Thomas Piketty: Capital in the 21st Century

I got the chance to read this book over the last few days – it is definitely a “must read” and a major achievement.  The Free Exchange blog is running a “book club” for this book – the various entries are here.



52 thoughts on “Thomas Piketty: Capital in the 21st Century”

  1. The guy’s name is “Thomas.”

    Here’s hoping nobody calls me an untermensch beholden to slave morality for pointing this out

  2. Paul Krugman has a preview here of a forthcoming review in the New York Review of Books:

    Working for the Owners:

    Credit is also due to Emmanuel Saez, another French economist, who is based at the University of California Berkeley, who with Piketty developed historical databases for several countries.

    They were publishing data long before income inequality became a cause célèbre.

  3. I got as far as here; (the Economist piece mentioned in the header) –

    “The study of political economy emerged in the first decades of the Industrial Revolution, in the late 18th century, in Britain and France. The great thinkers of the era were attempting to understand the dramatic societal and economic changes of the day and to describe their mechanics in a way that would allow them to anticipate future developments.”

    I think this is tad disingenous to some quite distinguished Oriental scholars who published much earlier. But then, we Occidentals seem fixated on ourselves :-

    “The reason is simple. It is the common desire for sensationalism, the ease with which one … … may disregard reviewers and critics. This leads to a failure to exercise self-criticism about one’s errors and intentions, to demand of oneself moderation and fairness in reporting, to reapply oneself to study and research” [translated from the original]

    Now I wonder who wrote that? And more crucially, when?

    Inequality goes back a very, very long time. But in those days there were no printed books, no radio, no television, no phones. The common person had virtually zilcho – relatively speaking. Looks like the western, industrialized, educated, democratic societies have begun the process of ‘reverting’ to their original forms.

  4. @ JG

    An extract from the Cassidy review which prompts me to buy the book.

    “Politics and income distribution are two sides of the same coin.

    Piketty takes some well-aimed shots at economists who seek to obfuscate this reality. “In studying the eighteenth and nineteenth centuries it is possible to think that the evolution of prices and wages, or incomes and wealth, obeys an autonomous economic logic having little or nothing to do with the logic of politics or culture,” he writes. “When one studies the twentieth century, however, such an illusion falls apart immediately. A quick glance at the curves describing income and wealth inequality or the capital/income ratio is enough to show that politics is ubiquitous and that economic and political changes are inextricably intertwined and must be studied together.”

    That’s more than mere rhetoric. By insisting that economic laws always take shape through social norms, values, and political choices, Piketty would rescue his discipline from the aridity of abstraction and return it to the richer model of political economy that its best nineteenth-century practitioners pursued. Certainly, it’s hard not to be impressed by his history and his methodological assault on theorists who believe that economics can be reduced to a pure science. But is his futurology too pessimistic? The Kuznets curve, mapping inequality over time, is a bell curve: inequality peaks and then declines. Piketty would replace it with a U curve. Are we really condemned to return to the social structure of “Mansfield Park” and “Le Père Goriot”?

    A more upbeat possibility is that the rate of G.D.P. growth will approach, or even exceed, the rate of return on capital. If it does, the coming decades could look more like the middle of the twentieth century than like the nineteenth century. To be sure, the past half decade, with many advanced countries mired in slumps, doesn’t augur well for an extended period of higher growth. But recessions are cyclical. Over the long term, innovation and increasing productivity are what drive growth. With the rise of the Internet, biotechnology, robots, and other scientific advances, it is at least conceivable that productivity growth will shift to a permanently higher rate, and that G.D.P. will rise with it.”

    Cassidy goes on to give other reasons why Piketty may be wrong as to future developments and rightly describes his solution – a global wealth tax – as Utopian (a view which Piketty himself seemingly concedes but arguing that setting it as a logical objective may, in itself, be beneficial).

    However, if the book did nothing else other than extract the discussion of economics from its imagined aseptic apolitical corset, it would have achieved an enormous amount.

  5. @DOCM he did finish with this,given the interest level hope he does something in NY,just catching up on downtown abbey which is very popular here.The kindly earl has quite the following.

    Interesting he’s speaking at harvard the incubator off the 1%,but they are his publisher so…

    “In the United States, the very idea of a new wealth tax looks like a nonstarter politically, as would the notion of raising the top rate of income tax to eighty per cent. That’s not a knock on Piketty, though. The proper role of public intellectuals is to question accepted dogmas, conceive of new methods of analysis, and expand the terms of public debate. “Capital in the Twenty-first Century” does all these things. As with any such grand prognostication, some of it may not withstand the test of time. But Piketty has written a book that nobody interested in a defining issue of our era can afford to ignore.”

    the cassidy piece references a review from Milanovic which you can find here.

    “Piketty’s key message is both simple and, once understood, almost self-evident. Under capitalism, if the rate of return on private wealth (defined to include physical and financial capital, land, and housing) exceeds the rate of growth of the economy, the share of capital income in the net product will increase. If most of that increase in capital income is reinvested, the capital-to-income ratio will rise. This will further increase the share of capital income in the net output. The percentage of people who do not need to work in order to earn their living (the rentiers) will go up. The distribution of personal income will become even more unequal.”

    the NYT bus. section on sunday had a rather negative front page article on france called Au Revoir, Entrepreneurs.Quite critical off the taxes and BS which may be resulting in a brain drain to London.

  6. @ DOCM: “A more upbeat possibility is that the rate of G.D.P. growth will approach, or even exceed, the rate of return on capital.”

    That would be nice, but it is no longer possible. GDP is essentially an immeasurable quantity – despite all the good work of countless economists. What they get – but they would be embarrassed to say so, is something along the lines of, – “Well its a little bit of this, and a little bit of that, and a little bit of t’other.”

    The ‘rate of growth’ of any industrialized economy is entirely dependent on its access to relatively inexpensive sources of fossil fuels (especially oil) – coupled with their respective technological and commercial sophistications. It is these latter which can ‘lever up’ the return on capital investments through the capture of the massive amounts of surplus energy in the aforementioned fuels. But these fuels ‘cost’. And when the costs of the fuels increases – as it has done, then capital return is supressed at the margin: as of now.

    This marginal supression of capital return cannot be undone – except temporarily. The rate-supressing metric is not technological, but the availability of that inexpensive fuel. We have a nasty surprise awaiting us in that regard.

    And your final para: Nicely put!

  7. BWS – I would have thought the study of political economy as it applies to industrialised capitalist economies came of age post industrial revolution, in industrialised economies.
    What pre industrial revolution Oriental thinkers are you thinking of specifically here, who wrote about the political economy of industrial capitalism, in a time and place before it occurred ?

  8. @ JG

    One wonders if the message is not a bit too simple?

    On “patrimonial capitalism”, I have always been struck by the ability of the French to have a high-sounding description for even the simplest actions, a favourite in this context being “construire un patrimoine”. I googled the phrase in an idle moment and came up with this recent commentary in Le Figaro.

    This is what we Irish tried and it did not work out too well. (The possibility that this might happen is recognised at the end of the article where it is pointed out that the strategy only works as long as property gives a return through rent and prices rise). In short, a lot of the value of a major element of “capital” in the modern developed economy may be ephemeral (as the Great Recession has demonstrated). This has not yet happened in France.

    Hardly an inch of the coast has been left untouched with monotonous low-quality developments, divided into miniscule properties from a “studette” i.e. even smaller than a standard studio (aka one room) upwards, the entire being financed by the propensity of the French to all be on their holidays at the same time, and for over 50 million tourists to fill gap when they are not which assures, the necessary rental income and steadily rising prices for the small scale investors involved.

    There is also the “bread and circuses” element e.g. 400,000 buying tickets to no less than five Garth Brooks concerts. Or hard-pressed punters paying exorbitant prices for football tickets in order to pay players phenomenal salaries and keep Russian oligarchs amused.

    In other words, simple observation suggest that what drives, or rather maintains, inequality, to a certain extent at least, is short-term thinking, or not thinking at all, combined with having a sufficient surplus of income to do so. How to work this into the overall equation is a bit of a problem.

  9. jg – what the hell does Sun Tzu have to do with the political economy of capitalist economies ? im obviously not doubting there are numerous ‘oriental thinkers’ historically, Im wondering why in the name of bayjaysus BWS thinks that economist clipping is inaacurate

  10. @rf it frequently ranks as one the best most influential business/strategy books up there,believe it or not with The Godfather.
    Anyway was referring to the “war” capitalism is waging and giving Brian a hand.
    “For the victor, “the best policy is to capture the state intact; it should be destroyed only if no other options are available”.[3]

  11. @ rf: Thank you for contributing. I sense you may be a tad ‘frustrated’ by my enigmatic comment. I apologise for that, not intended – though I have no intention of revealing the source. It took me a long time and some fancy-footwork thinking to unearth. Lets just say, I believe us Occidentals have a Navel Fetish when it comes to philosophical, intellectual, sociological, economic and political things. If I’m pushed, I shall explain further, with the relevant reference.

    Back in the Ice Age, we had Mastadons. Fearsome predators. Today, we have Tigers. Elegant ambush-predators. Only the contexts have changed. So also with human societies. Look for the similarities, now and then. But our contexts do matter also. Relativity rules.

    Basically, our (western, educated, industrialized, democratized societies) economic theorizing and practice is parochial and poxy. Personal opinion, you understand. Is there anything else available? Maybe. But … …

    Thanks again. We’ll be back at this.

  12. @DOCM

    ..blah blah..pokey little holiday homes for plebs..blah blah..that awful Garth Brooks..blah loving oiks..blah blah..undeserving poor..blah blah..inequality due to the less well off making poor investment decisions..blah blah..

    In other words, simple observation suggest that what drives, or rather maintains, inequality, to a certain extent at least, is short-term thinking, or not thinking at all, combined with having a sufficient surplus of income to do so. How to work this into the overall equation is a bit of a problem.

    You think that the roots of the increasing inequality in the western world are poor lifestyle choices and bad budgeting? Words fail me. No, wait…


  13. @ JG

    Cassidy on the issue I was dealing with!

    “Some people claim that the takeoff at the very top reflects the emergence of a new class of “superstars”—entrepreneurs, entertainers, sports stars, authors, and the like—who have exploited new technologies, such as the Internet, to enlarge their earnings at the expense of others in their field. If this is true, high rates of inequality may reflect a harsh and unalterable reality: outsized spoils are going to go to Roger Federer, James Patterson, and the WhatsApp guys. Piketty rejects this account. The main factor, he insists, is that major companies are giving their top executives outlandish pay packages. His research shows that “supermanagers,” rather than “superstars,” account for up to seventy per cent of the top 0.1 per cent of the income distribution. (In 2010, you needed to earn at least $1.5 million to qualify for this élite group.) Rising income inequality is largely a corporate phenomenon.”

    The two explanations are not exclusive of one another. In the latter case, however, the evidence that it is simply a coterie sharing the spoils of office. In the former, the defence of those earning such phenomenal sums is that it is the market that decides. The question then becomes to what extent is the market operating in what could be described as a normal manner or whether it is simply another product of the dominant capitalist culture through advertising, promotions etc.

  14. BWS – I was only having a little fun, not frustrated ; )
    Personally I think the economist bit you clipped was fair, if we are using the conventional meaning of the tradition of political economy that Picketty is writing in (which he mentions in the book – western,post industrial revolution, interested in the interaction of politics and the economy in an industrial capitalist society)
    I agree there are any number of writers, philosophers etc from many eras and places who have *something* to offer (that something, to mymind, is generally limited even in the case of the ‘great political economy’writers of the past – smith, marx et al) We have to live in our own time after all.
    Im sorry if I sounded snarky or frustrated, that wasnt my tone.

    jg – please tell me you joke that the godfather is influential in business strategy ?

  15. jg – on the practicalities of runing a business Im sure the works of sun tzu would be useless though. As a matter of encouragement and inspiration perhaps, but what did he have to say about payroll and bringing a product to market?

  16. Edward Luce on the electoral prospects of the GOP.

    The spirit of Horatio Alger is alive and well.

    To quote Michael Moore;

    “Alger was one of the most popular American writers of the late 1800s. His stories featured characters from impoverished backgrounds who, through pluck and determination and hard work, were able to make huge successes of themselves in this land of boundless opportunity. The message was that anyone can make it in America, and make it big.”

    And not just in America!

  17. @rf i kid you not,these books appear often on the lists of most influential business books,art of war,godfather,the prince i know!

  18. @ jg: – and Musashi!

    @ rf: Thanks. No worries! Its just that there is so much Anglo-Saxon economic stuff and not enough from other regions.

    Europe was a total sh*t-hole until Medieval scholars started to translate the Arabic stuff into their local European languages. And the influence of Asian cultures would also have been significant. And now we look down our snotty intellectual noses at these folk.

    You’re correct to frame Political Economy in our time. Looking back, whilst useful, can be unhelpful in attempting to make sense of a modern, industrialized economy with a democratic form of governance. In historical terms these latter are somewhat short-lived and since 1700 or so, we have been ‘living-the-hog’ on coal, oil and gas. Four centuries of ‘civilization’ out of forty? We have had only one where oil was the essential economic fuel. And those 1900s were not exactly a ‘ball-of-laughs’ for 100s of millions of folk.

    Each time I read some narrative about the doomed fate of mankind if we do not mend our ways (which we will not!) I have an immediate urge to pitch the thing into the wastebasket. And that includes Piketty’s ‘Capital’. Such stuff is unctious, patronizing and useless. Better to just explain to folk how we got to where we are – via Permagrowth, and that over some time interval (several decades) things will start to slow down. Those who understand the problem may, or may not, do something for themselves. The majority will simply party-on. How can one imagine life in Ireland in the 1930s? They can’t, and won’t.

    Carpe diem – all the best civilizations did that. And look what happened to the poor beggars! We are no different.


  19. @DOCM its a strange place thats for sure,NY is a long way from the republican heartland,its more European!
    Intrigued by Yvonne’s paper that Liam opened a tread on,catching up on my Schiller who wrote the definite ‘wealth’ effect papers.
    To be continued oh i scored some great seats at Fenway (baseball) for that Friday evening after the book thing..ah the 1%:)

  20. @ David Madden

    Thanks for the link! This extract struck me in particular.

    “Aren’t we far from the rentier capitalism of the 19th century Europe?

    “Piketty agrees. High β does not mean exactly the same thing today as more than 100 years ago. We are indeed living in a “patrimonial capitalism” (a new term coined by Piketty, the inheritance-based capitalism), but with (i) lower concentration of property at the top, (ii) property that has “penetrated” much more deeply into the middle classes, and with (iii) labor incomes received by top managers and bankers which place them, alongside the “rentiers”, into the top 1%. Among the members of the top 1%
    “cohabit” the “coupon-clipping rentiers” and the “working rich” (Chapter 8).

    Essentially, the modern “patrimonial capitalism” has succeeded in spreading modest property across the entire top half of the income distribution (as opposed to top 5% in the early 1900s) and in creating high labor incomes.
    But the ownership of capital, often through inherited wealth, still remains crucially important, and—in a remarkable statistic—Piketty shows that the annual flow of inheritances as a share of national income in today’s France, UK and Germany is about the same as a century ago: between 8 and 12
    percent of national income.

    Moreover, the percentage of population born in the 1970-1980s that
    receives inheritance equal to the capitalized lifetime earnings of a worker in the bottom half of the wage distribution is about 12%, again the same as a century ago. Among the coming generations it will likely reach 15% (Chapter 11). In conclusion, Piketty agrees, yes, today’s “patrimonial capitalism” is not exactly the same as a century ago: it has a broader base and the concentration of wealth at the top is less; high labor incomes are more frequent. But its key feature—ability to generate a satisfactory income without the pain of work—is still there. Rastignac’s dilemma is back.”

    Based on the reviews that I have read, this must surely be the weak link in the Piketty argument i.e. the spread of capital ownership, notably in terms of property, bears no comparison to previous eras with which a comparison is being made. As I instanced above, his native country is a prime example of this phenomenon. Rastignac’s dilemma has not returned. Insofar as it exists, it consists of the wives of modern billionaires – both of the legitimate and dubious (Russian) variety – taking their spouses to the cleaners in the divorce courts of London.

  21. @ DOCM

    “i.e. the spread of capital ownership, notably in terms of property, bears no comparison to previous eras with which a comparison is being made.”

    Mostly down to petrol. Sui generis. There has never been an economic sparkplug to match petrol. A very complex system was built on the back of it.
    Now the petrol is running down.

  22. Robert Shiller on “narratives” (H/t Eurointelligence)–shiller-attributes-japan-s-incipient-recovery—and-weak-growth-elsewhere—to-prevailing-economic-narratives

    And the probable wave of the future, that of behavioural economics?

    Not every situation can be reduced to “ticking the right box” (page 15). The balance that can be struck between the benefits to society and individual freedoms will vary from society to society. The evidence from the most egalitarian and advanced economies – nearly all Scandinavian – suggests a level of interference may be required but that is not widely acceptable elsewhere e.g. sale of alcohol confined to managed state monopolies, rigid control of gaming laws, total public transparency with regard to personal taxation etc. etc.

  23. I can highly recommend the review of Capital in the 21st Century> that David Madden links to (worth following Branko Milanovic on twitter as well). Read it twice in two weeks now. Less keen on the Cassidy piece, seems like a series of counter arguments with no research to back them up.

    It is worth noting that though Milanovic points out some potential methodological shortcomings and crystal ball gazing in the book that he does not say any of the problems seriously undermine the thrust of its thesis. I was also doubtful about Milanovic’s point that increases in GDP in less developed countries could give us 100 years more of more even economic growth, the balance of power between capital and labour is decided on a national level so the relative equality of growth outside the developed world is not going to either help the west escape Patrimonial capitalism or change the global balance of power temporarily in labour’s favour.

    It seems more likely that an international ratchet effect (competition for the favour of capital, “free” trade agreements) will mean the developing world “inherits” the degenerate power structures of the developed world before labour can enjoy its advantage. Perhaps global warming will do its bit too.

    The debate over Capital C21 will get ugly though. I think you can expect The Economist and various other organs of neoliberalism to start the fight back soon with the usual balance of panglossian neoliberalism, faux fatalism and noise making.

    A taste of things to come:

    * Group nit picking (Perhaps Picketty misinterpreted this inconsequential thing while spending ten years on his research?)
    * Crocodile tears (Pinketty’s thesis is correct but sadly international tax agreements are impossible. Lets move on.)
    * Studied indifference (Sure capital has the upper hand but is the new feudalism such a bad thing? Rising tide blah blah.)
    * Unsupported assertation (Biotechnology! All shall have Robots! Never mind who controls them.)
    * Plain old dissimulation (Sure don’t the middle class have houses now? It is not capital they can liquidate/invest but so what?)

    For noise making see above.

  24. @ rf: Thanks for the Pettis link. Will print and read. Comment later.

    Read that Shiller Project-Syndicate piece. Bit waffly – esp about The Land of the Rising Sun. Now, they are different on that island/s. All bets are off when you muse about the Japanese – being a tad xenophobic and all!

    Nice thesis: stories cause fluctuations. Probably caught a split-image of an endless tape – you know like, a single frame from the roll.

    iStuff is confidence boosting??? “Give me a break!” That Saki must have been strong!

    Going on the Piketty reviews, I’ll skip reading it. Maybe later. If Piketty is as good as Benjamin Friedman; ‘The Moral Consequences of Economic Growth’ (2005) – then that will suffice.


  25. the onion is always fun.

    What I see so far from a partial read, Piketty doesnt seem to mention, that the US had marginal tax rates of up to 70 % until Reagan, which provided a solid incentive to get around via non-monetary goodies (Fig 8.6 and after)

    reading this in kindle format (no page numbers, grrrr, but the only way to get to, in Germany in the moment)

    where is “annual flow of inheritances” ? (going by Fig nr !)

  26. wealth distribution (Fig. 10.6) does in the last 50 years not show the dramatic changes, (some interpreters of ) Piketty talks about

    capital return beyond what is needed for growth is simply consumed

    and what Fig 10.10 + .11 show, are the consequences of the tremendous destructions during the 2 WWs

    “According to this theory, the reason why the return on capital has been historically stable at 4– 5 percent is ultimately psychological: since this rate of return reflects the average person’s impatience and attitude toward the future, it cannot vary much from this level.”

    sums it up.

    Making sure, that folks really pay their marginal tax rate, and not just 15%, by closing the tax havens, and bringing estate taxes back to former more progressive leves,

    that will cure the excesses of the last 10 – 20 years.

    My expectation is that an aging western society without war will probably drift to an r of 3 – 3.5 instead of historic 4 – 4.5%, and thats it.

  27. sionce the interest here is now really breath taking,

    I wonder, did any of the commenters come across a blog, which discusses the piketty book more with numbers and equations?

    Pointing me to that would be nice : – )

  28. @ rf: That Pettis essay. Seems reasonable and balanced, apart from a few nitpicky technical economic points. I might have some questions about the causal relationships between various economic processes and the increases in wealth and income inequalities. To me, income and wealth inequalities are an innate characteristic of Homo Whatsoeverus. Our current manifestations just being more salient – for us. They abide!

    Inequalities in income and wealth are highly relativistic in time, in geographical location and in societal extent. You cannot meaningfully aggregate such large variable numbers and quantities from such disparate populations into statistical estimates and accompanying graphs, without significant losses of relevance. Context matters. “You must study and think deeply about this matter” – M Mushashi. Good advice!

    A few others have been here before us. I mentioned Benjamin Friedman above, but Eric Beinhocker: ‘The Origin of Wealth’ (2006) is probably close to Piketty. I won’t be able to judge until I actually read ‘Capital’. Paul Samuelson, before he became mathematically distracted, ‘produced’ a very readable student textbook: ‘Economics’, (1948). He devotes some space to discussing the importance of income. Joseph Schumpeter: ‘History of Economic Analysis’, (1954) also has an extensive discussion of income. And for a really entertaining narrative about wealth – Thorstein Veblen: ‘The Theory of the Leisure Class’, (1898). So let’s keep Piketty in context. At the moment he’s ahead on points. Season has a long way to go yet!

    For what this is worth! Income (animal, vegetable or mineral) and wealth (real or virtual) inequalities, wax and wane both in nature and intensity, within a temporal, socially and politically constructed matrix. Plato seems to have been keen on the inequality bit. Made for a ‘good’, and ordered and civil society. Empires, East and West, rose – and fell on it. Our current income and wealth inequalities only differ from the historical ones in so far as our experience is a direct consequence of our harnessing of a massive, one-off, supply of chemical energy, close-coupled to some very elegant, sophisticated and robust engineering technologies.

    As long as Homo Whatsoeverus abides – so will inequalities, and all the discussion and argument about them. Won’t change much. But it does sell books and clog up the blogs!


  29. francis. I presume the Krelle text is in German? If so, this limits its readership. Piketty originally published ‘Capital’ in French and had it not been translated into English, its audience would have been limited also.

    A question: – Is it held – as a true economic belief, that there exists a single mathematical expression, for example E=MC^2, which may be used to represent the practical operation of an economy? – that is, a General Equilibrium of Everything? And the elucidation of this expression, together with its essential variables, is the Holy Grail of Economics?

    If so, I think someones are likely to be somewhat disappointed. But I suppose that will not stop theoretical economists from experimenting – and cause great harm to many.

    A slight aside in respect of Goodwin’s: If you ask folk to name the ‘leaders’ of the major Allied and Axis powers during WWII – would they be able to name, without hesitation, Churchill, Roosevelt, Stalin, Mussolini, Tojo? I doubt it. Yet I suspect most would, with little hesitation, mention Adolf H. Interesting?

    And Stalin was some sort of ‘saint’? He started his murderous pogroms and ethnic cleansing programmes in 1926 and continued until early 1950’s. Victims? 20 millions is the estimate. Interesting?

  30. @bws

    That seems a bit unfair on students of the economy. e=mc^2 is merely one of many equations hard scientists use to describe the universe and there has been no grand theory of everything to date that I have noticed, so I don’t see any reason to scoff at those who try to use a bit of maths occasionally.

    I suppose yer man H’s name recognition, possibly rivalling that of Simon Cowell, has something to do with dynamic, influential dictatorship. Churchill scores very highly given he was just head of a coalition government, had to get a majority in cabinet for everything and often had his wings clipped. Roosevelt didn’t even have the power to decide to enter the war…

  31. @ grumpy: Not attempting to be ‘unfair’. It did cross my mind – reading the Pettis piece and remembering a few others, that there appeared to be an underlying economic based assumption that it might feasible to mathematically model – if not the full economic process, then at least some parts of it, in the hope or expectation that a more explanatory model would emerge. It won’t, because it can’t. Now, attempting to argue and explain that conclusion (or opinion, if you wish) is not practical on a blog.

    Basically, I can tell you a great deal about the biochemical make-up and metabolic process of a single, living, eukaryotic cell. A human is composed of – approx 10^16 individual cells. But the aggregate physiological output of a human is NOT the statistical aggregate of all of those cells – or even near any sort of aggregate, even of individual tissues. That’s how I think about the economy. Semi-probalistic and semi-chaotic. 😎

    Math is good, grumpy. Pity that some mathy inclined folk do not have a somewhat more secure connection to ground.

    The ‘popularity of Mr H is quite spooky. The others are virtual unknown to to Homo Popularus! Will they raise statues at some later date? Spooky!

    Thanks, and Cheers.

  32. Piketty seems to play the game of word redefinition, so I have to read more, before discussion in detail.

    And the next few days I don’t have time, so just a few preliminary comments, I believe could be useful for others with their reading / contemplation.

    If you want to sell a bestseller, even one or two simple linear equations seem to be a reason to apologize for. Something like Krelle is for the 0.01 – 0.1%, even in the same language

    Piketty writes beta = s / g ,

    which suggests that beta is a function of more stable input s and g, where in fact

    s = beta * g

    s the much more realistic / important dependence, with beta mainly stable and g a consequence of convergence / demographics, examples US and Denmark. To put it hyper simplistic, but hopefully understood by the most here in this blog.

    Piketty came in very young years to Boston, because of his math abilities in economics. He can do the sophisticated calc, but was appalled by the equation gimmickry in this ivory tower culture, as so many mainland Europeans.

    As a physicist I always say science is data AND theory, and the Krugtrons / LSE / Oxbridge are the anti-thesis to that. Infertile Glasperlenspiel.

    Piketty built a solid database for many countries, for many years, and with many others, Saez, the folks via the vox charts … article, the other thread to basically the same base topic.

    And I am pretty sure that he did a lot more, pretty similar to Krelle’s magnum opus, to be seen in the near future !!

    And now look at Piketty from an MBA perspective, with the emphasis on Marketing AND strategic business development.

    He shows the anglo establishment the middle finger, e.g. publishing French first.

    He becomes totally independent of any anglo dominated journals by writing a bestseller, with sufficient academic credentials already in place. With that he can place any future article he wants to write.

    The simple, emotion driving messages (“return of the rentier class”) makes it sell very well, while carefully avoiding any too strong wording, which would require back pedaling, when the more sophisticated version with real equations comes out : – )

    In the sociology driven French circles, he is already now the shark in the carp pond. Who here can name one contemporary French economist? Some school, like Ordnungpolitik ? LOL.

    And this is his captive audience, not penetratable by anglos, and (intellectually) hungry. And he does a good thing, for France, ….. and for Ernie: he is opening a second front to neoliberalism

    He cashes in now first, then drives institutional change in French social science, with a lot of influence on personal decisions, my wild guess, he will one day become member of academie francaise, possibly more.

    And all this interacts with each other, in mutually reinforcing timing, and I appreciate the craftsmanship : – ) Piketty is really goooood.

  33. Piketty refers to Arthur Young’s book “A Tour in France 1787-1790” while reading that I came across “A Tour in Ireland 1776-1779”. It is on Gutenberg, well worth a read.

  34. Philip Pilkington: Misdirection – Galbraith on Thomas Piketty’s New Book on Capital
    Posted on April 3, 2014 by Yves Smith

    Yves here. The best review so far on Thomas Piketty’s new book Capital in the Twentieth Century is by Jamie Galbraith, and we’ve featured it in Links. But the article itself is long and a bit wonky, so Pilkington’s recap is a useful distillation of Galbraith’s piece.

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