Piketty on Capital and Inequality
Publisher: Against the Current
Date Written: 01/09/2014
Year Published: 2014
Resource Type: Article
Cx Number: CX20813
A book review of "Capital in the Twenty-First Century" by Thomas Piketty.
The greatest strength of Piketty's book is, without doubt, his empirical data.
Building upon earlier research that he and a team of French economists have been engaged in for over a decade, Piketty's World Top Income Database (WTID) draws on tax records and other government data to provide detailed documentation of the distribution of wealth and income in France, Great Britain, Germany, Italy, Canada, Japan and the United States (with less thorough data for Argentina, Spain, Portugal, Switzerland, China and India) for the past two and one-half centuries.
While Piketty engages in flights of fancy concerning inequality before the late 18th century, his data clearly demonstrate that growing wealth and income inequality is a normal feature of capitalism. Contrary to the claims of Simon Kuznets and other mainstream economists writing during the height of the Cold War, declining inequality was the exception -- the product of the massive destruction of capital during the Great Depression and the two world wars.
Inequalities of income and wealth steadily increased from the late 1700s through the 1930s, declining slightly during the "thirty glorious years" after World War II, and again increasing steadily since the mid-1970s.