Tuesday, June 10, 2014

Thomas Piketty: Capital in the Twenty-First Century

Date: 07/2014

Title: "Capital in the Twenty-First Century"

Author: Thomas Piketty

Duration: 25 hrs and 3 mins

Review: The gist: What we think of as normal economic order, the economics of the period between 1950 and 1990 was an anomaly. The shocks of the two world wars of the 20th century basically leveled the playing field (lessened inequality) and made old money not nearly as important as it always had been previously, and, according to Picketty, will resume being starting at about the year 2000 (indeed, has already resumed being). Basically, inheritances will resume their role as the primary resting place for wealth, vast stashes of capital will once again rule the land, and extreme inequality will once again become the norm.
Extreme inequality is neither natural nor accidental and can only be addressed by intense state intervention in the form of a global tax on capital and a progressive income tax. He argues that allowing extreme inequality, particularly because vast stashes of capital just generate more wealth on their own, threatens democracy by undermining its core value, meritocracy.  Rich people get richer just by virtue of having tons of capital that generates wealth on its own, disconnected from the individual effort and ability of the owner.

I liked this book a lot.