Capital in the twenty-first century (urspr publ 2018; utgåvan 2017)

Interesting views backed with science Is always an good read.

This is not a light book to read. In some parts I revisited more than once during my first read through. I listened to from beginning to endit 3 times. It is solid research explaining how or economic system works. I great read. ( )

One of the interesting little details that made this book good was how the author put inflation in historical perspective: there was no long term inflation until recent times. And to prove it he shows how novels such as Jane Austen's would often mention "10,000 pounds per annum" as an acceptable income for a man to have before a woman would consider him marriageable. But after 1920 there are no further mentions of this in fiction.

So inflation is one way or consequence of government trying to function without the unpleasantness of raising taxes. Another is borrowing and Picketty delves into that also in an objective way, without digression, that I found riveting rather than dull. So that takes him back to the inevitability of increasing taxes and then Picketty is on to capital flight. ( )

What a remarkable, provocative and confounding book.

It's impossible to boil down this magisterial compilation of statistics and polemics into a few paragraphs for the sake of review. Every chapter had at least one fact — and often many — that could anchor a compelling news story. Piketty drops observations in passing that might warrant entire volumes of their own.

It is, I must confess, not the easiest book to read. Though I found it compelling, it also took me the better part of a year to finish it. Something about its prose, at least in English translation from the original French, made it difficult for me to sustain reading momentum despite being a near-ideal audience for its content. It was quite readable in short chunks — by no means impenetrable prose — but required constant effort to forge through.

I think it unfortunate that much of the book is read in the context of its concluding section, in which Piketty endorses policy solutions to the wealth inequality issues he has been discussing for hundreds of pages. Those solutions — primarily a global wealth tax — may well be workable and necessary (or foolish and unnecessary), but they definitely have provoked strong reactions from people opposed to such a solution for a mix of strong and weak reasons. It's a mistake, I think, to disregard the voluminous array of facts Piketty musters in the front of his book simply because he draws from those facts a particular normative conclusion. (That said, commentators from across the ideological spectrum have criticized some of Piketty's positive facts, particularly as regards the United States in the 19th Century, and those developments should be watched closely.) ( )

Here are the first few paragraphs of my review; the full thing can be found at:

http://www.thepointmag.com/2014/politics/unvulgar-economics

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Adam Smith’s invisible hand has always been the take-away from ECON 101. Smith used the phrase once, when arguing that states should not give a private company the monopoly over a domestic market. It would be wrong for the government, say, to force tea grown in Scotland onto everyone in the United Kingdom. It’s very difficult to grow tea in Scotland, so any tea that could be grown there would be very expensive and, due to geography and climate, disgusting. Tea drinkers would not benefit from the Scottish-Hibernian Institute for Tea having a monopoly over the U.K. market. Only those who own, or own shares in, that Institute would gain. But, Smith suggested, the alternative to private monopoly is a good one: if you let everyone invest their capital wherever they want, they will be guided, despite themselves, to help the domestic economy. The unintended consequences of their actions will benefit everyone. Smith’s hand has stayed with us, and become the centerpiece of our political-economic discourse. Libertarianism is the most intellectually respectable, consistent, and politically powerful twenty-first century version of this discourse.

Libertarianism greatly expands Smith’s argument: he made a case for the invisible hand in the production of economic goods; libertarianism makes the case for it in distribution and consumption, as well. The theory holds that we are all rational actors, and we all know our best interests; if we all act in our best interests, and have access to perfect information, everything will work out for the best. But if governments intervene by, e.g., forcing Scottish tea on us, or subsidizing medical care, the natural processes of rational deciding will be interrupted, and the outcome will be bad. Therefore we can blame all problems on government intervention.

In addition to the economic benefits, this view holds that doing away with government intervention would greatly simplify our moral lives. If the government’s always poking its nose in our business, it’s hard to tell whether successful people deserve their success. But if we are all free to act in our best interests, any given individual’s failure can only be caused by his own failure to act rationally; and if things work out spectacularly well for another individual, that can only be because she acted with perfect rationality. He deserved his failure, and she deserved her success. The inequalities of these outcomes are morally justifiable. This, libertarian discourse suggests, is the essence of true capitalism: markets, left to their own devices, will apportion goods efficiently and effectively; and they will also apportion them justly... ( )

To finish reading the whole of this massive work is itself a great achievement; one only wonders at the effort that must have gone into its creation! The work amasses a wealth of data on incomes and wealth, mainly of the western countries and Japan. It demonstrates that inequalities in wealth, and parallely in incomes, which decreased during the post-world war decades, rose again during the 1980s, and will continue to increase, with deleterious social and political consequences. The author recommends a progressive annual capital tax on wealth to reduce the endless growth in capital of the most wealthy. The average reader will wish that the point had been made more pithily in far fewer pages, with fewer footnotes and graphs, and I do not see myself going to the website to look at the technical appendices. ( )