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Getting a good start on reading Piketty's Capital in the Twenty-First Century

Front of book "Capital in the Twenty-First Century," by Thomas Piketty
Photo from Harvard University Press web page

Thomas Piketty's book is all the rage. Who would have thought a 577 page treatise on economics, 655 pages counting the notes, would make the best seller lists. Certainly the publisher, Harvard University Press, was caught by surprise, as the book quickly sold out forcing additional hurried printings to the market. Six printings of the English translation of this book - two each in the United States, England and India were quickly scheduled. The book was originally written and published in French. Piketty is a French economist who teaches in Paris.

The English title of the book is well chosen for sales, "Capital in the Twenty-First Century," as it brings up visions of Marx and his Das Kapital. And Karl Marx is mentioned right up in the beginning of Piketty's introduction. But probably the only thing in common that Piketty has with Marx is that they both wished to explore the role of capital in a capitalist market economy. But the connection to Marx, the ultimate critic of the Capitalist system, doesn't hurt to heighten interest in the book, especially in these times of heightened and growing inequalities of income and wealth in many countries of the world, including, and especially, in the United States.

While book is expected to sell upwards of 200,000 copies, one wonders how many of those copies will actually be read. But it deserves to be read. It has a literary quality to it, this in spite of the many graphs and tables of data. Early on in the book one encounters an algebraic expression and a reference to "The First Fundamental Law of Capitalism: α=r x β," but don't let this throw you. I think it is unfortunate that Piketty refers to a 'law' here, but after all he is an economist. All Piketty is really saying with this expression is that the share of a nation's income (he is calling this α) that goes to the owners of capital is by, definition, equal to the rate of return to capital (r) times the total amount of capital (K) that is owned [r times K is the income that goes to owners of capital as a group], divided by total income of the nation.

Keep that in mind as you read the book, as Piketty takes you for a ride showing you measures of capital, rates of return on capital and capital's share of income through history and across multiple countries. And that is just part of the book, parts one and two really. I confess, I have yet to read the whole book. After all it is a long book. In subsequent parts of the book, Piketty gets into inequality of wealth and income in multiple countries. In the latter part of the book, Piketty gets into proposals about limiting inequalities.

When I put down the book for the day or evening, I can't wait to eagerly pick it up next. It is that kind of book.

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