The Book Every Plutocrat Should Read
Thomas Piketty’s new tome just might save the super-rich from themselves
By CHRYSTIA FREELAND, Politico.com
April 20, 2014
For students of the plutocracy, this season has been marked by two key events. The first is the continued sense of persecution among the super-rich, as measured by an uptick in Hitler analogies from embattled American magnates. The second is the English-language publication of French economist Thomas Piketty’s instantly influential new book, Capital in the Twenty-First Century.
Correlation, of course, is not causation, and I am pretty sure few of the Nazi-evoking plutocrats have worked their way through Piketty’s tome. But these two milestones of 2014 are nonetheless intimately related. Piketty’s groundbreaking perspective on how and why wealth is accumulating ever more at the very top explains why the 0.01 percent is feeling so threatened – and why that alarm is not as hysterical as it might seem.
The core of Piketty’s work is rooted in the international data sets of historical income that he has been assembling for more than a decade together with Emmanuel Saez, Anthony Atkinson and a group of collaborators around the world. These numbers show that the postwar era, when North America and Western Europe experienced both strong economic growth and shrinking income inequality, was a striking exception. Instead, today’s soaring income inequality, which equals or exceeds that of the Gilded Age – or, in Piketty’s preferred historical reference, the Belle Epoque – seems to be industrial capitalism’s norm. Piketty puts forward an economic theory about why that might be (basically, that capital grows more quickly than the economy as a whole) and some radical political ideas about how we should respond to these economic fundamentals.
(More here.)
By CHRYSTIA FREELAND, Politico.com
April 20, 2014
For students of the plutocracy, this season has been marked by two key events. The first is the continued sense of persecution among the super-rich, as measured by an uptick in Hitler analogies from embattled American magnates. The second is the English-language publication of French economist Thomas Piketty’s instantly influential new book, Capital in the Twenty-First Century.
Correlation, of course, is not causation, and I am pretty sure few of the Nazi-evoking plutocrats have worked their way through Piketty’s tome. But these two milestones of 2014 are nonetheless intimately related. Piketty’s groundbreaking perspective on how and why wealth is accumulating ever more at the very top explains why the 0.01 percent is feeling so threatened – and why that alarm is not as hysterical as it might seem.
The core of Piketty’s work is rooted in the international data sets of historical income that he has been assembling for more than a decade together with Emmanuel Saez, Anthony Atkinson and a group of collaborators around the world. These numbers show that the postwar era, when North America and Western Europe experienced both strong economic growth and shrinking income inequality, was a striking exception. Instead, today’s soaring income inequality, which equals or exceeds that of the Gilded Age – or, in Piketty’s preferred historical reference, the Belle Epoque – seems to be industrial capitalism’s norm. Piketty puts forward an economic theory about why that might be (basically, that capital grows more quickly than the economy as a whole) and some radical political ideas about how we should respond to these economic fundamentals.
(More here.)
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