Theoretical and Policy Conclusions
What is unfolding in front of our eyes is the greatest emancipatory achievement of humankind since the Enlightenment. The danger is, however, that countries predominantly and lastingly based on rent-seeking tend to be economically stagnating or declining and socially unstable. The purpose of this book was not to make a case against rent-seeking and for profit-seeking. Pareto’s observation seems to be insightful still today: a modern market economy needs both speculators and rentiers: foxes and lions. But too many foxes, too much speculation, too much unrestrained markets can cause instability, The lowest possible VAT and modest taxes on wages and profits compensated by as high tax rates on inheritance and capital gain taxes as practically possible, seem to serve both social justice and economic dynamism.
KeywordsCross-country equalization of incomes Rising within-country inequalities Speculation Rentiers Wealth tax Inheritance tax VAT
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