Thomas Piketty’s “Capital”: everything you need to know about the surprise bestseller
I have previously done a posting about “Capital In The Twenty-First Century” by the French economist Thomas Piketty which is a stunning critique of the capitalist system. I explained that few lay people will read it because it is more than 700 pages long with footnotes, graphs and mathematical formulae.
So it is good that Paul Mason has produced this short guide to the work.
He explains:
“Piketty’s argument is that, in an economy where the rate of return on capital outstrips the rate of growth, inherited wealth will always grow faster than earned wealth. So the fact that rich kids can swan aimlessly from gap year to internship to a job at father’s bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident: it is the system working normally.”
How important is this analysis?
“Piketty has, more accurately, placed an unexploded bomb within mainstream, classical economics. If the underlying cause of the 2008 bank catastrophe was falling incomes alongside rising financial wealth then, says Piketty, these were no accident: no product of lax regulation or simple greed. The crisis is the product of the system working normally, and we should expect more.”
What is to be done?
“Piketty’s Capital, unlike Marx’s Capital, contains solutions possible on the terrain of capitalism itself: the 15% tax on capital, the 80% tax on high incomes, enforced transparency for all bank transactions, overt use of inflation to redistribute wealth downwards. He calls some of them “utopian” and he is right. It is easier to imagine capitalism collapsing than the elite consenting to them.”