Tax me more, but don’t touch my dishwasher

There was a big fuss a year or so ago about a book by a French chap called Piketty about wealth inequality. He suggested capitalism, aside from an anomalous period between 1930 and 1979, inexorably concentrated wealth at the top.

One interesting defence of inequality is that the rich, by adopting technologies early, redistribute far more of their wealth than we realise by funding R&D and innovation. The first people to pay top dollar for a flat-screen TV or a dishwasher are unwittingly subsidising their wider adoption. As Hayek observed of early adopters of technology: ‘We depend on them, for they finance the invention and reinvention of products whose cost falls to a point where we can afford them’.

Most popular

Matthew Lynn

Spain will regret its 100 per cent expat property tax

When Hayek was writing in 1960 this was inarguably true. The status rivalry of the time was at least focused on buying goods which were useful enough to became mass-produced and mainstream.