Capital, capitalism, and inequality

Capital in the Twenty-First CenturyCapital in the Twenty-First Century by Thomas Piketty
My rating: 3 of 5 stars

I read this more quickly than I might have since I was trying to keep up for a book discussion and the central argument is pretty clear: r > g (the rate of return on capital is greater than the rate of economic growth). He demonstrates this in many ways, so the book has a repetitive feel to it. From my understanding of the discussion surrounding the book, the assembling of this economic data was really important, so I’m grateful to Piketty and his fellow economists for doing this work.

I appreciated what appeared to be Piketty’s realism about the economic patterns of the 20th century. He notes that the glory years of the European economic equality (1945-1975) were possible because of the massive destruction of wealth in the two world wars and the Great Depression as well as the programs passed because of these events. Yet unlike many that are left of center, he does not treat this as the natural state of things, and he shows that economic inequality is returning to previous levels since the 1970s. He also recognizes the challenges of creating the kind of robust social democratic welfare state that he wants. One thing that he misses in all of this is that, it seems to me, American political culture has much of the same sense of nostalgia for the same period. I think that the maxim that conservatives want to live in the 50s and liberals want to work in the 50s is true and shows the reality that we as Americans often take our post-World War II economic dominance for granted, when it was actually the result of a set of historical conditions.

I can’t really comment on Piketty’s economic methodology, and I am not bothered by economic inequality in the same way that he is. I believe that he focuses too much on how the economic pie is divided rather than the fact that the pie continues to grow and living standards continue to rise. But surely you will be able to find more competent reviews than mine if you wish to read more. I appreciated Brad Littlejohn’s review here:….

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