Book Review - Capital

Author: Thomas Pikkety

There’s a lot to say about a 600 page history of monies, wages, and economic policy over the last 300 years.

In fact, one of my biggest gripes with the book was the verbosity. There were several times where Pikkety repeated himself on the value of data for making informed policy decisions. Or how important democratic discussion is for setting the ideal tax rate. Packaging these ideas into a succinct concept like he does with the formulas, like r>g for example, was a missed opportunity to make the book more approachable to the citizenry he’s trying to equip.

Delivery aside, the content was less than expected. Overall Pikkety seems to have done an extensive amount of work collecting, catalogging, and cleaning historical data from a large variety of sources. Ultimately it feels like that’s where this book ends. He starts with two seemingly reasonable assumptions, that population and productivity growth will average out around 1.5% for the forseeable future. With that well researched historical context he explains why capital’s growth (near 5%) outpacing this is cause of alarm to the rest of society who want to live in a democratic world. That is, while growth is lower than capital investments, rentiers are able to live off their income and re-invest the rest. Again thanks to some historical context Pikkety shows how this re-investment, along with inheritance and varying returns on large sums, can grow to massive levels over a long period of time. There’s varying policy solutions to combat this inequality (abbreviated: r > g), most notably progressive wealth taxes.

None of this was extremely shocking, new (thesaurus?), or novel, and maybe he was not trying to be any of those. Both his introduction and conclusion note the importance of economics crawling out of its moral safe-space. The mathmatic ivory tower economists have created for themselves has led to a world whereby we all have no data to make informed decisions. ((Whats my point here??)). My dissapointment stems from me not knowing how to categorize this book. Reading Stolen or Corruption of Capitalism has me left with a better sense of policy that solves the sympotoms of wealth inequality. While FALC or Jacobin leaves me feeling like revolutionary, inspired by Utopia. Pikkety walks this middle ground where he explains the virtues of democratic planning in shaping tax policy and our welfare state (duh) but also how there’s just not enough information to create effective legislation. Thus I spent a week reading a book to arrive with little direction going forward.

Evaluated as a historical text there are some insightful nuggets. The wealth inequality levels that have been reached with differing political discourse were eye-opening. (Such as..). Secondly reading about early American economists who write that the New World needs to stem the tide of accumulated wealth less end up as England in 1919?! That America has long been forgotten and washed out of history books. It’s important that we do not forget it.