Capital in the Twenty First Century by Thomas Piketty

"Yet it seems to me that all social scientists, all journalists and commentators, all activists, and especially all citizens should take a serious interest in money, its measurement, the facts surrounding it, and its history. Those who have a lot of it never fail to defend their interests. Refusing to deal with numbers rarely serves the interests of the least well-off"

This is the last statement of Thomas Piketty's Capital in the TwentyFirst Century. It is a comprehensive look at the history of wealth and income inequality through the past two and a half centuries. The amount of research and accuracy is staggering, they are largely irrefutable, and they are almost all primary (this book exists as documentation of his study, not a fragmented compilation of other studies followed by a political conclusion). Piketty's piece proves that America, and the whole rest of the world, is at the same level of wealth/income inequality that it was at before WWII and posits that this is a problem.

I led with the last quote of the book for two reasons. The first is that it is totally true. Piketty's book may not be the most riveting read; there are no sparkling vampires, there is no humor, it isn't laden with references to hip things that will make the younger readers say "I know that one!". We, my generation in particular, are not interested in numbers as a political phenomenon and maybe we should be. Many young voters are quoted saying things like "I don't know much about fiscal policies, but I really care about social issues". I find this unacceptable. I care about social issues too, but social and fiscal issues are not separate spheres. The problems of today have a lot to do with economy, many people protecting their money appear to be protecting their morals or their rights for example. Citizens and journalists and activists need to watch were the money is going, where it has been, and why. Only then can any political opinion, even one of pure ideological social justice, be fully formed.

Off my high horse; the second reason I led with this quote is because it is one of the only demands the author makes of his reader. Basically I thought that as someone who advocates responsible government intervention in capitalism, this book would be a silver bullet against opinions differing than mine. This is incredibly egotistical of me and if I had held this expectation for long I would have been disappointed in the book. This is because Piketty does not write rhetorically, he is not flashy, he doesn't need to call for reader action. Although he points out that no research can be perfect, his book stands as the closest thing we have. And despite little gems like, showing that levels of inequality have been at their starkest before 1930 and 2008 in the past two centuries, does not really argue much. This is because he doesn't have to. If his statistics are largely irrefutable, so too, is his conclusion; it should be taken not as a demand, but a fact as plain as the sky is blue.

Oh right. His conclusion. Here you go; "The overall conclusion of this study is that a market economy based on private property, if left to itself, contains powerful forces of convergence, associated n particular with the diffusion of knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based". He essentially proves that though the market economy based on private property creates great equalizers, its inevitable outcome will be that the return on capital will outpace the rate of growth (represented by the equation r > g). This creates a society of rentiers (or people who own everything and simply rent it out) who become more and more dominant over those who own nothing but their labor. And his numbers back it up: the global inequality of wealth is currently increasing at a rate that cannot be sustained.

Piketty has many suggestions; a global progressive annual tax on capital being the best, followed by a heavy handed use of inflation, and even some simple taxes like the estate tax and a wealth tax. However after each suggestion follows; "but this should be left up to democratic debate". This means that Piketty is simply calling for us to do...something...even if it is give tax breaks to the largest corporations because you think that is what is going to improve the quality of life and justice. This brings me back to the beginning. The men and women voting, or revolting, or even just complaining need to take a vested interest in numbers and money. Piketty's book is a great start, but you have to be willing to suffer through the immeasurable historic context to find what you ultimately believe is the right solution to our century's greatest problem.