Capital in the Twenty-First Century by Thomas Piketty

In my week of films (that's still continuing) apparently there was much talk about French economist Thomas Piketty's new book, Capital in the Twenty-First Century. From the Amazon summary:

"Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality--the tendency of returns on capital to exceed the rate of economic growth--today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again."

David Warsh writes briefly giving the thesis and some background on Piketty, Paris Takes Its Place. Jared Bernstein explains why the book is taking the world by storm, A Good Question Re the Piketty Book.

Krugman: The Piketty Panic. "Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.” Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue."

David Brooks wrote, The Piketty Phenomenon. "His book “Capital in the Twenty-First Century” argues that the real driver of inequality is not primarily differences in human capital. It’s differences in financial capital. Inequality is not driven by young hip professionals who arm their kids with every advantage and get them into competitive colleges; it’s driven by hedge fund oligarchs...Piketty predicts that growth will be low for a century, though there seems to be a lot of innovation around. He predicts that the return on capital will be high, though there could be diminishing returns as the supply increases. He predicts that family fortunes will concentrate, though big ones in the past have tended to dissipate and families like the Gateses give a lot away. Human beings are generally treated in aggregate terms, without much discussion of individual choice."

Krugman retorts: "So, two points. Piketty doesn’t just assert that fortunes will concentrate, he shows that they have in fact concentrated in the past. That’s the whole point of his extended analysis of Belle Epoque France, with its dominance by inherited wealth. And for every Bill Gates, there are many families that do all they can to perpetuate dynastic wealth. Remember, the 10 wealthiest Americans include 4 Waltons and two Kochs."

Krugman has a lengthy review in the New York Review of Books, Why We’re in a New Gilded Age.

Jared Bernstein is reading it and responding to Dude, Where’s Your Piketty Review??!! "–In that sense, it’s more Newtonian than Keynesian. The former changed the way we understood the universe. The latter did too (re the economic universe), but to a lesser extent, and what emerged was less a new understanding of the relationships between growth, inequality, capital, and labor, and more a very different, much more activist, policy approach to the business cycle."

Robert M. Solow give a lengthy review of the book in The New Republic.

Here's an hour and half video of a panel at CUNY with Piketty, Krugman and others.