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Catch up with new book launches - After Piketty

- The GST Na­tion

- The Bro­ken Lad­der

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.

Mar­shall Stein­baum

J Brad­ford DeLong

Heather Boushey

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