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Capital In The 21st Century (2000)

by Thomas Piketty(Favorite Author)

3.96 of 5 Votes: 5

languge

English

genre

History & Biography

publisher

Belknap Harvard

review 1: What I liked most about the book was probably what a lot of readers disliked: Piketty presents reams and reams of empirical data, from multiple countries, going back three hundred years. He is the rare economist that grounds his work in that mass of empirical data, rather than the usual habit of coming up with a theory and then finding a bit of data that supports it (or, to be slightly more fair, noticing some "stylized facts" (and cherry picking a data set to illustrate them) and then developing a theory to explain them.For example, Piketty shreds Modigliani's life cycle savings model. Now Mankiew has come up with yet another criticism of Piketty's contention that r > g leads to ever increasing inequality. Mankiew says the former shouldn't lead to the latter because of va... morerious theoretical arguments about the marginal propensity to consume out of wealth; estate taxes; marginal tax rates on capital, etc. but totally ignores Piketty's empirical data that both income and wealth inequality have become steadily worse since the 1970s. I would really like to see Piketty's book become the foundation for all macro-economics and growth courses. Any academic who wants to come up with various new theories about the dynamics of economic growth should have to refer to the relevant empirical data. What a concept!
review 2: Although parts of the book were hard to digest, it was surprising easy to read for a 500+ page economic tome. I really enjoyed it both as a solid analysis of the history and future of capitalism and of a refutation of the rather weak and self serving brand of free market economics that masquerades as scientific truth and dominates right wing politics. I had long felt that economics seemed relatively divorced from reality since statistics could be cherry picked to support just about any theory or policy. This book does a splendid job of cutting through the noise to some cold hard facts that, limited as they are, help to anchor the debate. Capitalism seems headed on a course of divergence with the richest 1% owning an ever increasing share of the wealth and the bottom 90% owning an ever shrinking share. Piketty convincingly shows the free market will not fix itself with regard to this problem. Our political leaders need to take steps to prevent the in-egalitarian spiral that is under way and his suggested solution of a progressive tax on capital would be a great first step to reining in the divergence. less

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