My esteemed friend Kim Andersen has no tolerance for fake news; it’s only the real thing for Big Kim, and as such, he forwarded to a group of friends this important link to an article in a British newspaper.
A fellow recipient quickly replied, “It’s always nice when science confirms the obvious.”
Having finally gotten down to the business of reading Thomas Piketty’s Capital in the Twenty-first Century, I can concur with this conclusion.
Most of us have long since grasped that since human planetary times began, a relatively small proportion of the planet’s population has acquired and hoarded a disproportionate amount of wealth.
I dimly recall the testimony of one or the other Greek philosopher to the effect that if we evenly distributed wealth among the population, it would be a futile gesture, as quickly the proportion would return to its previous imbalance.
Piketty sets out to prove the persistence of inequality, using statistics from as far back as the French Revolution — when the top 1% controlled about 98% of the wealth in France. Insofar as inequality has lessened in the world since then, it’s because tumultuous wars (I and II) and confiscatory tax rates had the effect of redistributing wealth.
In short, we’re back to a widening gap between the haves and have-nots — something obvious, though it’s nice to have academic support.
It would seem that Piketty did his best to write for numbskulls like me, patiently explaining esoteric concepts, and loading the pages with charts and graphs. Still, I made the editorial decision to skim where merited, and concentrated on the summaries and high points — and these high points are collected in the overview below.
Interestingly, upon the book’s release, economists on the “left” criticized Piketty for defining capital as aggregate wealth. Had Yanis Varoufakis not been called to the Greek finance ministry in 2015, he might have embarked on a lucrative career as left-wing debunker of Piketty, accusing the Frenchman of conflating wealth with capital.
And yet even Varoufakis didn’t contest the overall conclusion — a small percentage of humans controls a disproportionate amount of the capital (or the wealth), with disturbing repercussions for the rest of us.
For the next six days, I’ll be publishing a link per day to web material related to Thomas Piketty and Capital in the Twenty-first Century. Piketty generally has been praised for the sheer depth of his research, and criticized for failing to offer a solution to the problem apart from a global tax on wealth, which strikes most observers as unlikely.
Pitchforks, anyone? We begin with a cheat sheet.
Thomas Piketty’s “Capital in the Twenty-first Century” explained, by Mike Llewellyn (Ideas.Ted)
A Piketty guide for lifelong learners.
When Thomas Piketty’s “Capital in the Twenty-first Century” was published, it was something of a sensation. That’s no small feat for a chart-heavy doorstop on “the dismal science” of economics.
A fair portion of the book’s notoriety was due to its subject matter: wealth distribution, an intensely political topic if ever there was one.
What makes this French economist’s conclusions worth global notice? The short answer is that Piketty and his research team amassed a mountain of data, much of it going back centuries, suggesting that the concentration of wealth in ever-fewer hands is not an anomaly or a recent development. Check out the infographic (above) for a longer explanation:
As the data visualization above suggests, this is simply how capitalism works. Without a significant force to counterbalance rising wealth inequality, the research indicates, a capitalist economy will drift predictably toward oligarchy.