Pikkety on Capital in the 21st Century (Tom Palley)

I have just finished Piketty’s magnum opus which is clearly one of the most important economic books of our time. I am still trying to digest the theoretical argument.

Below I provide a link and intro to an important commentary by Tom Palley who argues that Pikkety is too close to the neo classical paradigm re rewards to capital.

This may be a bit exaggerated, but Pikkety does relatively neglect the role of economic and political power in determining the rate of profit and capital’s share of national income. To my mind he also systematically confuses wealth and capital, and has remarkably little to say on the role of financial capital.

The accidental controversialist: deeper reflections on Thomas Piketty’s “Capital”

 

Thomas Piketty’s Capital in the Twenty-First Century is a six hundred and eighty-five page tome that definitively characterizes the empirical pattern of income and wealth inequality in capitalist economies over the past two hundred and fifty years, and especially over the last one hundred. It also documents the grotesque rise of inequality over the past forty years and ends with a call for restoration of high marginal income tax rates and a global wealth tax.

 

His book has tapped a nerve and become a phenomenon. In laying a solid blow against inequality, Piketty has also become an accidental controversialist. That is because his book has potential to unintentionally trigger debate over so-called “free market” capitalism. The big question is will that happen? [READ MORE HERE

 

2 comments

  • Andrew, Piketty’s book was originally published in french and has been read and discussed a year ago in the francosphere. The criticism that you have suggested are the same ones that came to mind when I read the book in French, and I remember that this was also taken up in the reviews the book received. We are all very surprised by the rave in the U.S. over the english version, but hey if it gets people discussing capital and inequality, then all the better

  • http://rwer.wordpress.com/2014/04/19/more-effective-remedies-for-inequality-than-pikettys/

    from Geoff Davies

    “When one looks into the mechanisms that have operated in market economies, one can readily identify mechanisms that pump wealth from the 99% to the 1%. One can then think of ways to stop or reverse these flows, so wealth flows more fairly to everyone involved in its generation. It will be much more effective to fix the problems at the source than just to apply traditional retro-active bandaids like taxes.

    In my own book Sack the Economists, I identified seven fairly obvious such mechanisms.”

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