Thomas Piketty's Capital in the Twenty-First Century is a hefty 700 pages long, but if one were to collect together all reviews of the book into a single volume it would doubtless be heftier still. These range from glowing to skeptical to largely dismissive; from cursory to deeply informed. Questions have been asked (and answered) about the book’s empirical claims, and some serious theoretical challenges are now on the table.Conclusion
Most reviewers have focused on Piketty’s dramatic predictions of rising global wealth inequality, which he attributes to the logic of capital accumulation under conditions of low fertility and productivity growth. I have little to say about this main message, which I consider plausible but highly speculative (more on this below). Instead, I will focus here on the book’s many interesting digressions and subplots.
This is how I interpret Piketty's main message: if the historically significant emergence of a propertied middle class were to be reversed, social and political tremors would follow. But how are we to evaluate his claim that such a reversal is inevitable in the absence of a global tax on capital? His argument depends on interactions between demographic change, productivity growth, and the distribution of income, and without a well-articulated theory that features all these components in a unified manner, I have no way of evaluating it with much confidence.Plots and Subplots in Piketty's Capital
Piketty's attitude towards theory in economics is dismissive; he claims that it involves “immoderate use of mathematical models, which are frequently no more than an excuse for occupying the terrain and masking the vacuity of the content.” This criticism is not entirely undeserved. It is nevertheless my hope that the book will stimulate theorists to think through the interactions between fertility, technology, and distribution in a serious way. Without this, I don't see how Piketty's predictions can be properly evaluated, or even fully understood.
Rajiv Sethi |Professor of Economics, Barnard College, Columbia University, & External Professor, Santa Fe Institute
(h/t Mark Thoma at Economist's View)
