Jeremy's Reviews > Capital in the Twenty-First Century

Capital in the Twenty-First Century by Thomas Piketty
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it was amazing
bookshelves: sociological, politics, philosophy

Given the amount of hype and misinformation around this book, I'll start by saying what Capital in the 21st century is not about.

This book is NOT:

1. A work of opinion journalism or punditry. Though, obviously, it does contain the views of its author
2. A prescriptive manifesto trying to explain how to utterly eradicate inequality worldwide, though its author does feel constructive steps can be taken to reduce such inequalities.
3. A work of Journalism written in response to the recession of 2007-2008 or to cheaply capitalize on the surge of public interest in matters financial in recent years, though obviously anyone interested in those topics will find it intensely engaging.

This book is a staggeringly in-depth, wide-ranging, rigorously researched, endlessly quantified and qualified work of economic history. Thomas Piketty is interested in wealth. Where does it come from, how do we talk about, how can we understand its history in a modern context and what does its distribution at different levels tell us about our world, and perhaps most of all, how might that distribution be problematic?

In order to attempt to answer these questions, he has collected, organized and presented an unprecedented volume of data, not merely about where wealth is concentrated now, but where it has been concentrated using data from multiple countries going back to the 19th century (and in the case of his native France, even a bit further than that). The real power of this book, and I suspect one reason its been praised/condemned so militantly in recent months lies in its macro-economic, longitudinal perspective. Piketty is interested in what the broadest net of information possible tells us about capital in the modern age. And what it tells is powerful, disillusioning and ultimately humiliates economic dogma of every ideological stripe.

He's so concerned about explicating this information, with breaking it down with a litany of analogies and concrete examples, and with talking about its limitations and potential pitfalls, that at times the reader almost doesn't see the intimidatingly complete picture of modern wealth inequality he has built up. Reading this is like watching an adult walk into a room full of people who have long since forgotten how to be adults. He synthesizes the best ideas from economic thinkers as diverse as Marx, Ricardo, Kuznets, etc while at the same time utterly humiliating their worst ideological tendencies with the sort of data they either didn't have or were simply too driven by their own dogmas to even consider assembling.

The picture he paints of the state of inequality of wealth in our world is harrowing precisely because of how pragmatically clinical it's put together. There is precisely no observable economic force (no free-market, or growth rate or invisible hand) or principle or idea, that will prevent wealth from continuing its already stratospheric concentration into fewer and fewer hands at levels which we haven't seen since the 19th century. Indeed, one suspects the reason so many of the book's historical and cultural references (Jane Austen and Honre de Balzac show up in this book, much to the shock and delight of this overly-humanistic reviewer) come from the 19th century is because, as Piketty shows, we are quickly returning to a world where economic inequality resembles and quite likely will exceed the sort of stratification seen in 1800's europe. In short, all the indicators he presents show a possible future where personal initiative and hard-work will be worth nothing compared to the power of returns on super-concentrated and largely inherited securities and private fortunes.

That any sincere economic analysis could even hint (and this book goes way beyond hinting) that the future of capital would look like the hyperbolic plane of unfathomable wealth and unbearable poverty that animated so much of the 19th century, should give a pause to even the most militant neo-liberal policy advocate. Piketty's conclusions, rooted as they are in a wealth of historical data drawn over a century and a half, are dramatic, alarming and above all, profound. There is no historical example to be found of a society whose concentration of wealth has continued to grow unabated at the level ours has without inevitably facing some profound, usually gruesome sociopolitical upheaval.

Whether the extremely pro-active, and as he admits, pie in the sky, idea of a global tax on wealth is really possible will probably remain to be seen. But the real point is that meaningful, coordinated international action on transparency and taxation is worth attempting. As the book constantly reiterates with a slew of compelling data, the only other force which has ever stemmed the tide of such wealth disparities was the chaotic, murderous world war period from 1914-1945. Surely attempting to address this problem now is superior to waiting for a global blood-bath, or a French Revolution round 2 to tip the scales back. As Piketty's pragmatic reading of economic history proves, no outcome is guaranteed, but numbers can tell you a lot more than nothing.

This is a demanding book, maybe not Hegel or Heidegger-level demanding, but it requires discipline and a willingness to be lead through some very important, brilliantly elucidated data. Piketty has attempted a grand synthesis of economics and history which also incorporates ideas from literature, sociology, politics and psychology. What's more, he has done so in a way which virtually anyone with a high school diploma and a bit of patience can find accessible.

Capital in the 21st century is that rarest of things; a non-fiction book of the moment which could very well prove to be the book of its age. It will certainly haunt my perspective for some time to come. I recommend this book unconditionally.
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Reading Progress

Finished Reading
May 2, 2014 – Shelved
May 2, 2014 – Shelved as: politics
May 2, 2014 – Shelved as: sociological
May 2, 2014 – Shelved as: philosophy

Comments Showing 1-25 of 25 (25 new)

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message 1: by Gregsamsa (last edited May 02, 2014 06:20PM) (new) - added it

Gregsamsa Thanks for giving us such a clear summary of a book I was very iffy about reading, most of all because of its success.

I recently heard an interview with a French journalist who said that the French are puzzled at so much American excitement over a book which states, to them, the obvious.

message 2: by Foppe (new) - added it

Foppe What do you make of this observation by Kuttner? It seems to me pretty peculiar that Piketty would make this argument.
In Europe, World War II was massively destructive of both physical capital and financial wealth. France suffered huge losses and Germany even more, while Britain lost roughly one-fourth of its prewar capital in borrowing to pay for the war. Though Piketty treats the period of 1914-1945 as a single statistical era for purposes of understanding wealth compression in all the major Western nations, the American experience was entirely unlike Europe’s. In the U.S., the most interesting years are 1941-1973, not the years bracketed by the two wars as Piketty contends.

Despite some losses to financial capital during the Great Depression, the more powerful era of equality in the U.S. began during World War II. The war was a massive macroeconomic stimulus; it produced full employment, stronger unions, and investment of public capital. The government’s wartime policies also repressed private finance in multiple and reinforcing ways, including the Fed’s pegging interest rates on Treasury bonds at a maximum of 2.5 percent, marginal tax rates set as high as 94 percent, and an intensification of the anti-speculative financial regulation of the New Deal. All of this did not end with the war. It had a half-life well into the postwar era, until unions were bashed and finance deregulated beginning in the 1970s.

Piketty mentions some of this briefly but doesn’t focus on the political dynamics, and he is surprisingly blasé about the role of deliberate policy. “Neither the economic liberalization that began around 1980 nor the state intervention that began in 1945 deserves much praise or blame,” he contends. “The most one can say is that state intervention did no harm.” But this can’t be true. The key difference in the two trajectories of non-recovery after World War I and robust recovery after World War II was in the policies pursued.

Jeremy This is an excellent point, and obviously a time period (1914-1945) which needs to be examined in greater depth than what is treated in the book (Piketty himself admits as much towards the end of the article you linked). The book's perspective is at times almost militantly longitudinal, he seems weary of getting too bogged down in the shifts occurring in this time period, which to be sure, are momentous. The book would probably have ballooned to 4-5x its size if every one of the economic 'periods' it covers was given a thoroughly in-depth treatment. Who knows? Maybe one day we will get a volume 2 of this book which will offer such a treatment. I'd certainly be the first one in line to get a copy if that occurred.

Generally, I think the mark of a great book is not merely the questions it answers satisfactorily, but the questions it opens up to us and which require further inquiry. No knowledge (especially in the social sciences) is ever complete, and no author is ever the alpha and omega of a subject. There is always further room for exploration.

message 4: by Jennifer (new) - added it

Jennifer Neal Fantastic review.

Jeremy thank you, I try to give everything as fair a reading as possible

Phyllis I could not have said it better--excellent review.

Steve Thank you for your very competent review!

message 8: by Stanzen (new) - added it

Stanzen What a great review! I just finished the introduction by Jesper Roine and was not sure, whether to go for 'the full story'. No more so, thx :-)

Florian Thanks for this review. It's excellent.

Jeremy Florian wrote: "Thanks for this review. It's excellent."

My pleasure. I try to give everything I read a fair shake.

message 11: by Hung (new) - added it

Hung Nguyen Thanks for the review. I'm going to read this book and hope I can understand those such in-depth information it provides

Jeremy Dynei wrote: "Marvelous...!!"

Thank you, I appreciate that.

message 13: by Katia (new) - added it

Katia Urquiza Great review. Thank you

message 14: by Henry (new)

Henry Arthur The understanding displayed by the two reviews, Jeremy and Ospinbosun, and interest shown is heartening.
Since this book, there are works by Robert Reich which attempts to come up with a solution. I fear that neither his, nor that in Greek Gods Return;Wealth Disparity Solution, will be implemented. Not, at least, until we get "our representatives" to disclose to us, maybe via blogs, how they spend their time working for "us" as vs the oligqarchy; where they get their bread and butter besides from us etc.
The issues are much too real and immediate to simply comment on them. We must try to get the government which Lincoln thought we had; get the special interests out of politics like Pres. Theodore Roosevelt said on 8/31/1910 instead of letting them rule. Teddy pointed out that the political and economic structure was established and maintained by the government: in monarchies, the monarch owned it all; in oligarchies, the oligarchs do, in republican democracies that are not corrupted by $$$ we the people must trust "our representatives" but check on them to see that they really act on our interests. UMM my soapbox again! But I can not help it; I have seen the damage done to this country since the 1950s. Cry Americal.

message 15: by Juliana (new) - added it

Juliana Bertanha Excellent review, thanks for sharing your thoughts!

Jeremy my pleasure, and thank you

message 17: by Gary (new) - added it

Gary Grubb What a clear, concise and insightful review of this book. While I am only 2 chapters in, I am hooked and will finish this book. This book would probably bore many and put them right to sleep, but this just so happens to be right up my alley. Thank you for you time and well written review.

Jeremy Gary wrote: "What a clear, concise and insightful review of this book. While I am only 2 chapters in, I am hooked and will finish this book. This book would probably bore many and put them right to sleep, but t..."

Thanks man, I try my best to be fair as a reader. It's an incredible book on so many levels.

message 19: by Gene (new) - rated it 3 stars

Gene Jeremy- I can't wait to read Capital In The 21st Century. I recommend to you Kevin Phillip's Wealth and Democracy.

message 20: by Nyonya16 (new) - added it

Nyonya16 Thank you for this review. Have read a couple of Zygmunt Bauman's and am curious about this book by Piketty. Thank you again. Your review has been very helpful.

Jeremy Gene wrote: "Jeremy- I can't wait to read Capital In The 21st Century. I recommend to you Kevin Phillip's Wealth and Democracy."

I will look into that, thank you!

Michelle Excellent review!

Jeremy Michelle wrote: "Excellent review!"

Thank you, I try to give everything I read a fair shake.

message 24: by MD (new) - added it

MD Wasim Hey I don’t have idea how to open book for reading

message 25: by Kevin (new) - added it

Kevin M I prefer to read books on Kindle, but I'm concerned this one will rely on graphs and tables the are better viewed on the dead tree version. Any opinions?

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