Thomas Piketty - Capital in the 21st Century

[kochman]

Has anyone read this?
I'm in the midst of it now.

Some herald it as the book that will redefine economic theory for decades to come.

A uber-quick synopsis:
Using tax and income data starting from around 1789 (French Revolution anyway), across 20 countries, patterns, thoughts, and ideas are put to paper. This is the first time anything on such an epic scale has been done. The book made the NYT best seller list, which is impressive for a book on economics.

 

[SS-18 ICBM]

Is this work published in an academic journal?

 

[El_Machinae]

I've listened to a few talks, but his talks (as an author) aren't very easy to listen to. IIRC, his major thesis is that the profits from investing in labour have dropped below the profits from investing in capital (not surprising, you need to pay us at least 2000 calories per day), and this is going to increase the division between rich and poor.

 

[Wrymouth3]

I have skimmed a few pages of the book, I will say that the guy makes it very hard to understand where is coming from, but that could just be me. When I was an undergraduate at George Mason, I took a few economics classes, and the professors at GMU absolutely loathed this guy. That most likely is because GMU is a notorious hotbead for Austrian/Libertarian economics, but the one point they brought up to me what was interesting is that Piketty seems to have a different definition of capital than 95% of economists.

 

[Cheezy the Wiz]

Liberals worship him and conservatives despise him, because both think he is some sort of socialist.

He isn't. This is a simple reassertion of stuff Keynesians have been saying for almost century. He purposefully stops short of advocating the solution that his studies suggest, instead opting for "we should just tax the rich more, that'll fix everything."

I've flipped through his book, but I have no intention of reading it cover to cover. I can think of much more useful 696 pages of book to read than that.

 

[Borachio]

Aaaaand, here's an economist who disagrees directly with Piketty:

http://cafehayek.com/2014/05/deirdre-mccloskey-contrasted-with-thomas-piketty.html

McCloskey, by contrast, has long argued that economists are far too preoccupied by capital and saving. She doesn’t even like the word capitalism, on the grounds that capital is not what got us where we are today. ‘If Scotland is trying to become Holland, then capital accumulation is how to do it. That will double your income, maybe triple it.’ But for her, that sort of accumulation is a scratch-card-sized prize — and the lottery jackpot beckons. She enthuses about the Great Enrichment of the 19th century. ‘What happened, understand, is not 100 per cent growth, but anywhere from 2,900 per cent growth to 9,900 per cent growth. A factor of either 30 or 100.’

That jump in incomes came about not through thrift, she says, but through a shift to liberal bourgeois values that put an emphasis on the business of innovation. In place of capitalism, she talks of ‘market-tested innovation and supply’ as the active ingredient of our economic system. It is incidentally a system ‘drenched’ in values and ethics overlooked by economists.

 

[Cheezy the Wiz]

"Cafe Hayek" - are you surprised?

 

[Borachio]

No, not terribly.

Didn't we have a thread on Piketty only recently? I thought we were all Pikettied out.

 

[downtown]

I'd like to read the book. I've seen WAAAY too many thinkpiece type articles about the book from people who actually haven't read it. I'd prefer to actually check out the text and reach my own conclusion.

 

[Azale]

From what I've read and heard of Piketty, he's not so bad. He's no radical but he takes the entire economics profession to task. He shines a light on inequality in a rigorous and methodical way, basically blaming the entire system even if he hasn't yet developed the requisite nuts to carry through logically on how to fix the solution (can't blame him, he's not a policy guy).

There also seems to be a crapton of poor Piketty critiquing out there from left and right. People who don't read the book. It's a shame because one of the big critiques of Piketty is his failure to really be familiar with Marx so I would hope those Left critiques of Piketty would hold themselves to a higher standard.

In general, I rely on Matt Bruenig for my counters to #HOTTAKE Piketty analysis until I carve out some time to trawl through it:

http://www.demos.org/blog/5/25/14/piketty-has-two-separate-income-inequality-theories
http://mattbruenig.com/2014/06/27/kevin-hassett-misrepresents-piketty/
http://mattbruenig.com/2014/03/14/piketty-on-marx/

Is this work published in an academic journal?

who would care even if it was? academic journal does not mean its automatically legit, as Reinhart & Rogoff proved

I have skimmed a few pages of the book, I will say that the guy makes it very hard to understand where is coming from, but that could just be me. When I was an undergraduate at George Mason, I took a few economics classes, and the professors at GMU absolutely loathed this guy. That most likely is because GMU is a notorious hotbead for Austrian/Libertarian economics, but the one point they brought up to me what was interesting is that Piketty seems to have a different definition of capital than 95% of economists.

Not that difficult for me and I'm not much more versed than you. Watch some of his talks/podcasts/etc first.

Professors at GMU "loathe" him because they're clowns. Not attacking you, but who cares if his definition of capital is different? Why is this a bad thing in a notoriously broken field? It COULD be the case that this is a bad thing (I've read stuff that's convincing to that effect) but if the crux of their argument is "he disagrees with the lamestream" then its almost an auto point in his favor.

 

[dutchfire]

I heard a talk by a local economist on Piketty. Sounded quite reasonable. I didn't seem very radical to me, but that might just be because I'm from commie-pink Europe.

 

[Hygro]

I'd like to read the book. I've seen WAAAY too many thinkpiece type articles about the book from people who actually haven't read it. I'd prefer to actually check out the text and reach my own conclusion.

Yeah, same. That said, Jamie Galbraith wrote two very good critiques. Wrymouth is correct, too, that Piketty uses his own definition of capital. It's actually one that is more in line with how the public uses the term. Piketty is basically using the term capital to mean money and financial assets.

I heard a talk by a local economist on Piketty. Sounded quite reasonable. I didn't seem very radical to me, but that might just be because I'm from commie-pink Europe.

Netherlands is capitalist AF.

 

[Tahuti]

Netherlands is capitalist AF.

The whole Capitalist USA vs. Commie Europe is a stereotype, and a highly inaccurate one at that. Britain and Denmark are more than occasionally considered to be more business friendly than the USA.

 

[Wrymouth3]

Professors at GMU "loathe" him because they're clowns. Not attacking you, but who cares if his definition of capital is different? Why is this a bad thing in a notoriously broken field? It COULD be the case that this is a bad thing (I've read stuff that's convincing to that effect) but if the crux of their argument is "he disagrees with the lamestream" then its almost an auto point in his favor.

I am very unqualified to speak about what I think about economics and I don't claim to be anywhere close to competent in knowing what it's all about. I honestly forgot what it was that they told me why he disagrees with what "capital" was and why it was bad, I never once said I agreed with them, all I said is that they gave an interesting statement about it.

 

[El_Machinae]

It's only a problem if the definitions aren't clear.

 

[KMRblue1027]

I haven't had the chance to pick it up yet and it's probably too advanced for me to understand right now anyway, but I know his work was the prime focus of Robert Reich's Inequality for All from last year.

 

[Cheezy the Wiz]

His conclusions in CITTFC are much the same as well, although I would contend that he is further to the Left than Reich. Reich is basically a more douchey version of Krugman.

 

[Hygro]

His conclusions in CITTFC are much the same as well, although I would contend that he is further to the Left than Reich. Reich is basically a more douchey version of Krugman.

I had Reich for a semester

 

[Zkribbler]

I know Krugman likes him.

My copy of Piketty hasn't arrived yet. It's coming along with Terry Prachett's latest book, so who knows when I'll get to it. (First things, first.)

 

[Cheezy the Wiz]

I had Reich for a semester

That's pretty cool actually! It's awesome to study under famous people. I've met/studied under several large historians in my field too, and am lucky enough to have one of them as my dissertation supervisor!