In a series of articles, IREF is helping to inform voters’ decision. Last week we analysed attendance rates by voters at elections and reasoned that European elections may be bad for democracy. It’s now time to turn the tables and consider attendance rates of parliamentarians at the EP. What does the record reveal about their attitude to work?

Following lacklustre performance at local elections, the French President has appointed a new Prime Minister. Is it a good tactic, and will it change anything?

In his new book Capital in the 21st century (Belknap Press, April 2014), French economist Thomas Piketty presents a mass of data on asset growth in several European countries and the United States. This information improves the knowledge of our society’s relationship to capital and the divide between the richest and the poorest. Except that the author abuses these data, following 19th century scientific materialism

“Nothing to see here, move on.” So goes the “apology” for low turnout rates in European elections as penned by many European analysts and commentators. “The US have them just as low at mid-term elections, so why worry?” Closer analysis of individual country data by the IREF, however, reveals that the “European turnout deficit” is actually worryingly high in many places, adding to existing concerns over EU’s democratic deficit.