Is Thomas Piketty’s book, Capital: In the Twenty-First Century, right? Is economic inequality just a feature of capitalism?
After the 2008 Recession, a lot of questions were asked about the US economy.
What do we do now that the US economy has tanked? What’s my place in this new economic system? Can the US economy ever bounce back?
Yet for the average person, the biggest question looked to be this.
Is the system really fair?
It’s a question that was being asked all around the country from financial analysts on cable news to unemployed factory workers. It’s this core question that set-off the Occupy Wall Street Movement and has those on Wall Street to question the practice of high frequency trading. So in capitalism, does fairness actually exist?
According to French economist Thomas Piketty and his book Capital: In the Twenty-First Century, not so much.
Piketty’s underling thesis in Capital is simple. Capitalism by its very nature breeds economic inequality and the only way this can be rectified is through government intervention. Piketty goes on by warning that if nothing is done about economic inequality and capitalism isn’t reformed, then the very fabric of democracy will be destroyed.
For those that aren’t familiar with Capital, it’s a monster of a book. Even though it’s close to being 700 pages, there is very little fluff in Capital. Piketty crams in more than a decade’s worth of research chronicling the evolution of inequality starting from the Industrial Revolution to present day. Throughout he focuses on the idea of inequality through economic formulas (Return of Capital) and specific historical periods (18th and 19th Century European societal structures).
Not surprisingly, Capital explores inequality from a European perspective. Piketty is a French economist after all. But the ideas talked about in Capital still remain salient to the US economy. For any capitalist society, Capital states if you want to avoid social and economic instability, capitalism needs to be reformed. Piketty offers a solution to the current problem by proposing that there be an annual global wealth tax of up to 2% combined with a progressive income tax as high as 80%.
I can hear the cursing from fiscal conservatives as we speak after reading that last line.
As you might have guessed, not everyone is thrilled with Piketty’s ideas of inequality and capitalism. The Financial Times have even gone as far to refute that Capital possesses data problems which lead to incorrect conclusions. While Piketty has responded to the allegations, it’s not surprising there is so much pushback. When it comes to the topic of capitalism, you don’t have to go far to find opponents or supporters.
During the hours spent tackling Capital, you might find yourself surprised or even lost with trying to comprehend some of Piketty’s findings. But the one thing everyone is guaranteed to have is an opinion on them.
Reviewer’s Take: Don’t be fooled by the book’s length, there is little to no filler in Piketty’s ‘Capital’. With that said, if you can get through the dense historical analysis and complicated economic formulas, you’re treated to one of the most in-depth books on economic inequality that exists today.