A book by French economist, recently published in English translation, is attracting considerable attention. Here are portions of one review of the book, which I have added to my ‘must read’ list.
French economist Thomas Piketty has written an extraordinarily important book. Open-minded readers will surely find themselves unable to ignore the evidence and arguments he has brought to bear. ….
Among the lessons is that there is no general tendency towards greater economic equality. Another is that the relatively high degree of equality seen after the second world war was partly a result of deliberate policy, especially progressive taxation, but even more a result of the destruction of inherited wealth, particularly within Europe, between 1914 and 1945. A further lesson is that we are slowly recreating the “patrimonial capitalism” – the world dominated by inherited wealth – of the late 19th century. ….
Yet the book also has clear weaknesses. The most important is that it does not deal with why soaring inequality – while more than adequately demonstrated – matters. Essentially, Piketty simply assumes that it does. ….
For me the most convincing argument against the ongoing rise in economic inequality is that it is incompatible with true equality as citizens. If, as the ancient Athenians believed, participation in public life is a fundamental aspect of human self-realisation, huge inequalities cannot but destroy it. In a society dominated by wealth, money will buy power. Inequality cannot be eliminated. It is inevitable and to a degree even desirable. But, as the Greeks argued, there needs to be moderation in all things. We are not seeing moderate rises in inequality. We should take notice.
Martin Wolf, “‘Capital in the Twenty-First Century’”, by Thomas Piketty“, Financial Times, 16 April 2014.
Martin overlooks the fact that Athenian society was very unequal. Only about 20% of Athenian residents were citizens. The vast majority – slaves, freed slaves, women and others – were excluded from voting and from participation in public affairs.
Martin is reviewing Capital in the Twenty-First Century, by Thomas Piketty, translated by Arthur Goldhammer (Harvard University Press, 2014). Read his complete review at the link above (free registration required).