Nauseating but true: the FCC voted today to allow the creation of ‘fast lanes’ on the Internet — in other words to undermine the principle of Net Neutrality. At the same time the Chairman denied that it was doing that.

“There is one Internet. It must be fast, it must be robust, and it must be open,” FCC Chairman Tom Wheeler said this morning. And with that, the FCC voted to move forward with a plan that will make the Internet less open.

This is the kind of doublespeak Wheeler has engaged in since early details of his net neutrality plan have emerged — and alarmed big tech companies, startups, venture capitalists, advocacy groups and others, who have spoken out in hopes of saving the open Internet. Despite seemingly contradictory language in a fact sheet put out by the FCC, the plan by Wheeler, who got the 3-2 vote he needed today, would allow broadband providers to charge content providers for faster delivery of their offerings. This is being commonly referred to as the creation of Internet fast lanes. But Wheeler says those broadband companies won’t be allowed to block or slow network traffic.

LATER:

I think it would be more accurate to say that the FCC funked a clear decision and kicked the issue into the long grass for the time being. Farhad Manjoo has a more judicious summary in the NYT. But it won’t go away.

Interesting post by Dani Rodrik of Princeton about the reception of Piketty’s book;

I would have liked to claim that I was prescient in foreseeing the huge academic and popular success that the book would have upon publication. In truth, the book’s reception has been a big surprise.

For one thing, the book is hardly an easy read. It is almost 700 pages long (including the notes), and, though Piketty does not spend much time on formal theory, he is not beyond sprinkling an occasional equation or Greek letters throughout the text. Reviewers have made much of Piketty’s references to Honoré de Balzac and Jane Austen; yet the fact is that the reader will encounter mainly an economist’s dry prose and statistics, while the literary allusions are few and far between.

So why has it become a publishing sensation?

Rodrik thinks it has to do with the Zeitgeist.

It is difficult to believe that it would have had the same impact ten or even five years ago, in the immediate aftermath of the global financial crisis, even though identical arguments and evidence could have been marshaled then. Unease about growing inequality has been building up for quite some time in the United States. Middle-class incomes have continued to stagnate or decline, despite the economy’s recovery. It appears that it is now acceptable to talk about inequality in America as the central issue facing the country. This might explain why Piketty’s book has received greater attention in the US than in his native France.

Brad DeLong has an interesting blog post about the feebleness of right-wing criticism of Thomas Piketty’s book. Drawing on Kathleen Geier’s very useful round-up of conservative reviews, he concludes:

But the extraordinary thing about the conservative criticism of Piketty’s book is how little of it has developed any of these arguments, and how much of it has been devoted to a furious denunciation of its author’s analytical abilities, motivation, and even nationality.

Clive Crook, for example, argues that “the limits of the data [Piketty] presents and the grandiosity of the conclusions he draws…borders on schizophrenia,” rendering conclusions that are “either unsupported or contradicted by [his] own data and analysis.” And it is “Piketty’s terror at rising inequality,” Crook speculates, that has led him astray. Meanwhile, James Pethokoukis thinks that Piketty’s work can be reduced to a tweet: “Karl Marx wasn’t wrong, just early. Pretty much. Sorry, capitalism. #inequalityforevah.”

And then there is Allan Meltzer’s puerile accusation of excessive Frenchness. Piketty, you see, worked alongside his fellow Frenchman Emmanuel Saez “at MIT, where…the [International Monetary Fund’s] Olivier Blanchard, was a professor….He is also French. France has, for many years, implemented destructive policies of income redistribution.”

Combining these strands of conservative criticism, the real problem with Piketty’s book becomes clear: its author is a mentally unstable foreign communist. This revives an old line of attack on the US right, one that destroyed thousands of lives and careers during the McCarthy era. But the depiction of ideas as being somehow “un-American” has always been an epithet, not an argument.

Now, in center-left American communities like Berkeley, California, where I live and work, Piketty’s book has been received with praise bordering on reverence. We are impressed with the amount of work that he and his colleagues have put into collecting, assembling, and cleaning the data; the intelligence and skill with which he has constructed and presented his arguments; and how much blood Arthur Goldhammer sweated over the translation.

To be sure, everyone disagrees with 10-20% of Piketty’s argument, and everyone is unsure about perhaps another 10-20%. But, in both cases, everyone has a different 10-20%. In other words, there is majority agreement that each piece of the book is roughly correct, which means that there is near-consensus that the overall argument of the book is, broadly, right. Unless Piketty’s right-wing critics step up their game and actually make some valid points, that will be the default judgment on his book. No amount of Red-baiting or French-bashing will change that.

Full post

Wonderful lecture by Noam Chomsky. The economy in question is that of the United States. A masterclass in the use of irony.

Valiant attempt to explain something that most politicians don’t appear to get.

Thomas Piketty’s book has taken the Anglo world by storm, but has been out for two years in France without generating anything like the same fuss. Why?

One reason, perhaps, is that the French didn’t think it was left-wing enough. Another reason, muses the Economist,

is that questions about inequality, the centrepiece of Mr Piketty’s research, have long been central to the political debate in France, a country that already has an annual wealth tax on assets. This has been true for the right as much as for the left. Jacques Chirac, a Gaullist, was first elected president by campaigning to mend the country’s “social fracture”. Mr Hollande was at his most passionate on the campaign stump when denouncing the world of finance as his “chief adversary”, and the super-rich as “grasping and arrogant”. In short, drawing attention to resurgent inequality has a sense of novelty in America, but in France it is a political given.

That seems about right to me. I am reminded of the row there was many years about the decision to ‘rebrand’ Free Software as ‘Open Source’. The reason? Lots of people in the free software movement thought that it was being held back by the fact that the US corporate world sees the word “free” as synonymous with communism. It’s nuts, but that’s America for you.

I’m reading Thomas Piketty’s Capital in the Twenty-First Century, which is unlike any other economics book I’ve read in the last twenty years.

It reminds one that his subject was once known as political economy for the very good reason that economics and politics really belong together. As Bertrand Russell once observed, “economics is the study of how people make choices while sociology is the study of how they don’t have any choices to make”, and since the absence of choices (aka inequality) is a political matter then writing about economics also involves writing about (small-p) politics.

Another distinctive thing about Piketty’s book is that it’s intensely readable and has lots of cultural references. In that sense, he’s more like Keynes than he is like, say, Kenneth Arrow. He knows the films of Tarantino, and has read Balzac and Jane Austen. He talks about our societies reverting to “the Downton Abbey world” of a century ago.

The book is a 577-page doorstep but, strangely, its central core is easy to summarise. Here’s how the Guardian‘s Economics Editor, Larry Elliott, puts it:

The gist of Piketty’s book is simple. Returns to capital are rising faster than economies are growing. The wealthy are getting wealthier while everybody else is struggling. Inequality will widen to the point where it becomes unsustainable – both politically and economically – unless action is taken to redistribute income and wealth. Piketty favours a graduated wealth tax and 80% income tax for those on the highest salaries.

Or, to put it even more simply: the capitalism we’ve got is unsustainable, and we need to do something about it.