Capital in the Twenty-First Century

Thomas Piketty
What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality. Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality--the tendency of returns on capital to exceed the rate of economic growth--today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again. A work of extraordinary ambition, originality, and rigor, Capital in the Twenty-First Century reorients our understanding of economic history and confronts us with sobering lessons for today.

Reviews

Reviewed: 2021-01-19
Perfectly interesting and important.

However, I had to hold a list of "well that (A) is incorrect", "well (B) is incorrect" ... in my head while reading. I think I got to six before I abandoned this book. I can only recall two now:

1. While excusing himself at great (great) length for being a financial economist "oh, they know nothing about the real world ... unlike me" he then is only able to evaluate the worth of items via their price. At one stage, talking about the total unimproved value of lands in the North America, he discusses how this land mass's value as capital increased over the century after white settlement began. Instead, in reality, its monetary price greatly increased. It's weird, as this is also one of his main themes.

2. His yardstick and special contribution is Captial per unit of Revenue, with a - get this - highest ratio of Capital to Revenue being a sign of advancement. OK, maybe. However, this is the opposite, inverse, to ROI, the ubiquitous valuation measure of the economic success of an enterprise. Maybe his complete inversion of this century's measurement approach is correct. But he doesn't even spare a sentence to justify his 'revolution'.

In a world where "conspiracy theories" supported by large piles of evidence and opposed only by impossible claims are easily discarded by the stupidest 80% of the population, Piketty's lack of support for his major claims is unacceptable.

I read about a third, or maybe only a quarter of this book. The only reason this book gets three stars is that there are many interesting ideas scattered through it.
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