8 ms·

Piketty’s Capital in a Nutshell

• mark_l_watson 12y ago
  The HBR review, when I first read it, struck my as the establishment trying to downplay the importance of this book. Krugman, who I sometimes do not agree with, but was right on in reviewing this book, rightly points out that the elites are freaking out over this book because the facts are against their position. This is an important book depicting how bad income equality has become because of inherited capital.
  • vixin 12y ago
    Your 2nd paragraph: merely your assertion ('freaking out' suggests you're not dispassionate about this). Plenty of rebuttals. A short one to be going on with here: http://www.adamsmith.org/blog/economics/thomas-pikettys-latest-bright-idea http://www.adamsmith.org/blog/economics/thomas-pikettys-late...
    • _delirium 12y ago
      In what sense is the post you linked a rebuttal? It hints in one parenthetical sentence that the post author has some skepticism about the book's main conclusions (suggesting that Piketty looked insufficiently at consumption inequality), but the author doesn't provide any details.
    • davidw 12y ago
      Here's another one: http://www.foreignaffairs.com/articles/141218/tyler-cowen/capital-punishment http://www.foreignaffairs.com/articles/141218/tyler-cowen/ca... Ultimately a very political subject though, so I flagged it.
      • DanielBMarkham 12y ago
        And a third. http://www.thedailybeast.com/articles/2014/04/27/what-s-at-stake-in-the-tocqueville-piketty-debate.html http://www.thedailybeast.com/articles/2014/04/27/what-s-at-s...
      • mjn 12y ago
        While we're at it, another (moderately detailed) critical review, from someone with the opposite political preferences: http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century http://www.dissentmagazine.org/article/kapital-for-the-twent...
    • mattmanser 12y ago
      I'm not sure it's ever worth reading something that contains something along the lines of: [author] has a habit of [baseless insult] It shows the blogger isn't professional and it's pointless reading it.
      • adamnemecek 12y ago
        The name of the blog itself suggests that the blog will not be impartial.
      • zo1 12y ago
        "Piketty has a habit of not looking at consumption inequality which is the thing we might actually be worried about" The actual quote from the article. So people reading your [misleading comment] know that the author didn't actually put a [baseless insult] where you claim he did.
        • mattmanser 12y ago
          I'm not misleading, it's an accusation of incompetence, every single one of those kind of phrases is attempting to convey just one thing: hurr, durr, [attack_target]'s too stoopid/misleading you so everything he says is wrong.
          • zo1 12y ago
            So let me get this straight... According to you, having someone analyze and criticize your work, and state so is in fact actually saying "hurr, durr, [attack_target]'s too stoopid"? And yes, you are misleading. Because if I didn't actually go read that article and find the part you were complaining about I would have assumed an actual insult was where you claimed it was. Whereas, in fact, I found criticism, which the author attempts to justify/backup in the rest of the article. But you'd have us believe that that was all that was in the whole article. That's called misleading people; pretty much general dishonesty on your part.
    • vanderZwan 12y ago
      > Ah, but that story doesn't work. For look at what Piketty is actually saying: the reduction in inequality wasn't as a result of unions, taxation, minimum wages or redistribution. It was simply that growth was faster than the increase in old wealth. This asserts that these two are entirely unrelated, which is jumping to conclusions at best. Also, a reduction in inequality is a redistribution of wealth by definition, something Piketty points out at the very beginning of his book.
    • deleted 12y ago
      [deleted]
  • yummyfajitas 12y ago
    Could you explain what facts you believe Piketty conveys? What is the importance? I'm about halfway through the book, but apart from a bunch of historical data ("wealth inequality was high, then low, then high", "really bad things like war and depression reduce inequality, while growth increases it"), I can't figure out what the actual point of the book is. Piketty certainly doesn't clearly state his theory in the first 400 or so pages. If it's about inequality caused by inherited capital, Piketty only supports this claim in the historical era (Jane Austen/Balzac/etc). He says very little about the present. He also seems unaware that there is a world outside of the US, UK and France (and maybe also Sweden+Germany). That's quite a strange omission given that the vast majority of inequality in the world is not within the west, but between the west and the rest. (As I mentioned, I'm only halfway through, so feel free to correct me if the rest of the book is different.)
    • vanderZwan 12y ago
      > He also seems unaware that there is a world outside of the US, UK and France (and maybe also Sweden+Germany). I'm not even halfway into the book, but he apologises for this at the beginning, especially the focus on France, and gives justifications for this. Simply put, he doesn't have data (yet) for most of the rest of the world. France gets extra attention because it is the country for which he has the most and oldest data, and has had less drastic changes compared to the US, which has grown two orders of magnitude in population in the same time.
      • yummyfajitas 12y ago
        That's a perfectly valid reason for leaving Asia/Africa out of the 200-year long timeseries. Nevertheless, a discussion of inequality which doesn't even acknowledge the vast gaps between a Yank/Frenchy/Brit and an Indian/Chinese/Nigerian is woefully incomplete almost to the point of dishonesty. (I say "almost" because I've met enough ignorant westerners to realize that dishonesty is not the only explanation for this. I don't understand it myself, but some people's vision truly does stop at the border. )
        • 12y ago
  • mseebach 12y ago
    > struck my as the establishment trying to downplay the importance of this book > the elites are freaking out It's a good thing we have things like science and open discourse then. Then we can stop "freaking out" over peoples ulterior motives and consider their arguments and the evidence they present supporting their arguments. We can even be open about our motives and ideology driving this, because it's the evidence that counts. If you discount evidence leveraged against the conclusions of the book because you mistrust the motivation behind giving the evidence, the corollary is that you accept the conclusion of the book, not on the back of the evidence but because you agree with the (supposed) motivation behind reaching those conclusions.
    • wonderzombie 12y ago
      If you discount evidence ... That's reductive. Not everyone has the bandwidth to sort through every iota of evidence. And the fact is that there's no shortage of people who have little in arguing in good faith. So people resort to heuristics such as reputation, credibility, what other "reputable" people say, etc.
• mjn 12y ago
  If you want the "more than a nutshell, but less than a book" version, Piketty & co have two journal articles that cover the main historical data analysis in the book: http://gabriel-zucman.eu/files/PikettyZucman2014QJE.pdf http://gabriel-zucman.eu/files/PikettyZucman2014QJE.pdf http://gabriel-zucman.eu/files/PikettyZucman2014HID.pdf http://gabriel-zucman.eu/files/PikettyZucman2014HID.pdf
• jokoon 12y ago
  "Insanity: doing the same thing over and over again and expecting different results."
• nrao123 12y ago
  3 Points about the the latest Piketty book: ======================== 1) Churn in Inequality: ======================== 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year 39 percent of Americans will spend a year in the top 5 percent of the income distribution 56 percent will find themselves in the top 10 percent 73 percent will spend a year in the top 20 percent Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60 Half of those who earned over $1 million a year did so just once during this period (1999 and 2007), while only 6 percent reported millionaire status across all nine years Data analyzed by the I.R.S. showed similar findings with respect to the top 400 taxpayers between 1992 and 2009. While 73 percent of people who made the list did so once during this period, only 2 percent of them were on the list for 10 or more years. via: http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-t... ========================================================= 2) How much is the inequality being driven by Technology? ========================================================= Sam Altman @YC: http://blog.samaltman.com/technology-and-wealth-inequality http://blog.samaltman.com/technology-and-wealth-inequality Albert Wenger @ USV : http://continuations.com/post/52302452621/internet-and-income-inequality-we-need-to-think-ahead http://continuations.com/post/52302452621/internet-and-incom... ========================================================= 3) How much of this technology led inequality is transistionary? =========================================================== Innovation has brought great benefits to humanity. Nobody in their right mind would want to return to the world of handloom weavers. But the benefits of technological progress are unevenly distributed, especially in the early stages of each new wave, and it is up to governments to spread them. In the 19th century it took the threat of revolution to bring about progressive reforms. Today’s governments would do well to start making the changes needed before their people get angry. Via: http://www.economist.com/node/21594298/print http://www.economist.com/node/21594298/print
  • Victor_Silver 12y ago
    Income isn't the issue and this is why income shouldn't be taxed. Rather, savings should be taxed.
• Tycho 12y ago
  N.N. Taleb has been seriously slamming this guy recently. I wonder if Picketty will respond http://www.fooledbyrandomness.com/notebook.htm http://www.fooledbyrandomness.com/notebook.htm
  • crayola 12y ago
    Taleb seems to be engaged in two vendettas (as is clear from reading the Black Swan): first, economists; second, the French. One would therefore be well advised to take his notes about the work of a French economist with a pinch of salt. "The optimal strategy is to go become an academic or a French-style civil servant, the anti-wealth generators." To pick but one example among many others, Louis Pasteur was French, an academic and (therefore) a civil servant, and arguably contributed to save many lives. Or does that not qualify as wealth generation?
    • yummyfajitas 12y ago
      Taleb backs up his argument with careful math - is the math right or wrong?
      • crayola 12y ago
        Yes the maths are likely right, but that does mean Taleb is being fair to Piketty. Economics is not just about the maths, it's about whether the maths being proposed (i.e. the model) are the right tool to understand and explain the observed data (and do predictions / counterfactuals). So the question of interest (is Piketty right or wrong) is not a question of someone's "maths" (either Piketty's or Taleb) being "right" or "wrong". Sorry if you find this obvious -- perhaps I missed the point of your question?
      • notacoward 12y ago
        I don't agree that Taleb's math is any more careful than Piketty's. He has his own set of "fat tail" hobby horses to ride, and does a poor job showing how they apply here. The question should not be whether Taleb's math is right or wrong, since it could be right but irrelevant. The question is whether Piketty's math is right or wrong. Neither Taleb, nor Brooks, nor many here, seem to be addressing that.
• soneca 12y ago
  A more complete analysis by Solow: Thomas Piketty Is Right: Everything you need to know about 'Capital in the Twenty-First Century' http://www.newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed http://www.newrepublic.com/article/117429/capital-twenty-fir...
• lmg643 12y ago
  i think a lot of people miss the joke about why piketty is so popular. it's not the theorizing about the cause of inequality, which seems fairly obvious if you read financial news and blogs. the "novel" piece - at least in polite conversation - is that his solution to the problem is a wealth tax, which goes after assets instead of income. (i say polite conversation, since wealth taxes normally apply in cases where there is a sovereign liquidity crisis, which is not a polite situation.) so, we think the wealth tax this sounds like a great idea, let's go after the billions that accrued in offshore hedge funds for US citizens and take 30%, sounds fair since it avoided taxes in the first place. of course, when it comes time to implement the tax, that money is gone, perhaps to some other jurisdiction, and they settle for enforcement by having the average joe write a check based on money in your bank or brokerage account, whatever meager amount over $100k you may have. and, probably convert 401ks into a myRA account, which gives the government a new forced buyer of treasury securities, while pretending it was for some other reason.
  • chrisgd 12y ago
    I disagree. I think the popularity is stemming from this quote "But his real beef is with the mainstream economic teachings that more capital and lower taxes on capital bring faster growth and higher wages, and that economic dynamism will automatically keep inequality at bay." He is basically using mainstream economics techniques to prove that mainstream economic ideas, especially those centered around free-trade and low taxes to chase growth maximize inequality, they don't minimize them. Everyone who has had problems with the teaching of mainstream economics as a means to lessen inequality now have more evidence.
    • zo1 12y ago
      "Everyone who has had problems with the teaching of mainstream economics as a means to lessen inequality now have more evidence." So when I read most of the articles regarding this book, all I can picture is a slew of angry mob-like people shouting: Those pesky economists must be wrong! This guy is saying stuff we all like to hear, therefore he is correct! Indeed, the public is fickle, and will naturally gravitate to what feels good and re-affirms what they feel is true. There has been a growing mistrust of intellectuals of late, and it's because people are dissatisfied. Intellectuals have been losing the media war with the government.