Book Review: Capital in the Twenty-First Century

Thursday 27 November 2014 by

Capital in the Twenty-First Century, Thomas Piketty, The Belknapp Press, BookCapital in the Twenty-First Century by Thomas Piketty

Published by The Belknap Press

What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyses a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality.

Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality – the tendency of returns on capital to exceed the rate of economic growth – today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again.

A work of extraordinary ambition, originality, and rigor, Capital in the Twenty-First Century reorients our understanding of economic history and confronts us with sobering lessons for today.

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I’m going to have to hold my hands up and admit that I didn’t finish reading Capital in the Twenty-First Century. At a whopping 577 pages (excluding its notes), this is no light bedtime read, and I simply couldn’t get to the end.

From a leading voice in the economic world, this book attempts to analyse the past to predict the future. This is not going to be the easiest read, especially if you aren’t particularly a fan of numbers. There’s a lot of information, facts, and statistics to take on board. But if you can work your way past it, Piketty has an interesting view on history and the future.

Piketty uses the economic patterns of the UK, USA, France, Germany, Japan and several other countries to predict cultural and social patterns since the eighteenth century. And for the most part, he gives a pretty accurate picture. He talks not only about politics, but literature, the impact of World War I (which changed the economic landscape forever), and the French revolution. This was the bit I enjoyed most, often skimming over the figures and percentages and tables to read about how the French revolution changed not only the economic landscape but the nature of French wealth, how the whole world was thrown in to disarray and debt during World War I (and has yet to recover), and how Marx wasn’t far off in his predictions, but he was perhaps a bit extreme.

Part of the Waterstones Book of the Year shortlist, I can see why it claimed a place; it is an interesting read (perhaps more interesting to those economically-minded), with some pretty bold statements, but it simply felt too dry for me. After twenty pages discussing the merits of 1% inflation, I had had enough. I was desperate for a more anecdotal approach, but Piketty sticks to the safe ground of facts and figures (which comes as no surprise), and it takes a lot of concentration to follow. Perhaps I should be more concerned with the state of the GDP (Piketty certainly seems to think so), but it all sails far above my head.

As an accessible read, I never felt that I was being left behind, but sometimes it felt like one of Russell Brand’s particularly effusive rants – rambling sentences with complex words and a few numbers thrown in to baffle. Several pages were read and re-read to fully understand them, and I found myself constantly flicking back and forth to look at the tables to reaffirm what I was reading.

It’s not often I post a bad review (if I don’t like a book, I simply won’t write about it), but I also feel that Capital in the Twenty-First Century doesn’t deserve an entirely negative one. This is probably a fabulous read for someone willing to dedicate the time to it, and who has a basic grasp of economics. Sadly, it’s not my winner.

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