Thomas Piketty: The French economist US liberals love

 
French economist Thomas Piketty appears at a lecture in Berkeley, California, on 23 April, 2014. Thomas Piketty has been compared to a modern-day Alexis de Tocqueville

If you want to mingle with the educated elite this weekend, you need to know a little bit about French economist Thomas Piketty and his surprise best-selling book, Capital in the Twenty-First Century.

Mr Piketty uses tax data from a variety of Western countries to tackle the question of income inequality in today's society. He focuses in particular on the increasing concentration of wealth in the hands of an elite few - the much-talked-about "one percent".

Here's how New York Times columnist Paul Krugman describes Mr Piketty's "big idea" in the New York Review of Books:

Start Quote

Whether or not Piketty's grand unified theory is exactly correct, he's moving the popular conversation in the right direction. ”

End Quote Jordan Weissmann Slate

We haven't just gone back to nineteenth-century levels of income inequality, we're also on a path back to "patrimonial capitalism," in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

This is happening, Mr Piketty writes, because the rate of return on capital has been outpacing the rate of economic growth. In layman's terms, the rich are getting richer.

To halt this "drift toward oligarchy", Mr Piketty calls for new a progressive tax on capital - preferably a global one, to prevent wealth from being moved to low-tax nations.

Commentators and columnists on the left have embraced Mr Piketty's book as a landmark treatise that encapsulates what they see as the challenge facing modern US society.

Prof Jacob S Hacker of Yale and Prof Paul Pierson of the University of California - Berkeley call Mr Piketty a modern-day Alexis de Tocqueville, presenting a new "panoramic vista" of US democracy and society.

"Like Tocqueville, Mr Piketty has given us a new image of ourselves," they write. "This time, it's one we should resist, not welcome."

Slate's Jordan Weissmann says that Mr Piketty has handed liberals a "coherent framework that justifies the discomfort that they probably already felt about the wealth gap".

"Liberals, instead of nebulously arguing that they're fighting for the middle class, now have a touchstone that clearly argues they're fighting against the otherwise inevitable rise of the Hiltons," he writes.

"Whether or not Mr Piketty's grand unified theory is exactly correct," he concludes, "he's moving the popular conversation in the right direction."

To give an appreciation for just how much of a conversation topic Mr Piketty's book has become, it was the subject of two columns in Friday's New York Times - one by liberal Krugman and the other by conservative columnist David Brooks.

Start Quote

The soft Marxism in Capital, if unchallenged, will spread among the clerisy and reshape the political economic landscape”

End Quote James Pethokoukis The National Review

Krugman writes that Capital "demolishes that most cherished of conservative myths, the insistence that we're living in a meritocracy in which great wealth is earned and deserved".

Brooks counters that the buzz over Mr Piketty's book is due to the fact that professional liberals often rub elbows with, and are increasingly jealous of, the super-wealthy.

"The reaction to Mr Piketty is an amazing cultural phenomenon," he writes. "But it says more about class rivalry within the educated classes than it does about how to really expand opportunity."

Capital's point, Brooks writes, is that "inequality is not driven by young hip professionals who arm their kids with every advantage and get them into competitive colleges; it's driven by hedge fund oligarchs."

"Well, of course, this book is going to set off a fervour that some have likened to Beatlemania," he concludes.

The National Review's James Pethokoukis worries about the consequences if Mr Piketty's "economic agenda" is successfully "pushed by Washington Democrats and promoted by the mainstream media".

"The soft Marxism in Capital, if unchallenged, will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged," he writes.

"Who will make the intellectual case for economic freedom today?" he asks.

In the Wall Street Journal Daniel Shuchman calls Mr Piketty's book "less a work of economic analysis than a bizarre ideological screed".

He says that Mr Piketty appears to be more preoccupied with inequality than with actual economic growth.

"He assumes that the economy is static and zero-sum; if the income of one population group increases, another one must necessarily have been impoverished," Shuchman writes. "He views equality of outcome as the ultimate end and solely for its own sake."

Mr Piketty's 685-page opus has started a legitimate debate in US political circles. More surprisingly its best-selling success indicates that this conversation is spilling into backyard barbeque and pub table discussions, as well.

 

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  • rate this
    +27

    Comment number 18.

    One can argue economic theory until blue in the face, but the reality is that unrestrained capitalism has led to a situation where powerful wealthy self serving individuals and corporate entities now determine government policy particularly here and in the USA undermining democracy itself. History shows that capitalism has to be inclusive or it will not survive!!!

  • rate this
    +22

    Comment number 72.

    If the uber-Capitalists hate it -it must be worth reading. We need this conversation to balance the onslaught of books promoting unrestrained capitalism in the last decade. We've seen where it got us, beginning with the market crash in 2008 and its cruel aftermath -and continuing with obscene profits and compensation to the captains of industry. Linger on the deserved word "obscene'.

  • rate this
    +21

    Comment number 77.

    To the people on here extolling the virtues of so called capitalism and saying it rewards hard work. Take some time to study the economies we live under, compare it to textbook definitions of capitalism and you'll see we don't have a capitalist system. Every major private sector run industry gets public money underwriting it and subsidising it.

    It's a welfare state for the super rich.

  • rate this
    +17

    Comment number 11.

    #10 cont
    The problem today is that capitalism has become the opposite. Instead of providing a service the world has become dominated by predators and various types of thieves and charlatans - who while making more money than ever provide little or nothing useful to society. At the worst extremes capitalism becomes little more than de-facto theft eg UK electricity or banking (utility & internat).

  • rate this
    +16

    Comment number 71.

    The problem in the US isn't capitalism, but unbridled capitalism. A good start to fix that would be to reenact Glass Steagall to get the banks under control again.

    What made the middle class after WWII was the GI Bill and other social programs. People needed a head start to become middle class. Today's workers need Medicare for all, affordable quality education, and a $10 minimum wage.

 

Comments 5 of 202

 

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