Nenhum livro de economia publicado nos últimos anos foi capaz de provocar o furor internacional causado por O capital no século XXI, do francês Thomas. Nenhum livro de economia publicado nos ultimos anos foi capaz de provocar o furor internacional causado por O CAPITAL NO SECULO XXI, do frances. Editions for Capital in the Twenty-First Century: X (Hardcover published in ) O Capital no Século XXI by Thomas Piketty ebook, 1, pages.
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Capital in the Twenty-First Century book. Read reviews from the world's Shelves: antropologia, contemporanea, ebook, economia. Questo bellissimo. Results 1 - 16 of 45 14 Aug | Kindle eBook. by Thomas Il capitale nel XXI secolo (Vintage) ( Italian Edition) O capital no século XXI (Portuguese Edition). O Capital no Século XXI. p. 1 / Embed or link this publication. Description. O Capital no Século XXI. Popular Pages. p. 1. [close]. p. 2. DADOS DE.
This leads to a reinterpretation of the past two centuries of economic history. The most stunning conclusion is that the nature of industrial capitalism will necessarily contribute to further income inequality. The only exception to this rule has been the 30 years after the end of WWII and ending with the oil shock and end of the gold standard.
In France, they call this period the Les Trente Glorieuses, or the 'Thirty Glorious Years', but elsewhere we could call it an 'economic miracle', where high growth rates continued and income inequality was at a record low. It was primarily the result of the long period of turmoil between , which destroyed many of the entrenched fortunes of Europe and left the survivors with an interest in instituting progressive policies in order to prevent social instability.
This 'golden age', says Piketty, is a historical aberration. All positive development in social issues was the result of this dismantling of inequality. After the s, the progressive welfare states were dismantled, and capitalism returned to a similar form it took in the 19th century. Now Piketty does make a distinction between the 'rentier' capitalism of the 19th century which was based on large land ownership and the economic system of today.
Land ownership has become more dispersed among the 'upper-middle' and 'middle' classes, and there is now a 'professional working rich' class, which includes doctors, lawyers, middle managers, and so forth. However, there is still a high concentration of wealth which is still inherited, and the percentage of personal assets which is inherited in Western Europe today is still comparable to that of one hundred years ago.
Lowered estate taxes mean a conversion of entrepreneurial families into a 'rentier' class, which survives on its accumulated income alone.
This is 'patrimonial capitalism'. In this approach, Piketty clashes with the current orthodoxy on income inequality and capitalism. One example is Simon Kuznets' developmental curve, which claims that income inequality will go away on its own once capitalism has achieved a sufficiently high state of development.
Piketty goes after Kuznets' lack of empirical evidence, but also for how explicitly apolitical his theory is. Piketty notes that there are three political factors which go against income inequality - wars which physically destroy stored capital, taxes which redistribute it, and inflation which destroys financial capital. So what happens to developing countries?
For India and Africa, Piketty admits these are out of his topic and it's a bit too early to tell. The Chinese will reach the Western European economy within the next century, having achieved years of development through 75 years of pain.
So speaking of the future, what will happen to the United States and Europe? Will there be a reversal? Piketty differs from the apocalyptic predictions of Marx, and instead firmly says that the future is unpredictable.
But economic theories change with the times, as Piketty notes in his introduction. Those theories which hail the endless growth of markets yesterday seem awfully out of date today. In terms of policy recommendations, Piketty's suggestions are beguiling in their simplicity. In terms of redistribution of capital and re-instituting further recovery, he advocates progressive income taxation, estate taxes, and capital gains taxes.
The problem, of course, is political implementation, as these plans are only barely more popular than the alternatives of wars or massive inflation.
Go straight to F. Hayek's The Road To Serfdom, a book that set the record straight back in You will learn about the roots of socialism and understand that such ideas are not new and will never work, no matter how it gets repackaged. View all 7 comments. May 12, Emily rated it it was amazing Shelves: This is my five stars of "this book changed the way I look at something," not five stars of flawlessness or five stars of thinking everyone in the world should read it.
Since I didn't have an opinion before, it would be more accurate to say this book gave me a way of looking at the structure of wealth in economies over time. First things first, for people who read reviews of the book rather than the book itself. This book is not about slamming the rich; Piketty doesn't talk very much about morali This is my five stars of "this book changed the way I look at something," not five stars of flawlessness or five stars of thinking everyone in the world should read it.
This book is not about slamming the rich; Piketty doesn't talk very much about morality, instead viewing everyone as making rational, yet obviously self-interested, decisions in the environment they see before them. On the flip side, he is not as concerned about the poor as you might think, although he exhibits worry about the hollowing out of the post-war middle class, which benefitted from the capital that drifted away from the very rich, but is now losing their share.
The charge that Piketty is a Marxist is risible. Part of his concern is to alleviate inequality and thus prevent the kind of revolution that a true Marxist would consider necessary. And the principle, by the way, derives from 18th century documents.
He refers to the Declaration of Independence, but being French, what he's really building on is the Declaration of Rights of Man. If you're an adherent of the Club for Growth and reading this book in order to be infuriated, it's going to be a long slog with very little to keep your furnace going from one stats-filled chapter to the next.
On the highest level, the argument of this book is that the structure of wealth that the rich Western countries experienced in the mid 20th century was an anomaly.
Unfortunately a lot of the laws of economics were formulated then and are flawed tools for analyzing the world today. This is hard to explain without writing a review as long as his book.
G was unusually high in the 20th century due to a variety of factors: Growth is likely to slow compared to the midth century and returns on capital are likely to increase as wealthy people and institutions have access to more efficient investment vehicles, so Piketty predicts that capital inequality will grow, such that eventually society looks more like it did in the Belle Epoque.
Despite the faith of post-war economists, "there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently.
Relatively few pages are devoted to his prescriptions for getting back on a more sustainable path, which is why I would recommend this book even if you are dead-set against his ultimate conclusion. An additional flourish on this argument is the difference between rentiers and what Piketty calls "supermanagers," generally corporate leaders who earn huge salaries.
Whereas in the past the most wealthy were rentiers, who owned and inherited things like land or bonds and collected rents or interest on them, the wealth of supermanagers comes through their present labor. Or at least it starts there, but their income is so large that it quickly becomes a traditional fortune, so that these people can be rentiers and supermanagers at once. I found myself wondering as I read these parts whether we in the U.
Generally we Americans feel obliged to make a nod towards work; even Paris Hilton claims to be an actress. Do we really want our own class of Bertie Woosters? Piketty doesn't ask this question, but it quickly came to me as an American reader and seems representative of the kinds of questions of the spirit of fairness and democracy that underpin the whole enquiry.
One of my favorite things in the book is how Piketty uses literature to illustrate his historical points, particularly the writing of Balzac and Austen. Since I don't personally know anyone from the 19th century outside of books, his use of familiar characters really brought those points alive for me. Piketty manages to shed light on economics and history at once.
For example, there's a worthwhile discussion of how it's difficult to talk about quantities of money in the past in a way that is consistent, due to changes in the marketplace; "French downloading power expressed in terms of oranges increased tenfold, and expressed in terms of bananas, twentyfold. Not only that, but the size of the fortune would mean the same thing to a reader fifty years later, due to the lack of inflation at that point in history.
Contrast that with a hilarious ad I once found in the Forbes magazine library while interning there. In a issue, a young man was posed leaning on a sports car with the bold headline: I have few critiques to offer and I don't think nitpicking individual datasets can undercut the concepts the author is trying to introduce. I would say that he is more invested in offering a data set and a way of looking at the history of wealth than he is in actually getting the reader to embrace a global tax on capital.
He doesn't talk very much about the fact that a poor person in an affluent Western country today has far more material comfort than a poor person in the 19th century, which strikes me as both an interesting question and an obvious way to counterargue that present day inequality isn't hurting anyone. He also takes it as a given that the reader views Belle Epoque societal stratification as something we want to avoid in the future, which is true in my case but possibly a little lazy.
At this point, I will admit defeat in my attempt to wrangle the huge variety of facts and arguments into a brief review and leave you with part of the author's conclusion: Marx evidently wrote in great political fervor, which at times led him to issue hasty pronouncements from which it was difficult to escape.
They also play a useful role in coordinating the actions of millions of individuals, and it is not so easy to do without them. The human disasters caused by Soviet-style centralized planning illustrate this quite clearly.
View all 10 comments. Apr 10, Darwin8u rated it really liked it Shelves: But, I'm pretty sure neither the author nor the publisher was expecting it to do sell like it did whether it gets read is another matter.
My guess is this book will stimulate a lot of debate about the real nature and scope of income and capital inequality AND debate about the proper roll of government in addressing these issues. What I loved about this book was Piketty's voice, his narrative style.
The fact he rejected the theoretical speculation favored by a lot of modern economists and instead went with a historical and data-centric narrative, gave this book juice. He wrote an economics book that demands to be read. I loved his boldness. I mean really, it takes some scholarly, economic balls to name your book 'Capital'. It is like walking into a Liverpool pub with a Manchester Untied shirt on.
Piketty was provocative right from the start. Why didn't I rate this higher? I thought his proscriptive approach Part IV was a bit naive.
I get what he is trying to do. He is setting the flag at the ideal point and letting the politics take care of itself, but his ideal isn't really even on this planet not even on Planet France. I'm not sure the governing class in any of the major nations he dealt with will ever be ready for a large-scale capital tax, or a global system of taxing and studying incomes. There just isn't any stomach for that.
It is more likely that a natural disaster, world war, or years of inflation are way more likely to change the current and growing capital inequality in the US and Europe than any preventative, rational, or progressive tax on wealth.
A one-time, double-digit tax on wealth just won't happen in my lifetime. Most will remain ignorant of the problem, apathetic about how that type of income disparity harms democracy, and mostly antagonistic about changing what is perceived to be a meritocracy for a redistributive tax solution.
Just not going to happen. But that is just me venting my frustrations. The future IS the sole property of the future. I might be wrong. For the most part the book is already doing what he wanted.
He's got FT writing and challenging his data. He has Paul Krugman giving supporting data. I'm reading his book instead of a Dan Brown novel.
So, my bitching aside, his book has already done 10x what it had every practical right to do. It might just end up being the next John Rawls tome, read by economists, politicians and those tired of Dan Brown novels. I sure hope so. View all 23 comments. May 29, Mark Skousen rated it did not like it.
The Economist magazine rightly calls French professor Thomas Piketty the new Marx, although a watered-down version. Piketty cites Karl Marx more than any other economist, even more than Keynes. The professor barely mentions Adam Smith. Instead of t The Economist magazine rightly calls French professor Thomas Piketty the new Marx, although a watered-down version.
Piketty conveniently ignores the fact that most high-performing mutual funds eventually stop beating the market and even underperform. The professor seems to have forgotten a major theme of Marx, and later Joseph Schumpeter, that capitalism is a dynamic model of creative destruction. IBM used to dominate the computer business; now Apple does. Now it is Chase. Sears Roebuck used to be the largest retail store.
Now it is Wal-Mart. GM used to be the biggest car manufacturer. Now it is Toyota. And the Rockefellers used to be the wealthiest family.
Now it is the Walton family, who a generation ago were dirt poor.
Piketty is no communist and is certainly not as radical as Marx in his predictions or policy recommendations. Why assess a tax of even 0. It destroys a fundamental sacred right of mankind — financial privacy and the right to be left alone. An income tax is bad enough. But a wealth tax is worse. A wealth tax is Big Brother at his worst. Such a tax would require every citizen to list all his or her assets. The intent is to prevent any secret stash of gold and silver coins, diamonds, artwork or bearer bonds.
Suddenly, the privacy guaranteed to Americans by the Fourth Amendment would be denied and produce an illegal and underground black market. Equally important, a wealth tax is a tax on capital — the key to economic growth.
Virtually everyone rich and poor has one, thanks to the ingenuity of entrepreneurs like Steve Jobs. This is democratic capitalism at its best. Income inequality may be growing, but when it comes to goods and services, inequality may be shrinking. To create new products and services and raise economic performance, a nation need capital, lots of it. The only time capital declines is during war and depression, when capital is destroyed. Piketty blames the increase in inequality on low growth rates.
He says return on capital tends to be higher than the economic growth rate. Even Keynes understood the value of capital investment and the need to keep it growing. Make the cake bigger, and there will be plenty to go around for everyone. This is why increasing corporate profits is good — it means more money to pay workers. Studies show that companies with higher profit margins tend to pay their workers more. If anything, we should reduce taxes on capital gains, interest and dividends, and encourage people to save more and thus increase the pool of available capital and entrepreneurial activity.
A progressive tax on high-income earners is a tax on capital. An inheritance tax is a tax on capital. A tax on interest, dividends and capital gains is a tax on capital. By over-taxing capital, estates and the income of our wealthiest people, including heirs to fortunes, we are selling our country and our nation short. You can never have too much capital. What country has advanced the most since World War II?
Hong Kong, which has no tax on interest, dividends or capital. Perhaps he will quote this passage: Mar 16, Marvin rated it it was amazing.
Spoiler alert Piketty explains why a tax on capital is so much preferable than taxes on income, the need for global cooperation and why inequality in America will only get worse unless policymakers address higher education affordability, tax policies, especially on inheritance, and minimum wage laws. A brutally long read, yet well worth the effort. View 2 comments. View all 5 comments. Jun 06, David M rated it it was amazing Shelves: Fresh confirmation. Piketty likely under estimated the growth of extreme inequality https: Economists are all too often preoccupied with petty mathematical problems of interest only to themselves.
This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex problems of the world we live in.
There is one great advantage to being an academic economist in France: Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.
Neo-classical economics is morally and intellectually repulsive pseudo-science. Economists are not actually experts in anything.
Every thinking person in the 21st century needs to read this book. As I read him, Thomas Piketty's major disadvantage is political. He delineates a radical problem, then offers a liberal solution. A global tax on wealth does indeed make sense - indeed it makes so much sense he can't possibly account for the fact that it doesn't exist already.
He refuses to consider such things as class struggle and ideology. However, Piketty also acknowledges that in the 20th century wealth inequalities were wiped out only due to world war; from this perspective, it would seem Marx actually wasn't nearly apocalyptic enough in his predictions.
The violence of the first and second world war far exceeded anything a Victorian intellectual could have conceived. If war is ultimately what destroyed inequality, can it also be said that inequality contributed to or even caused world war? The implications here are clearly very radical. It's a question Piketty leaves unexplored. He hints that inequality can have disastrous social consequences, but then treats the major man-made conflicts of last century as if they were random accidents.
Feb 19, Randal Samstag rated it really liked it Shelves: A chart of their data is a frequently-used graphic the one that looks like the Golden Gate Bridge in Robert Reich's current documentary film, Inequality for All. This figure shows the income of the top 1 percent of income earners as a ratio of the national income from the period from to It shows a dramatic peak just prior to the crash followed by a collapse in the years up to and then a dramatic rise back up to the same level of approximately 24 percent of national income that the one percent took home in the roaring twenties.
It contains over pages including notes of remarkable data and graphics depicting the historic evolution of income and wealth in our world. It has been making quite a splash in the United States, it's English translation coming as it has on the heels of Inequality for All.
Scores of other reviews have come out since it's publication by Harvard Press in March from both right and left. Michael Roberts has been regularly working at debunking Piketty in the pages of his blog from a Marxist perspective. Someone who has raised such praise and ire from both left Roberts , middle Krugman and Solow , and right Feldstein must be on to something. Piketty's book provides comprehensive documentation of the growing inequality that has the United States and Europe in its grip.
But the forgotten element in this that Piketty brings to the discussion if you have not read Ricardo and Marx is that extreme inequality, in Europe at least, is not new. The inequality that has now established itself in both Europe and the United States is more like a return to the normal state of extreme concentration of wealth and income that ruled in the nineteenth century.
It was only the great capital destruction of the inter-war years and the threat posed by the success of socialist revolution in Russia - not so much emphasized by Piketty that reduced inequality in the West in the twentieth century. Piketty calls this new reality "patrimonial capitalism" in that as economic growth chronically lags behind the rate of return that owners of capital can receive on their wealth, a tiny rentier class eventually emerges over generations that controls significant portions societal wealth and influence.
This picture contradicts the story told by free market economists from Hayek to Kuznets to Milton Friedman and Paul Ryan that unregulated markets open doors to everyone to gain wealth. Instead, Piketty shows, the supposed triumph of capitalism in the wake of the fall of the Soviet empire, is more likely trending towards an entrenched structure of societal control by inherited wealth.
Piketty's title seems to be modeled after that of the famous book by Karl Marx, but Piketty is no revolutionary, rather a socialist of the contemporary French type which much more resembles the Democratic Party of FDR than any nineteenth century socialist party.
Not that he thinks that this enormous inequality is a good thing, far from it, but his solution is rather a modest tax on capital than overthrow of the capitalist system. Key concepts in the book: View all 15 comments. Mar 25, Aaron Thibeault rated it it was amazing. The main argument: The unequal distribution of wealth in the developed world has become a significant issue in recent years. Indeed, the data indicate that in the past 30 years the incomes of the wealthiest have surged into the stratosphere and the higher up in the income hierarchy one is, the greater the increase has been , while the incomes of the large majority have stagnated.
This has led to a level of inequality in wealth in the developed world not seen since the eve of the Great Depression. This much is without dispute. Where there is dispute is in trying to explain just why the rise in inequality has taken place and whether, and to what degree, it will continue in the future ; and, even more importantly, whether it is justified.
These questions are not merely academic, for the way in which we answer them informs public debate as well as policy measures—and also influences more violent reactions.
Indeed, we need look no further than the recent Occupy Movement to see that the issue of increasing inequality is not only pressing, but potentially incendiary.
Given the import and the polarizing nature of the issue of inequality, it is all the more crucial that we begin by way of shedding as much light on the situation as possible. Specifically, the author traces how inequality has evolved from the agrarian societies of the 18th and early 19th centuries; through the Industrial Revolution and up to the First World War; throughout the interwar years; and into the second half of the twentieth century and up to the first part of the twenty-first.
With this broad historical context we are able to see much more clearly the causes of inequality. As we might expect, what we find is that inequality is influenced by a host of societal factors—including economic, political, social and cultural factors.
However, what we also find is that inequality is influenced by a broader set of factors associated with how capital works in capitalist societies and market economies more generally.
Specifically, we find that capital and the wealth it generates tends to accumulate faster than the rate of economic growth in capitalist societies. What this means is that capital tends to become an increasingly prevalent and influential factor in these societies at least up to a point.
For these reasons, capitalism on its own tends to produce a relatively high degree of inequality. The natural tendency of capital to accumulate and to become ever more concentrated largely explains the high degree of inequality that was witnessed in the developed world in the early part of the twentieth century.
This inequality was largely dashed, however, in the interwar years. The end result was that by the time World War II was over, inequality in the developed world had reached an all-time low. After the Second World War, the natural tendency of capital to accumulate resumed. However, various political and economic measures including progressive taxation, rent control, increasing minimum wages, and expanded social programs worked to redistribute this growing capital, thus preventing inequality from growing as quickly as it would have otherwise.
In the s, though, the developed countries did an about-face, and began eliminating many of the measures that had prevented inequality from rising according to its natural tendency. The consequence was that inequality reasserted itself in a major way, such that it is nearly as extreme today as it was on the run up to the Great Depression.
Furthermore, the historical evidence indicates that capital will likely continue to accumulate and become ever more concentrated, such that we will witness an even greater level of inequality moving forward. As far as justifying the growing inequality that we are currently seeing, Piketty raises serious doubts as to whether it may rightly be considered fair.
For Piketty, the best and fairest solution to these problems would be to steepen the progressive taxation applied to the wealthiest individuals. The problem, though, is that in a world of financial globalization where there is a high degree of competition for capital—as witnessed by tax havens , it is extremely difficult to apply the appropriate tax scheme without the cooperation and coordinated efforts of the international community—and this is simply not something that is easy to achieve.
This book is an absolute tour-de-force. The broad time-frame that Piketty explores, and the enormous body of data that he brings together, makes this study extremely comprehensive no one will even think of accusing Piketty of cherry picking the data.
Also, the reader is struck by how dispassionately Piketty analyzes the evidence he brings to the table. Indeed, while the author does have a position on inequality, one never receives the impression that this is corrupting his analysis I consider myself to be a pragmatist politically, and often find that writers on both the left and the right massage the truth, but that was never the case here. Finally, it should be said that the book is very long, and just as dense, with the author often delving into extreme detail, so be prepared for a challenge.
A must read for anyone with a serious interest in economics. A full executive summary of the book is available here: View all 3 comments. I fautori di Ludwig von Mises, Frederich von Hayek e i Chicago Boys cercheranno di smontarne le tesi dicendo che il moderno capitalismo senza regola premia gli imprenditori capaci e fa fare bancarotta a quelli meno bravi citando, en passant , l'esempio dei Vanderbilt e come un neoliberismo senza regole e controlli crei benefici a pioggia per tutti.
Bla bla bla. Il Capitalismo senza regole aka neoliberismo, che Piketty mette sotto esame e in discussione, ha raggiunto in pieno gli scopi che si prefiggeva. Il cittadino mediamente informato queste cose le vede, le medita, il suo stomaco ne risente. Infatti, infatti Quasi un intervento di angioplastica, fatto per evitare che il sistema paese collassasse. Poi occorre trovare politici altrettanto coraggiosi onesti?
Io in giro non ne vedo molti, dopo l'Obama ormai dump Duck. Comunque, in caso di bisogno View all 4 comments. Apr 25, Joe rated it really liked it Shelves: I will steal my short version review of this book from the fictional review of a "Cones of Dunshire" Parks and Recreation review: Punishingly intricate. What makes this book so effective is what makes it such a difficult read: Piketty shows his work by going through all of the statistical, economic, sociological, etc etc etc, data he could get his hands on.
He correctly anticipated the criticism he would receive from the right wing and thusly he makes no claims without laying EXTENSIVE fo I will steal my short version review of this book from the fictional review of a "Cones of Dunshire" Parks and Recreation review: That makes the book a bit of a Catch For those that like his conclusions, the massive amount of foundation laid out getting there is unnecessary.
Many of the recommendations he has in his introduction and conclusion are remedies that the left has been recommending for years. However, for those that don't like these conclusions, no amount of foundation would be enough. I dare say many of the negative reviews on this sight clearly didn't read the book and seemed to read only the introduction and conclusion.
Here is my impression of those reviews: It's long and you'll be angry the whole time, but it's the only intellectually honest way to make your argument. This one was a slog at times but in this age of misinformation, I appreciate an author treating me like an adult and for once saying, here's how I got my answer, here are all of my assumptions and why.
It seems like a small thing, but as this page monster can attest to Aug 04, Kunal Sen rated it it was amazing. The first requirement of honest scholarship is to be suspicious of all past ideas and question every single data source. Piketty does just that. He shows respect towards past economists while critically questioning each of their conclusions. He takes advantage of the longer time perspective that he has, and lays out a compelling array of powerful data. His conclusions that are logically sound and extremely sobering in their scope.
When it comes to capital accumulation, wealth disparity, and economic policies, we are as polarized as we could be. Within that environment Piketty has been able to take a few very simple ideas and build a convincing string of factual evidence and impeccable logic to build his argument. He does not have the audacity to believe that economics is a hard science that can dive into complex mathematics and pull out pearls of pure wisdom.
He does not believe that economics can really stand apart from all other social sciences and history. The result is a narrative that is convincing, both intellectually and emotionally. I am no economist, and I do not have the training to say anything definitive about his conclusions. I must admit that when I read articles written by his smart critics, criticizing the book, I find their arguments also powerful and almost convincing.
Real arguments should only happen between experts, those who spent a lot of time mastering the complexities of the subject, so that the rest of us can listen to both sides and make up our mind. Unfortunately, it has also disturbed the left. The important thing is that the book reignited a debate that was long overdue. View 1 comment. Dec 29, Atila Iamarino rated it really liked it Shelves: May 18, Nick Klagge rated it really liked it Shelves: I finished this several weeks ago now, but with all of the reviews in the media, I keep putting off writing my own because I feel like it needs to be really good!
I am going to avoid doing a comprehensive review, since you can read many of those on the internet. Instead, here are some of my idiosyncratic observations on the book: Yes, it is long, but Piketty's writing jointly, Goldhammer's translation is ext I finished this several weeks ago now, but with all of the reviews in the media, I keep putting off writing my own because I feel like it needs to be really good!
Yes, it is long, but Piketty's writing jointly, Goldhammer's translation is extremely clear and very much appropriate for the non-specialist. There are only a few equations in the whole thing, and all of them are quite straightforward 3 terms at most, all in some kind of standard algebraic relationship. If you are interested but have been feeling daunted, don't! Nearly every graph in the book shows a fairly steady state over the course of the nineteenth century, a huge downward shock in the twentieth century due to the Great Depression and the World Wars , followed by a near-complete recovery to the steady state.
It is largely thanks to Piketty's work that we can observe the 20th century in this historical context. The most significant "interrupted pattern" of the 20th century was the dominance of inherited capital over labor income. Before the twentieth century, there was so much accumulated capital in Europe that a striver would have no chance of reaching the upper echelons of economic resources just by getting an education and working hard as Piketty illustrates by examples given in Balzac.
In the twentieth century, there was such wholesale destruction of capital by the depression and the world wars that this ceased to be true, and a decent job and hard work could land you near the top.
As capital has recovered over the second half of the 20th century, however, this is decreasingly the case. At any rate, Piketty's interesting global observation is that much of modern economic theory and empirical work has been based on observation of time series collected during an anomalous historical period, and thus it may have limited "external validity.
What is the "average number of wars per century"? Briefly, M's hypothesis is that saving behavior is generally motivated by intent to spend down savings during retirement, so that the lifetime pattern of wealth would look like a triangle--rising from zero during a working career, peaking at retirement, then falling back to zero at death. As a side note, Nick Rowe has perceptively argued that the phenomenon of "retirement" itself presents a puzzle for economic theory: What Piketty shows is that the lifetime pattern of wealth does not resemble this kind of triangle; rather, wealth tends to increase monotonically over the life cycle.
This type of behavior can be consistent with bequest motives, but Piketty says it also holds for those with no identifiable heirs. In line with what I was discussing above, Piketty points out that M's hypothesis was likely consistent with the data in the immediate postwar period when M was writing, with very little role for inherited capital, but not in general. I think this is an important point, because for most upper-middle class people, M's hypothesis is consistent with their intuitive understanding of capital, because it is consistent with their own lived experience of wealth accumulation.
As a small-time investor, believer in index funds, hedge-fund skeptic, etc. Do the rich really have access to "better opportunities" than the rest of us? David Swensen, the investment manager for Yale's endowment, believes that the answer is affirmative--he set out to write a book about how individuals could use Yale's investing strategies, but concluded that they cannot.
Unfortunately, it is one of the areas where Piketty avowedly has the least data to bring to bear. The main data source he looks at for this question are the annual returns on university endowments.
He sorts endowments by size and documents the pattern of returns by size category. In general, Piketty's answer to the question is affirmative, with larger endowments showing better returns. I was able to look at the underlying Excel files he has posted to his website thanks! Smaller endowments need to be somewhat more defensive, so they have higher percentages of lower-returning fixed-income assets.
However, the main anomaly I observed, and don't have a good explanation for, is that endowments by and large seemed to avoid significant losses in the tech bubble burst though they later had significant losses in the subprime crisis. With some casual Googling, I have not been able to find documentation of why and how university endowments were able to avoid that particular collapse--sectoral position limits maybe?
Many reviewers have presented critiques of Piketty's arguments, and I think at least some of them have some validity.
However, I don't think that any of them invalidate the broad arguments he puts forth. Which is all very sobering, especially since his policy prescription of a global wealth tax is again, avowedly quite unrealistic politically.
Jan 28, Drtaxsacto rated it it was ok. Ideally a book called Capital in the 21st Century might address two sets of questions which are very current. They both argue that those developments are a problem. The second question is even tougher. In all developed societie Ideally a book called Capital in the 21st Century might address two sets of questions which are very current. In all developed societies the last couple of decades depending on how you count and when you begin have witnessed a gradual increase in inequality in both incomes and wealth.
Those trends have happened almost in spite of which policies a country chooses to adopt Inequality has grown in the last seven years in the US, even though the Administration is committed to reducing it. Another possible set of questions might address some issues about capital formation when much of what we are creating is tiny - in health and technology.
Does our understanding of what constitutes capital and how to develop it change when things are digitized and done on the nano level? I think we probably need to do some thinking about that. But again Piketty fails to consider these questions and instead concentrates on the increasing inequality of income and wealth. Like many other Malthusians he uses linear logic elegantly. A lot of what he offers as logical chains is, at best, tautological.
Let me offer ten questions about the book. Both are distinguished as being the most quoted and least read books in the field. While I think most of Kapital is bunk, it has had a significant influence on the field. These kinds of books enter into discussions but often with distortions from the original that are significant. I wanted to wait until the noise lessened.
In it, he described two ways to begin the study of Economics. The first is to imagine supply and demand curves. If the is X supply of a good then at some level of demand the suppliers and consumers will produce an optimal quantity to satisfy both.
That simple model can be expanded to all sorts of complexity. But there is an alternative way to begin the study. Assume that you produce apples and I produce oranges. And that I am the better farmer for either crop. If I concentrate on the product I produce best oranges , we will both be better off. Most of life is better seen in a cooperative light rather than a zero-sum game. Piketty is a logical successor to Thomas Malthus - whose Treatise had such an influence on much of economic thinking but began with flawed data and linear assumptions.
But his careful logic was linear and failed to project for things like the steel plow. All of a sudden a few years after his book came out the plow began to produce almost geometric increases in the food supply because it tilled the soil more effectively. And if that does not happen woe is me! It is hard not to laugh out loud about these kinds of projections. I suspect he thinks the projections reinforce his policy proposals.
Piketty should be given some points for effort. This is a complex book with a lot of theory;it is nothing, if not comprehensive in its view. But it relies on a series of very shaky assumptions. He fits into the character of Uriah quite neatly. Even more annoying is his tendency to make historical comparisons which are based on the novels of Balzac, Austin, and Henry James - as if their writing involved a careful analysis of the structure of the economy at the time.
He credits Simon Kuznets for his excellent work on the development of national income data. He should. A good example of the phenomenon started at the beginning of the industrial age after the Civil War in the US. Large fortunes came to those who developed new technologies - the early payoffs were huge. But as the cycle progressed, income disparities began to be reduced. Some economists argue that the apparent increased concentration of wealth in many societies during the current period is partially as a result of that same kinds of trends.
Early winners in technology got huge compensation. But the current inequality is not just from technology payoffs to entrepreneurs. This period is also influenced by larger compensation to stars movies, music, sports. We also began to pay lawyers and doctors and bankers more than we did in earlier times.
But the question is whether all of these higher wages will be sustained or diffused as the cycle continues. Because it has happened over the last several years or even decades does not mean it will continue forever. The salaries of young law associates and investment bankers have begun to plateau - if that continues those professions will attract fewer of the best and brightest. Piketty sees the world as an economist who ultimately believes we live in a zero sum world.
There is plenty of evidence that assumption is false. The author certainly sees the world in terms of good and evil. The mix of the super-compensated has changed over time, and will change more. In California many of the very rich have two characteristics. First, they are relatively young and second they or their kids may or may not be in the top brackets in the future. The payoffs to technological innovators have been huge.
As the Kuznets curve suggests - over time those initial payoffs disburse into the broader society. Piketty makes some speculations about what might happen as the people who were highly compensated age; but none of his scenarios are convincing unless you believe there is no economic turbulence.
There is also the discussion of the Modigliani Triangle - which was used to torture Economics students and postulates a life cycle theory of investing - in essence we accumulate dough when we are young when we can so we can live through retirement. I am not a fan of how Piketty explains this elegant piece of theory but the book does present some very interesting data on how estates developed and were distributed over time.
He argues that it is impossible to be sure what percentage of large fortunes came from effort, theft or simply good luck being born with the right parents. Sure that is true, but so what? Was the payoff to Bill Gates for his efforts on developing an operating system and other technology innovations justified? From my view, moving those kinds of decisions into the political realm would be a disaster.
Piketty argues that it is appropriate to force individuals to disclose the amount of their wealth as somehow being more democratic? I will come back to that issue in the final question, For now, just why is it a good idea to force public disclosure of income and wealth? Many of his arguments - about the long term structure of capital, about the relative distribution of wealth in a country or across borders are based on two very faulty assumptions.
First, as he admits, his data is uncertain. But second, they are based on linear assumptions. That did not happen because of the dynamic effects of innovation. Configural logic is a lot harder to work with - but as we found in the Japanese example - it is often better in hindsight. When the Japanese economy began to implode and the Nikkei, which had been at 36,, began to fall - we were able to download back all of those assets they bought for pennies on the dollar.
He could have benefitted from reading Schumpeter on creative destruction. He also seems to not understand the differences between rates and share in tax systems. Even though tax rates were considerably higher in the nineteen fifties, the percentage of GDP paid to taxes has remained about the same and the distribution of burdens has changed toward more progressivity. There is plenty of evidence from the Tax Reform Act that, at least in the US, as rates were reduced and the base broadened, the highest income taxpayers paid an increasing share of the total tax bill.
So what is a better way to do a tax system - with confiscatory rates and lots of complexity or with low rates and little complexity. He seems to think that higher rates do not induce complexity - the evidence, at least from the US, is to the contrary. A fundamental concept in tax theory is called the substitution effect. If you tax something, at some point, people will substitute something else for the taxed thing. Pepper - one would expect more people to download Dr.
Piketty in all of his argument for a progressive tax on capital never seems to think that the highest income taxpayers would begin substituting capital preferences. Again, the evidence in the US example is against him.
Complexity, which is mostly an unseen cost in the tax system - decreased through and then began to increase where we now have moderate rates and labyrinthian rules. The evidence from the Economic Recovery Tax Act and the Tax Reform Act is that the simplification of of capital structures and the lowering of capital rates offered some huge incentives to the fuel technological boom we experienced over the last couple of decades which Gordon and Cowan now say is now nearing its end.
Piketty explains the implications of relying on the GINI coefficient as an indicator of how well we are doing in promoting an equitable society. I agree with him here - GINI is a crude measure. But I think his definition of equity and mine are quite different. I do not know what the right distribution of wealth or income should be, except in very general terms.
He spends some time on the diffusion of spending in the world. More people from poorer or formerly poorer nations are able to get all sorts of new consumer goods. Most zero sum analysis is just plain silly. We should applaud increases in consumption in places which had little. And we should not be worried if our share of the total diminishes - so long as the pie gets bigger.
He says the pie cannot expand forever and that is true. But we do not know the limits of pie expansion. Piketty makes a series of proposals to reduce inequalities which he never ultimately defines. Many of his ideas may a not solve the problem in the direction he supports and which most of the American people would oppose and b may also create externalities in other areas.
A clear example, which PIketty would probably not support based on a gratuitous comment he makes later in the book on public pensions is what effects a program like social security has on wealth. A number of countries, including Chile, have privatized their retirement systems.
Workers in Chile are required to pay into a retirement account with a limited number of options but the government role in the system is to set the rules. What would the effect on capital be if other countries did the same? In the US we are forced to contribute to a system which does not accumulate wealth although it does have a modest positive effect on incomes of retired persons which might be even larger if we were to adopt a Chilean system.
So what would be the effect on Capital in the 21st Century if we were to begin to change from the US system to the Chilean one? A quarter of the book is dedicated to proposing things to solve the scourges he sees in the first three sections. At the outset of the last section, Piketty shows his cards. And he argues that collective action is not possible without taxation. That is simply not true. Piketty conflates two issues which should always be separated.
First, how much of a good do we want to provide for society? And second, what is the most efficient way to provide it? There is a good body of literature on the inefficiencies of governmental provision. Piketty seems to have missed that. Government does not always have to be the provider.
One could use his discussion of pensions to prove the point. Yet he does not seem to concede that the demographics in most developed countries are against sound funding for these programs. The pay-go system in almost all instances is lurching toward insolvency. His tax discussion, ultimately pushing for a worldwide progressive tax on capital, which even he admits is utopian is a mishmash of jargon and speculation. For example, he argues that the growth in executive salaries in the US began to grow with the Reagan tax cuts of and He never seems to make a distinction between contingent and salary payments.
A good part of the compensation of what he calls super managers is contingent. The fault in at least some of those systems may be the point of analysis not the incentives. But he never gets to those questions. Jul 11, The American Conservative added it. That is the novel strength of Capital in the Twenty-First Century.
Although his book is theoretically thin and concludes with a political program that is simultaneously overfamiliar and quite unlikely to be enacted, Piketty has done an enormous service simply by compiling the amount of data that he has about how the predominance of wealth ha "We are now in the realm of speculation, however, and that is a world in which Piketty, notwithstanding his headline-grabbing predictions, is uncomfortable.
Although his book is theoretically thin and concludes with a political program that is simultaneously overfamiliar and quite unlikely to be enacted, Piketty has done an enormous service simply by compiling the amount of data that he has about how the predominance of wealth has varied over time in different countries and by laying down a marker for how economists should properly investigate the world.
Thomas Piketty is to be commended for putting the question of distribution at the center of discussion about our economic future, rather than, as is more common in the dominant neoliberal framework, treating it as important only inasmuch as it bears on questions of mobility and growth.
He is to be commended as well for demanding a humbler empiricism from the community of economists. But if we are to proceed from analysis to action, we still need a more robust theory of what is actually causing the problem that we observe. And while there is a certain French elegance to single, universal solutions, it may be that a diversity of attacks, tailored to the economic situations of different countries and regions, is not only more plausible than a new, global tax regime but more optimal as well.
Oct 26, Veronica rated it really liked it Shelves: Inherited wealth dominates amassed wealth, the shore of capital income in national income is equal to the average rate of return on capital, there exists unequal returns as a function of portfolio size, social spending can amplify inequalities of social origin, in low growth societies the rate of return on capital is 'markedly and durably higher than the rate of growth', an apparently small gap between return on capital and rate of growth can in the long run have powerful and destabilizin Notes: Nov 12, Owlseyes on notre dame, it's so strange a hour blaze and He was the ingeniuous inventor of any number of beauty products-Sultan's cream,Carminative Water, and so on-that Balzac tells us were all the rage in late imperial and Restoration France.
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