He points to the problem; rentier capitalism, weakened competition, feeble productivity growth, high inequality & degraded democracy ....pic.twitter.com/IjfDTpl53B
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Martin Wolf 's piece in the @FT (with full wraparound on the paper!) is an exhilarating recognition of what a lot of people have been saying for a long time; rentier capitalism does not deliver productivity growth & undermines democracy https://www.ft.com/content/5a8ab27e-d470-11e9-8367-807ebd53ab77 …pic.twitter.com/2aR7DWvRrx
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.... but then for a solution he leaves us with stopping corporate tax avoidance.....pic.twitter.com/CtYIhYnvji
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I'm not convinced by the IMF working paper he quotes. The problem is 1% of GDP is 'too big' (there is good reason to think this estimate is way over optimistic) and 'too small' (is 1% extra of GDP in government spending really the thing that is going to make the difference??)pic.twitter.com/nvyJhFZ5Pb
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I've written about the IMF working paper ( Crivelli, De Mooij & Keen) before -- its a high end estimate and its not based on economic fundamentals. Its about 5x bigger than the OECD's BEPs estimate for examplehttps://www.cgdev.org/blog/how-big-transfer-pricing-prize-development …
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Yes there is a need to reform the international corporate tax system (and
@PSaintAmans & co are working on it!), but international corporate tax is just not as big an issue (or a solution) that people think it is.pic.twitter.com/28LbU2Noce
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Ending a big thought piece with "stop corporate tax avoidance" is a great feel good way to get a round of applause and stay popular with everyone. But it doesn't answer the question 'how should capitalism be reset' that the FT's wraparound poses.
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IMO they've been saying it in features every weekend for months, but this felt like the definitive version of it. Agree with your calling it an exhilarating recognition. We've seen no similar-minded media in the US or Canada capable of such thoughtfulness. Very impressive.
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Yes I agree. But then the punchline 'corporate tax avoidance' is a let down - it is a real technical issue, but not the answer here. Its a distraction and whistling-in-the-dark if the FT's honest answer to how to reset capitalism is 'we don't know'!
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