Capital in the Twenty-First Century

Thomas Piketty Capital in 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 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 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 American Mind (1987). Agree with them or not, they became best-sellers and, though many of purchasers may not have actually read them, they did attract attention of countless critics and raised debates among innumerable media pundits and public intellectuals taking sides on 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 public's fancy and, in 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 era before Internet.In any case, it is clear that Piketty's book has not only become a major international cultural phenomenon, but that it has potential to be around for a while, stirring up contrarian thinking on all sides of question of what is happening with or, perhaps, to economy.Brought down to its simplest elements, Capital in 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 ambition, nor breadth and depth or revolutionary zeal of 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 twenty-second century with anything close to passionate or even antiquarian interest that Marx's magnum opus attracts even today in what some people wistfully imagine to be post-Marxist era.That said, Piketty has not authored a minor, superficial, or insignificant book. Someone, of course, had to take up challenge of rehearsing Marx's project at roughly this time (about a century after his ideas inspired first successful revolution that bore his name), and this effort is certainly a meritorious attempt to fill need. It comes, of course, after collapse of Union of Soviet Socialist Republics and morphing of former Red China into a previously unexpected and currently dominant instance of an authoritarian style of Asiatic capitalism. It also steps up just as late of liberal democracies in 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 1930s to 1970s, academic field of economics, government economic policy and standard practices of private sector were dominated by John Maynard Keynes and his erstwhile associates and followers. Keynes and Keynesianism became popular as a consequence of allegedly Great Depression. Most of intelligent and attentive public-whether formally trained economists or merely casual readers of business pages of substantial newspapers and current affairs magazines-grasped elements of Keynes' theory.Put simplistically, Keynes advocated relatively severe taxes in good times (the top marginal rate of personal taxation exceeded 90% during Eisenhower administration in United States) and endorsed considerable public spending in bad times. The idea was to flatten out 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 financiers, merchants and manufacturers of day feared, precipitate collapse of capitalism that Marx had cheerfully predicted. …

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