This is my review of Capital in the Twenty-First Century by Thomas Piketty,Arthur Goldhammer.
The Industrial Revolution saw an increase in inequality resulting from increased capital accumulation by the wealthy. The economist Kuznets misread the evidence in arguing that an "advanced phase" of industry would lead to a more equal spread of wealth, for "the sharp reduction in income equality in rich countries between 1914-1945 was due to the violent economic and political shocks resulting from two world wars…. The resurgence of inequality after the1980s was due to political shifts as regards taxation and regulation of finance". Piketty aims to enhance his academic credentials by analysing and presenting a vast amount of data between 1700-2010 to explain the above more fully and to support his central thesis that there is no natural, spontaneous process to prevent destabilising, inegalitarian forces from prevailing permanently.
At first, the style seems very clear, well-translated, with minimal use of obscure formulae beloved by economists and graphs which relate to actual numbers on the axes rather than indicate trends, although Piketty admits that such complex data over long periods of time comes with many caveats. He tends to reiterate points, which apart from reinforcing learning helps readers who wish to dip into chapter sections. However, such repetition adds significantly to the length of the book.
Length seems a major problem. If I were an economics student, I would not wish to trawl through so much verbiage to glean the useful nuggets of knowledge. As a general reader, although the history of wealth distribution is quite interesting, I am most concerned about the final section on regulating capital, that is, the reduction of destabilising inequalities of wealth in this century. Here, I find the author skirting round the problem in a woolly and diffuse fashion, as in the single 25 page chapter (out of 577 pages, excluding notes) in which he considers aspects of "A Global Tax on Capital" which he introduces, not for the first time, as a utopian idea "which it is hard to imagine the nations of the world agreeing to any time soon". Other chapters in this section each go off at a tangent without being clearly related to the book's central theme of "capital", such as Chapter 14, "Rethinking the Progressive Income Tax" which is confined to examples from the US, France, Germany and Britain .
The author's heart is in the right place but since the arguments for redistribution are controversial, they need to be thought through and presented more strongly. A shorter book would have been more effective: the first part his research, the second his reasoned case. How many of the purchasers who made this a best-seller have actually read it?