“After Piketty: The Agenda for Economics and Inequality”, edited by Heather Boushey, J. Bradford DeLong, and Marshall Steinbaum, for Harvard University Press, is a gigantic compendium of academic reaction to Thomas Piketty’s 2014 missive, “Capital in the Twenty-First Century” (“C21”).
The book comprises four sections (“Reception”, “Conceptions of Capital”, “Dimensions of Inequality”, and “The Political Economy of Capital and Capitalism”), splitting into twenty-one chapters, after which Piketty responds with a Chapter 22, “Toward a Reconciliation between Economics and the Social Sciences”.
You really need the physical hardcover to follow this book; it’s a bit overwhelming on Kindle.
The editors start with an Introduction where they summarize Piketty’s basic claims: social democracy became more generous with the disadvantaged right after the Great Depression and WWII, but generally the trend is toward greater inequality as was the case in the “Gilded Age”. Underneath income inequality lies wealth inequality, which tends to drive divergence in incomes.
A Chapter One by Arthur Goldhammer, “The Piketty Phenomenon” notes that Piketty’s book sold unusually well to the general public for a non-fiction academic text. Maybe this would become a lesson for me on how to sell my own authored books!
The various chapters often refer to actuarial calculus (reproducing some mathematical derivations (even partial differential equations) and proofs) and refer to the basic inequality “ r > g” (average return on capital exceeds growth rate). At then Piketty himself refers specifically to David Gerwal’s chapters and the “two fundamental laws of captitalism”, regarding the derivation of capital share, and the way the capital / income ratio follows the savings rate over growth rate.
But it is the socially descriptive material, and the bearings of such on personal morality, that occasionally grab attention. Piketty, some authors say, has no explicit theory of human capital (or social capital the way Charles Murray would talk about it). But generational wealth gives some kids advantages, including those who (like me) grow up childless. The advantages include greater financial stability when young (less need to go into debt), and very likely parents who have helped train them in the abstract thinking that is necessary for personal success in modern civilization. The quality of public education associated with class and particularly race becomes relevant.
Capitalism, by definition, implies that wealth accumulates on its own beyond the actual work done by the asset owner, so it implies also using (or “exploiting”) the labor of others. That implies also rent seeking, which tends to impose rules on workers who haven’t accumulated enough of their own capital to own their own lives. No wonder, various forms of socialism and communism developed (even ideas about the moral nature of some kind of “New Man”) evolved over decades in the past two centuries especially. I can remember the angry rhetoric, especially from women, when spying on meetings of the “People’s Party of New Jersey” in the early 1970s., like “why do we have to have capitalism”, along with proposals to limit maximum income to $50000 a year (income equality by racing to the bottom). Sometimes threats of expropriation by force would evolve, as with the Patty Hearst case (Jeffrey Toobin’s book, Nov. 9, 2016, ironically reviewed by me right after Trump’s election). Left wing terror preceded and sometimes went along with radical Islamic terror.
The book does get into sensitive ideas like personal complacency, along the lines of the usual rationalization (short of a canard) that ego-related inequality is necessary for innovation, even if it can undermine sustainability and stability. Indeed, lifelong accumulated savings (and some of it inherited) allowed me to become an independent journalist without the need for my own writing to pay its own way, which others may see as destructive or unfair. I consistently refused to become someone else’s huckster, even as I understand the pressure on many people to join up and recruit others to buy from them.
Likewise the authors take up the issue of voice. Wealthier people are able to influence politicians to meet their needs, whereas the less well-off are recruited into solidarity by others who do not respect their ability to think for themselves. Even Donald Trump bragged to his base, “I am your voice.” I resent the idea that anyone else claims to be my voice.
|Editors:||Heather Boushey, J. Bradford DeLong, and Marshall Steinbaum|
|Title, Subtitle:||“After Piketty: The Agenda for Economics and Inequality”|
|ISBN||978-06745-0477-6 hardcover and Kindle|
|Publication:||Cambdrige and London; Harvard University Press, Introduction and 21 chapters in 4 sections, with a Chapter 22 reply by Piketty|
(Posted: Saturday, October 28, 2017, at 6 PM EDT)