Political Argument over Piketty

It was unusual for the Diet of Japan to raise an academic discussion over economic policy. To discuss separation between the rich and the poor in Japanese society, legislators in the opposite parties introduced Thomas Piketty, author of an epoch-making economics book Capital in the Twenty-first Century, in the discussion at the House of Representatives Budget Committee on Thursday. Prime Minister Shinzo Abe tried to defend his Abenomics as appropriate, only resulting in exposing himself to be irrelevant.

One of the legislators who raised Piketty’s argument was Akira Nagatsuma, who had ran for president of Democratic Party of Japan earlier this month with firm conviction for narrowing the social gap. “Piketty argues that broader gap between the rich and poor harms economic growth. Function of tax to redistribute wealth is necessary,” told Nagatsuma in his question to Abe.

Abe answered to the question with strange argument. “Picketty does not deny economic growth,” he said. No one, including Nagatsuma, denies economic growth, Mr. Prime Minister. The point was balance between growth and redistribution. Nagatsuma was saying that gravity should be more close to the side of redistribution. But, Abe brought the discussion to an extremism of all or nothing. This is how the discussion on the highest organ of state power in Japan is deteriorated.

Then, Abe started routine denouncement of DPJ. “Redistribution without growth makes things worse and worse. This is our difference from DPJ,” told Abe. No one appealed redistribution without growth. DPJ has its own plan for economic growth and is reinforcing it. Abe also quoted Piketty’s indication that Japan had not experienced significant expansion of social gap after 1945. But, the main reason why Liberal Democratic Party was defeated in the election in 2009 was people’s frustration with social gap produced by neo-liberalism economy policy taken by former Premier, Jun-ichiro Koizumi.

At the time legislators were discussing in the Diet, Piketty was making speech in another place in Tokyo. He raised a tendency that concentration of wealth to rich people was in progress in developed counties after 1980s. “Value of asset succeeded as heritage tends to grow in Japan, where less population and low growth are prevalent,” told Piketty about Japan. His view to the future of Japan is not as optimistic as Abe thinks. Piketty’s book marks unusual high sales in Japan. But, it is a phenomenon, in which people use it as a tool of proving academic literacy without precise understanding.