Lars P. Syll — Thomas Piketty and fierce critiques of brilliantly silly economic models

Quotes Emily Eakin/The Chronicle Review

The French economist Thomas Piketty arrived in Washington, D.C., on Sunday for a week of talks at some of the nation’s leading policy-research centers but which might as well have been billed as a victory lap up the East Coast. The English translation of Piketty’s new book, Capital in the Twenty-first Century, a formidably rigorous, 700-page history of wealth, out barely five weeks, had just made The New York Times’s best-seller list. But even before it appeared, on the strength of a handful of advance reviews and a surge of Internet buzz, Piketty’s transformation was complete: from respected researcher on income distribution to ranking heavyweight, a scholar who, armed with reams of data and charts—and, unusual for an economist, a gilded tongue—proposed to upend decades of mainstream wisdom on inequality though an unprecedented analysis of the past.

This is a sea change in political economy.

“For far too long,” he writes, “economists have sought to define themselves in terms of their supposedly scientific methods. In fact, those methods rely on an immoderate use of mathematical models, which are frequently no more than an excuse for occupying the terrain and masking the vacuity of the content. Too much energy has been and still is being wasted on pure theoretical speculation without a clear specification of the economic facts one is trying to explain or the social and political problems one is trying to resolve.”

Translation: The emperor is naked.

Capital in the Twenty-first Century, Piketty makes clear, is his notion of what economics scholarship should look like: combining analyses of macro (growth) and micro (income distribution) issues; grounded in abundant empirical data; larded with references to sociology, history, and literature; and sparing on the math. In its scale and scope, the book evokes the foundational works of classical economics by Ricardo, Malthus, and Marx—to whose treatise on capitalism Piketty’s title alludes.

Back to the high ground.

Less likely to endure is Piketty’s remedy for inequality: a progressive global wealth tax on fortunes over 1-million euros.

In Washington, a policy town, remedies were what many of Piketty’s commentators wanted to talk about, and they tended to dismiss his proposal, while taking the opportunity to promote their own ideas instead.

The Overton window is shifting to the left after being pushed rightward for decades under neoliberalism.

Thomas Piketty and fierce critiques of brilliantly silly economic models

Lars P. Syll | Professor, Malmo University