Typically, politicians argue an increase in savings increases economic growth, but Piketty argues the savings rate can increase with little to no increase in economic growth especially when the rate of return is exceptionally high.Ī problem within Piketty is his terminology no longer matches the economy. He notes wealth inequality grows as the return on capital outpaces economic growth. Unfortunately, Piketty never says but seems to imply capital can outpace quality business ventures. Google, Facebook and Amazon lost money for a long time before they had created the size necessary to monetize their enterprises. Without capital businesses are not created because they don’t have the money to build the necessary organization to provide value for customers. Capital accumulation is necessary for economic growth. It helps to break down the way the economy and business work within a capitalistic economy. Indeed, Piketty accepts this basic premise, but he implies there are diminished returns as wealth is concentrated. Economists nearly all agree capital is necessary for economic growth. Go to the gym for an hour a day and you’ve finished it in less than a month.Ĭentral to the work of Piketty is a doubt in the productivity of excessive capital accumulation. It’s about twenty-five hours long but it’s not as long as it sounds. Fortunately, it is available on Audible so you can listen to it while working out, cooking dinner or on a commute. Yet few people have gotten around to reading the work. Indeed, this was a work meant to be read by the general public. Piketty does not use too many equations or complex mathematics.
It is impossible to remove the political from his economics because his economics have enormous implications for public policy. He views his economics as intertwined with policy implications and political theory. But Piketty described his own work with the old-fashioned term Political Economy. I will admit this is not technically a book of political science.
This is one of those books anyone who is well-versed in political theory must understand to converse on complex topics. It is not necessary to agree with his basic thesis. The book has reshaped how people think about inequality. Few books have captured the imagination of the intelligentsia like Thomas Piketty’s Capital in the Twenty-First Century.
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