Catch up with new book launches - After Piketty
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A group of economists and other social scientists tackle significant questions in dialogue with Thomas Piketty in this exciting, new book.
Thomas Piketty's Capital in the Twenty-First Century is the most widely discussed work of economics in recent history, selling millions of copies in dozens of languages. But are its analyses of inequality and economic growth on target? Where should researchers go from here in exploring the ideas Mr Piketty pushed to the forefront of global conversation? A group of economists and other social scientists tackle these questions in dialogue with Mr Piketty in After Piketty, in what is sure to be a much- debated book in its own right.
Mr Piketty's empirical observation is that inequality in the Western economies declined through the entire middle part of the 20th century. But from around 1980, it had started to increase again to return to the levels of the Gilded Age. His theoretical argument is that there is an inherent dynamic in the process of economic growth tending to increase inequality, a dynamic halted and reversed in the 20th century by the two cataclysmic world wars, by the post-war welfare State and social market economies (especially in Europe) and by rapid post-war growth. The key point he makes is that when the growth rate slows, the rate of return on capital falls more slowly, increasing the ratio of capital to income and further widening the gap. The mathematical expression at the heart of Mr Piketty's book is r > g. It says that the rate of return on capital, r, has historically been greater than g, the growth rate of the economy.
Yet, despite its 700-odd pages, Mr Piketty's book has given important details short shrift. The new book takes these lacunae in turn, pointing out, essay by essay, how Mr Piketty may have devoted more space to the role of human capital and technological change, the structure of the firm and the rise in outsourcing, sexual inequality, geography and so on. Gareth Jones, for example, argues that in Mr Piketty's book, geographical divisions are treated as containers for data, that is, the areas within which various statistical agencies do their work, rather than as arenas with changeable boundaries within which the rough-andtumble tussle between labour and capital plays out.
This new book opens with a discussion by Arthur Goldhammer, the book's translator, of the reasons for capital's phenomenal success, followed by the published reviews of Nobel laureates Paul Krugman and Robert Solow. The rest of the book is devoted to newly commissioned essays that interrogate Mr Piketty's arguments.
Suresh Naidu and other contributors ask whether Mr Piketty has said enough about power, slavery and the complex nature of capital. Mr Naidu suggests that r > g is not a theory to be disproved but a historical fact to be explained. He points out that the wealthy use their influence to shape laws and society in order to guarantee themselves a better return on their wealth.
Laura Tyson and Michael Spence consider the impact of technology on inequality. Heather Boushey, Branko Milanovic and others consider topics ranging from gender to trends in the global South. Emmanuel Saez lays out an agenda for future research on inequality, while a variety of essayists examine the book's implications for the social sciences more broadly. Mr Piketty replies to these questions in a substantial concluding chapter.
An indispensable inter-disciplinary work, this new book does not shy away from the seemingly intractable problems that made Mr Piketty's book so compelling for so many.
J Bradford DeLong