Capital in the Twenty-First Century

Thomas Piketty Capital in the Twenty-first Century Cambridge, MA: Cambridge University Press, 2014Every so often, a book that shouldn't be winds up being a smash hit. Or, rather, becomes an unexpected success given that its subject matter is far from the celebrity/political biographies, heart-throbbing romances, heart-stopping crime/spy novels or fatuous self-help books that pretty much define popular literary taste. Thomas Piketty's Capital in the Twenty-first Century is such a book.Earlier examples might include John Kenneth Galbraith's The New Industrial State (1967) and Allan Bloom's The Closing of the American Mind (1987). Agree with them or not, they became best-sellers and, though many of the purchasers may not have actually read them, they did attract the attention of countless critics and raised debates among innumerable media pundits and public intellectuals taking sides on the important issues they addressed.Although it is fashionable to say that book publishing is in decline, books by economists, historians, psychologists and others do, in fact, frequently catch the public's fancy and, in the future, there may even be more of them topping best-seller lists, though for shorter periods of time and with proportionately less enduring public impact than in the era before the Internet.In any case, it is clear that Piketty's book has not only become a major international cultural phenomenon, but that it has the potential to be around for a while, stirring up contrarian thinking on all sides of the question of what is happening with or, perhaps, to the economy.Brought down to its simplest elements, Capital in the Twenty-first Century is an attempt to bring Karl Marx's three-volume capstone project, Das Kapital, up to date. It fails, of course, because it has neither the ambition, nor the breadth and depth or the revolutionary zeal of the original. Although I won't be around to pay off if I'm wrong, I don't think it will be read by critics as we segue into the twenty-second century with anything close to the passionate or even the antiquarian interest that Marx's magnum opus attracts even today in what some people wistfully imagine to be the "post-Marxist era. "That said, Piketty has not authored a minor, superficial, or insignificant book. Someone, of course, had to take up the challenge of rehearsing Marx's project at roughly this time (about a century after his ideas inspired the first successful revolution that bore his name), and this effort is certainly a meritorious attempt to fill the need. It comes, of course, after the collapse of the Union of Soviet Socialist Republics and the morphing of the former "Red" China into a previously unexpected and currently dominant instance of an authoritarian style of "Asiatic capitalism. " It also steps up just as the "late capitalism" of the liberal democracies in the Organization for Economic Co-operation and Development experience yet another tack in their uncertain voyage to what Francis Fukuyama (1992) spectacularly prematurely called "the end of history. "From the 1930s to the 1970s, the academic field of economics, government economic policy and the standard practices of the private sector were dominated by John Maynard Keynes and his erstwhile associates and followers. Keynes and Keynesianism became popular as a consequence of the allegedly "Great" Depression. Most of the intelligent and attentive public-whether formally trained economists or merely casual readers of the business pages of substantial newspapers and current affairs magazines-grasped the elements of Keynes' theory.Put simplistically, Keynes advocated relatively severe taxes in good times (the top marginal rate of personal taxation exceeded 90% during the Eisenhower administration in the United States) and endorsed considerable public spending in bad times. The idea was to flatten out the business cycle which not only featured booms and busts, but seemed, with successive bouts of inflation and unemployment, to be building toward a definitive crash that might, so the financiers, merchants and manufacturers of the day feared, precipitate the collapse of capitalism that Marx had cheerfully predicted. …