| name = Capital in the Twenty-First Century | title_orig = Le Capital au XXIe siècle | translator = Arthur Goldhammer | image = File:Capital in the Twenty-First Century (front cover).jpg | author = Thomas Piketty | illustrator = | caption = | country = France, United States | language = French, English | series = | subject = Capitalism, Economic history, Economic inequality | genre = | publisher = Éditions du Seuil, Belknap Press | pub_date = August 2013 | english_pub_date = April 2014 | media_type = Print (Hardback) | pages = 696 | isbn = ISBN 978-0674430006 | dewey= | congress= | oclc= | preceded_by = | followed_by = }}

Capital in the Twenty-First Century is a 2013 book written by French economist Thomas Piketty. It focuses on the wealth and income inequality and their variation and distribution since the 18th century, using datasets from many countries.

The book has been compared to Marx's Das Kapital, improving his analysis by using modern economic data.^[1]

Contents

The central thesis of the book is that inequality is not an accident, but rather a feature of capitalism and that these excesses of capitalism can only be reversed through state intervention.^[2] The book thus argues that unless capitalism is reformed, the very democratic order will be threatened.^[2]

The trend towards higher inequality was reversed between 1930 and 1975 due to some rather unique circumstances: the two World Wars, the Great Depression and a debt-fueled recession destroyed much wealth, particularly that owned by the elite.^[1] These events prompted the governments to undertake steps towards redistributing income and the fast economic growth meant that inherited wealth had its importance reduced.^[1]

The book argues that the world is returning towards "patrimonial capitalism", in which much of the economy is dominated by inherited wealth and that their power is increasing, creating an oligarchy.^[3] In order to illustrate a society that has a rigid class structure based on accumulated capital, Piketty uses examples from the novels of Honoré de Balzac, Jane Austen and Henry James.^[1]

Piketty predicts a world of low economic growth, dismissing the idea that bursts of technological advances will bring the growth back to the levels of the 20th century, arguing that we should not base ourselves on the "caprices of technology."^[1]

As a solution to extreme inequality, Piketty proposes an annual global wealth tax of up to 2%, combined with highly progressive income tax reaching as high as 80%.^[1]

Reception

Paul Krugman called it a "magnificent, sweeping meditation on inequality"^[4] and "the most important economics book of the year — and maybe of the decade."^[3]

Arnold Kling pointed out however that Krugman did not accept a central thesis of Pickettys book, that capital accumulation is responsible for the recent decades rise in income inequality. "the fact is that the most conspicuous example of soaring inequality in today’s world—the rise of the very rich one percent in the Anglo-Saxon world, especially the United States—doesn’t have all that much to do with capital accumulation, at least so far. It has more to do with remarkably high compensation and incomes."^[5]

Clive Crook, while being strongly critical of the book, acknowledged that "it's hard to think of another book on economics published in the past several decades that's been praised as lavishly".^[6]https://en.wikipedia.org/w/index.php?title=Capital_in_the_Twenty-First_Century&action=edit#

Steven Pearlstein called it a "triumph of economic history over the theoretical, mathematical modeling that has come to dominate the economics profession in recent years", but also added, "Piketty’s analysis of the past is more impressive than his predictions for the future are convincing."^[1]

Branko Milanovic, a former senior economist at the World Bank, called the book “one of the watershed books in economic thinking.”^[7][8]

British historian Andrew Hussey called the book "epic" and "groundbreaking" and argues that it proves "scientifically" the Occupy movement was correct in its assertion that "capitalism isn't working."^[9]

Ryan Cooper writing in The Week described the book as a "brilliant, surprisingly readable work that synthesizes a staggering amount of careful research to make the case that income inequality is no accident." He also notes that "If Piketty is correct, he has laid the intellectual groundwork for a resurgence of American socialism."^[2]

The book has been described as “a political and theoretical bulldozer” in the French press.^[10]

The Economist writes "a modern surge in inequality has new economists wondering, as Marx and Ricardo did, which forces may be stopping the fruits of capitalism from being more widely distributed. 'Capital in the Twenty-First Century' ... is an authoritative guide to the question."^[11]

James K. Galbraith criticized Piketty's book by saying, "Despite its great ambitions, his book is not the accomplished work of high theory that its title, length, and reception (so far) suggest."^[12]

Critiques

In a supportive review, Paul Krugman wrote:

At a time when the concentration of wealth and income in the hands of a few has resurfaced as a central political issue, Piketty doesn’t just offer invaluable documentation of what is happening, with unmatched historical depth. He also offers what amounts to a unified field theory of inequality, one that integrates economic growth, the distribution of income between capital and labor, and the distribution of wealth and income among individuals into a single frame. . . . Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.^[4]

In another supportive review, Will Hutton wrote:

Like Friedman, Piketty is a man for the times. For 1970s anxieties about inflation substitute today's concerns about the emergence of the plutocratic rich and their impact on economy and society. Piketty is in no doubt . . . that the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism. He has proved it.^[13]

In a critical review, Clive Crook wrote:

Aside from its other flaws, "Capital in the 21st Century" invites readers to believe not just that inequality is important but that nothing else matters. This book wants you to worry about low growth in the coming decades not because that would mean a slower rise in living standards, but because it might . . . worsen inequality. In the frame of this book, the two world wars struck blows for social justice because they interrupted the aggrandizement of capital. We can't expect to be so lucky again.^[6]

James K. Galbraith, in another critical review, wrote:

Piketty wants to provide a theory relevant to growth, which requires physical capital as its input. And yet he deploys an empirical measure that is unrelated to productive physical capital and whose dollar value depends, in part, on the return on capital. Where does the rate of return come from? Piketty never says.^[12]

Editions

• Template:Fr icon Le Capital au XXIe siècle, Éditions du Seuil, Paris, 2013, ISBN 9782021082289
• Template:En icon Capital in the Twenty-First Century, Harvard University Press, 2014, ISBN 9780674430006

See also

• Criticism of capitalism
• Gilded Age

References

External links

• The book's official website, including data and sources
• Text from Introduction to Capital in the Twenty-First Century
• YouTube video of Thomas Piketty describing Capital in the Twenty-First Century