Lars Syll — Real-world economics review special issue on Piketty’s Capital

This is a great line up.

BTW, I am reading Capital, slowly, and am over the moon impressed with Piketty's approach, style, and capability as a writer of technical non-fiction. The translation is also admirable for its English, although I haven't compared it with the French. However, it's accuracy is universally praised and it reads very well. This is indeed a landmark book and if you don't read the whole tome, at least read the intro and conclusion.

The consensus seems to be that whatever one thinks of the rest of the work, the empirical research is the big deal. I would dispute that. The question immediately arises, well, what took economics so long to come up with this. The obvious answer is that the methodology is amiss.

This reveals the real contribution of the book. Piketty is saying that the currency approach to economics is just wrong-headed. A more appropriate method is needed. He proposes a general outline for it, which is less mathematical rigor along the lines of the natural sciences and more integration with the social sciences and humanities, especially history with respect to empirical data. But he also makes use of philosophy and literature in a masterly way. 

Economics is a complex subject and it requires a nuanced methodological approach, especially with respect to the big issues. Econometric modeling may be suitable for some economic issues, but it is not a blanket method and using it as such is inappropriate to the subject matter. In the attempt to be scientific, the discipline has become unscientific because it has departed to far from the empirical in the fascination with formal rigor.

Piketty is solidly in the heterodox camp, although he is recognized as expert in neoclassical modeling as a former MIT economics professor. But he much more in the mold of Adolf Lowe, who was an economic sociologist, and Kenneth Boulding who was a pioneer of a general systems approach in economics. Of course, Piketty is also an economic historian par excellence, with fingertip knowledge of the history of capitalism.

While heterodox economics has been around for a long while, indeed the classical economists were closer to the present day heterodox economists than to the "orthodox" neoclassicists, No heterodox economists or school has been able to successfully assault the basin of orthodoxy that controls the major departments and journals, largely because orthodoxy refuses to engage. Piketty's work seems to be changing that and Capital in the 21st Century could a transformative historically. At the very least, it is heavy artillery lobbing shells into the orthodox bastion. After the GFC that embarrassed orthodoxy for missing and doubly so in its inability to repair the damage in a timely way, orthodoxy is now having to struggle with issue of income and wealth inequality and its approach, or non-approach, to distribution. Piketty's work is increasing that embarrassment.

Not that there are no issues with Piketty's method in Capital from the heterodox POV, as some heterodox economists have pointed out. Presumably, there is more of this in the special issue of RWER. Of course, PIketty is not the last word but perhaps the first word to effectively advance the cause of heterodoxy by forcing at least some of the orthodox to take notice.

Lars P. Syll’s Blog
Real-world economics review special issue on Piketty’s Capital
Lars P. Syll | Professor, Malmo University