Piketty's Capital: An Economist's Inequality Ideas Are All the Rage
By Megan McArdle May 29, 2014
A specter is haunting Europe and the U.S.—the specter of plutocracy. In Britain, Deputy Prime Minister Nick Clegg has suggested the moment has arrived to consider a wealth tax. In France, which already has one, plans to ease its bite were recently canceled. Even in the more timid precincts of Washington, you cannot swing a V for Vendetta mask without hitting a think tank panel on inequality. Everyone, it seems, is worried we are shortly headed for a world in which a handful of rich people will own everything, and the rest are forced to rent their air and water from Mark Zuckerberg.
Small wonder, then, that French economist Thomas Piketty’s Capital in the Twenty-First Century has ignited an ideological fervor reminiscent of a Paris mob at the gates of the Bastille. The title seems to be a puckish homage to Karl Marx’s Capital. Although Piketty disdains Marx’s unsystematic thinking, they share a core concern about wealth run amok or rather too much concentrated in one place. Piketty speaks for a lot of people when he voices a dark half-prophecy that the forces of capital accumulation will leave us with a society radically less equal, less mobile, perhaps even less democratic. As he puts it, “The past devours the future.”
Booksellers have been unable to keep Capital on their shelves. (The physical version is vastly more popular than the Kindle edition; people apparently prefer to haul around the 700-page tome, or maybe leave it on the coffee table where guests can see it.) Its publisher, Harvard University Press, is rushing out another printing of the hardcover. This runaway success may not seem too surprising in an era when President Obama has called inequality “the defining challenge of our time.” However timely the argument, the book itself is not what one thinks of as popular reading. “When the book came out,” says economics professor Brad DeLong, of the University of California at Berkeley, “I thought it had an audience of three people in Berkeley”—himself, economic historian Barry Eichengreen, and Christina Romer, former head of the president’s Council of Economic Advisers.
Tyler Cowen, an economics professor at George Mason University, writes in Foreign Affairs that “although the book’s prose (translated from the original French) might not qualify as scintillating, any educated person will be able to understand it—which sets the book apart from the vast majority of works by high-level economic theorists.” There’s surprisingly little math or jargon and a delightful number of literary references to illustrate the historical evolution of capital in rich societies. Which by no means erases the fact that Capital in the Twenty-First Century is still a book by an economist for people who find it comfortable, even enjoyable, to have a little light algebra in their beach reading. How did this book work its way to the top of Amazon.com’s (AMZN) ranks, right up there with The Conscious Parent and Frozen Little Golden Book?
Part of the answer is controversy. Liberals love its affirmation of their sense that the rich have never been richer, while conservatives worry it is an attempt to steal a base in the ongoing battle to tax private wealth. Capital in the Twenty-First Century is a perfect stand-in for collective anxiety about the fate of the middle class, from Occupy Wall Street’s concern that the 1 Percent are leaving the rest of us to an increasingly impoverished future, to the growing worry on the right that inequality springs from and is creating a vicious cycle of economic instability and cultural breakdown among the two-thirds of the American population who lack a college diploma. The book doesn’t speak to our current situation nearly as much as many buyers probably think. But the conversation it has provoked very much does.
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http://www.businessweek.com/articles/2014-05-29/pikettys-capital-economists-inequality-ideas-are-all-the-rage