As promised, I’m going to journal my rather slow progress through Thomas Piketty’s Capital in the Twenty-First Century, at least from my perspective. Today I’m taking a look at the introduction.
First off, I’m impressed. Either the writer or the translator has a rather smooth writing style–not something you necessarily expect from an economist. I’m also impressed by an economist who openly says that his answers are imperfect and incomplete.
Piketty leaps right away into his argument–that we have avoided the Marxist apocalypse but not modified the deep structures of capital and inequality. He looks at the historical analysis, going through Malthus to Ricardo, Marx, and Kuznets. After explaining why he does not agree with the Kuznets curve–i.e., inequality decreases as industrialization and economic development increases, he goes on to discuss his sources. He is also careful to point out that the modern theorist can more easily deal with massive amounts of historical data than their predecessors. He flat out says “It is much easier to study the history of the distribution of wealth today than in the past. This book is heavily indebted to recent improvements in the technology of research.”
Thank you computers. I guess.
He sums up his conclusions as follows: first, “one should be wary of any economic determinism in regard to inequalities of wealth and income.” Extrapolating from data gathered during the 1910-1950 time period is affected by both World Wars and policy decisions taken in reaction to those conflicts.
Second–which Piketty identifies as the heart of the book–“is that the dynamics of wealth distribution reveal powerful mechanisms pushing alternately toward convergence and divergence. Furthermore, there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently.”
He spends some time discussing the forces of convergence and divergence, sounding a worried call that the forces of divergence leading to greater income inequalities may be getting stronger, though he considers his conclusions to be less dire than Marx’s.
Then he outlines the geographic and historical boundaries of his study. Historically, he’s looking at the dynamics of wealth distribution on national and international levels since the eighteenth century, with a caution that there is not always adequate historical data. Primary foci are the United States, Japan, Germany, France, and Great Britain, identifying France and Great Britain as having the most complete historical sources. He considers France to be particularly important because first, as a result of the French Revolution, there was a systematic method established to record wealth in land, buildings, and financial assets. Secondly, France’s rate of population growth is a more reliable and consistent means of measuring the impact of such growth than say the United States due to stability of territory and population increase.
This particular point struck me as something I hadn’t considered before. Piketty comments that “the dynamics and structure of inequality look very different in a country whose population increases by a factor of 100 compared with a country whose population merely doubles.” As an American and non-economist I really hadn’t sat down and considered this factor. He goes on to stress that this rate of growth reduces the strength of the inheritance factor in the US, but that we can’t necessarily generalize to the whole world from the US. He considers France to be a more accurate source for anticipating future developments.
Piketty goes on to discuss the theoretical frameworks of this work, getting in a zinger about the problematic dominance of math in economic theory while downplaying historical research and collaboration with the social sciences.
Overall, it’s an interesting introduction to this work and a heck of a lot more readable than a lot of other economists I’ve read. It’s clear I’m going to be learning a lot about things that never popped up in my studies of political science, and it’s going to be useful not just in further development of my political understanding but in potential science fiction worldbuilding work.