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Monday, April 28th, 2014

Thomas Piketty Is Right: Everything You Need to Know About ‘Capital in the Twenty-First Century’

Author:     ROBERT M. SOLOW
Source:     New Republic
Publication Date:     22-Apr-14
 Link: Thomas Piketty Is Right: Everything You Need to Know About ‘Capital in the Twenty-First Century’
Stephan:   Thomas Piketty and his team have in "Capital in the Twenty-First Century" written the most provocative treatise on economics in years. Here is a very wise and helpful assessment by MIT Economist and Nobel Laureate Robert Solow of this brilliant book. It will give you the gist of the book, as well as great insight as to what it means. Not surprisingly, as you may have already discovered, the Corporatist Theocratic Right is doing everything they can to discredit the book. But there is this problem about facts. To about a third of the country that won't matter but the rest of us need to take what Pietty and his team are saying to heart. We need to vote what they recommend into existence. The clock is ticking.

Capital in the Twenty-First Century by Thomas Piketty, translated by Arthur Goldhammer (Belknap Press)

Income inequality in the United States and elsewhere has been worsening since the 1970s. The most striking aspect has been the widening gap between the rich and the rest. This ominous anti-democratic trend has finally found its way into public consciousness and political rhetoric. A rational and effective policy for dealing with it-if there is to be one-will have to rest on an understanding of the causes of increasing inequality. The discussion so far has turned up a number of causal factors: the erosion of the real minimum wage; the decay of labor unions and collective bargaining; globalization and intensified competition from low-wage workers in poor countries; technological changes and shifts in demand that eliminate mid-level jobs and leave the labor market polarized between the highly educated and skilled at the top and the mass of poorly educated and unskilled at the bottom.

Each of these candidate causes seems to capture a bit of the truth. But even taken together they do not seem to provide a thoroughly satisfactory picture. They have at least two deficiencies. First, they do not speak to the really dramatic issue: the tendency […]

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