by Philipp Bagus
Thomas Piketty´s book, Capital in the Twenty-First Century, on growing inequality in capitalism, has become a bestseller. Piketty offers much data claiming that inequality is rising and draws the conclusion that the state should fix that ‘problem’ with additional taxes on the rich.
It is true that the distance between the ‘super rich’ and the rest of the population has been increasing in recent decades. It has become more difficult to reach average net wealth with an average income. But maybe the most important reason for this development has been widely neglected in the debate: our monopolistic monetary system – as Andreas Marquart and I show in our new book, Blind Robbery! How the Fed, Banks and the Government Steal our Money.
In a fiat money system the costs of money production fall to virtually zero. Thus, the incentive to produce new money is almost irresistible.