Picking Piketty Apart (1)

I have been reading Capital in the Twenty-First Century by Thomas Piketty. This book is currently causing a stir in economic circles. Piketty’s timing is perfect. The Occupy Movement sparked interest in the top one percent. He has statistics to support their concerns.

The book is 600 pages long and quite a hard read. It is packed with statistical information and covers many countries and three centuries of history. I suspect that more people have written articles about it than have actually read it.

I felt that he rambled on a times. He gives his first economic law on page 55, but does not get to his second one until p.130. There is a stack of statistics in between. He does not put the two laws together until p.199.

Every now and then a new book on Economics makes a big splash, claiming to be the next big thing, equivalent to Smith’s Wealth of Nations, Marx’s Capital or Keynes Treatise. I remember back in 1973, when I was studying economics, a book by Joan Robinson and Eatwell was published. Everyone raved about it, claiming that it represented a new paradigm in economics. However, it was quickly forgotten and is only available second hand on Amazon.

I suspect that Piketty will fair better. There will be continuing debate about his theoretical approach, his predictions for the future and his policy recommendations. However, the comprehensive statistical information about income distribution that he has unearthed is hard to argue with. Economic theories will have to be adjusted to deal the statistical information he has provided.