Capital in the Twenty-First Century (Thomas Piketty 2014)

Review From User :

Given the amount of hype and misinformation around this book, I'll start by saying what Capital in the 21st century is not about.

This book is NOT:

1. A work of opinion journalism or punditry. Though, obviously, it does contain the views of its author
2. A prescriptive manifesto trying to explain how to utterly eradicate inequality worldwide, though its author does feel constructive steps can be taken to reduce such inequalities.
3. A work of Journalism written in response to the recession of 2007-2008 or to cheaply capitalize on the surge of public interest in matters financial in recent years, though obviously anyone interested in those topics will find it intensely engaging.

This book is a staggeringly in-depth, wide-ranging, rigorously researched, endlessly quantified and qualified work of economic history. Thomas Piketty is interested in wealth. Where does it come from, how do we talk about, how can we understand its history in a modern context and what does its distribution at different levels tell us about our world, and perhaps most of all, how might that distribution be problematic

In order to attempt to answer these questions, he has collected, organized and presented an unprecedented volume of data, not merely about where wealth is concentrated now, but where it has been concentrated using data from multiple countries going back to the 19th century (and in the case of his native France, even a bit further than that). The real power of this book, and I suspect one reason its been praised/condemned so militantly in recent months lies in its macro-economic, longitudinal perspective. Piketty is interested in what the broadest net of information possible tells us about capital in the modern age. And what it tells is powerful, disillusioning and ultimately humiliates economic dogma of every ideological stripe.

He's so concerned about explicating this information, with breaking it down with a litany of analogies and concrete examples, and with talking about its limitations and potential pitfalls, that at times the reader almost doesn't see the intimidatingly complete picture of modern wealth inequality he has built up. Reading this is like watching an adult walk into a room full of people who have long since forgotten how to be adults. He synthesizes the best ideas from economic thinkers as diverse as Marx, Ricardo, Kuznets, etc while at the same time utterly humiliating their worst ideological tendencies with the sort of data they either didn't have or were simply too driven by their own dogmas to even consider assembling.

The picture he paints of the state of inequality of wealth in our world is harrowing precisely because of how pragmatically clinical it's put together. There is precisely no observable economic force (no free-market, or growth rate or invisible hand) or principle or idea, that will prevent wealth from continuing its already stratospheric concentration into fewer and fewer hands at levels which we haven't seen since the 19th century. Indeed, one suspects the reason so many of the book's historical and cultural references (Jane Austen and Honre de Balzac show up in this book, much to the shock and delight of this overly-humanistic reviewer) come from the 19th century is because, as Piketty shows, we are quickly returning to a world where economic inequality resembles and quite likely will exceed the sort of stratification seen in 1800's europe. In short, all the indicators he presents show a possible future where personal initiative and hard-work will be worth nothing compared to the power of returns on super-concentrated and largely inherited securities and private fortunes.

That any sincere economic analysis could even hint (and this book goes way beyond hinting) that the future of capital would look like the hyperbolic plane of unfathomable wealth and unbearable poverty that animated so much of the 19th century, should give a pause to even the most militant neo-liberal policy advocate. Piketty's conclusions, rooted as they are in a wealth of historical data drawn over a century and a half, are dramatic, alarming and above all, profound. There is no historical example to be found of a society whose concentration of wealth has continued to grow unabated at the level ours has without inevitably facing some profound, usually gruesome sociopolitical upheaval.

Whether the extremely pro-active, and as he admits, pie in the sky, idea of a global tax on wealth is really possible will probably remain to be seen. But the real point is that meaningful, coordinated international action on transparency and taxation is worth attempting. As the book constantly reiterates with a slew of compelling data, the only other force which has ever stemmed the tide of such wealth disparities was the chaotic, murderous world war period from 1914-1945. Surely attempting to address this problem now is superior to waiting for a global blood-bath, or a French Revolution round 2 to tip the scales back. As Piketty's pragmatic reading of economic history proves, no outcome is guaranteed, but numbers can tell you a lot more than nothing.

This is a demanding book, maybe not Hegel or Heidegger-level demanding, but it requires discipline and a willingness to be lead through some very important, brilliantly elucidated data. Piketty has attempted a grand synthesis of economics and history which also incorporates ideas from literature, sociology, politics and psychology. What's more, he has done so in a way which virtually anyone with a high school diploma and a bit of patience can find accessible.

Capital in the 21st century is that rarest of things; a non-fiction book of the moment which could very well prove to be the book of its age. It will certainly haunt my perspective for some time to come. I recommend this book unconditionally.


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