Thomas Piketty has learned a thing or two about cap­i­tal­ism

In a col­lec­tion of pre­vi­ously pub­lished work, the celebrity econ­o­mist ar­gues for tax­ing the rich and res­cu­ing the EU. By Peter Coy

Bloomberg Businessweek (Asia) - - CONTENT -

Thomas Piketty’s Why Save the Bankers? is the per­fect ac­cou­trement for a Bernie San­ders rally. At 210 pages, it’s eas­ier to carry through a crowd than the econ­o­mist’s 685-page best-seller of two years ago, Cap­i­tal in the Twenty-First Cen­tury. Its ti­tle sig­nals that it’s more iras­ci­ble than the rather aca­demic Cap­i­tal, too, and more like San­ders when he’s on a roll: Why save the bankers, in­deed?

Read­ing your copy of Why Save the Bankers? (Houghton Mif­flin Har­court, $26) is op­tional, of course. There’s cir­cum­stan­tial ev­i­dence from Kin­dle that few buy­ers of Cap­i­tal made it past the in­tro. What you’ll find if you do dip in is a col­lec­tion of 48 short pieces— the sub­ti­tle is And Other Es­says on Our Eco­nomic and Po­lit­i­cal Cri­sis— orig­i­nally pub­lished in Libéra­tion, the cen­ter-left French news­pa­per. The top­ics range from Piketty’s hopes for Pres­i­dent-elect Obama, to the Greek fi­nan­cial cri­sis, to whether the sin­gle­cur­rency euro zone can hang to­gether. (Lots on that last topic, ac­tu­ally.) Some es­says have ital­i­cized pref­aces for the ben­e­fit of Amer­i­can read­ers who may not re­mem­ber ev­ery de­tail of, say, the Lil­iane Bet­ten­court af­fair.

For read­ers of English, Piketty’s pub­li­ca­tion sched­ule is run­ning back­ward. First came Cap­i­tal, a heavy-duty book that forced peo­ple to wres­tle with the im­pli­ca­tions of wealth in­equal­ity of “r>g” (don’t ask). Last year, af­ter Cap­i­tal’s sur­pris­ing suc­cess, came the slightly more ac­ces­si­ble The Eco­nom­ics of In­equal­ity, which had pre­ceded Cap­i­tal in the French mar­ket. And now the jour­nal­is­tic Why Save the Bankers?, which uses col­umns span­ning al­most eight years, from 2008 to 2015.

Econ­o­mists are still ar­gu­ing over the data and con­clu­sions of Cap­i­tal, the book that vaulted Piketty to fame. In March, three au­thors from the Fed­eral Re­serve Board staff and one from the Univer­sity of Penn­syl­va­nia pre­sented a pa­per at the Brook­ings In­sti­tu­tion say­ing that things aren’t as bad as he and oth­ers have made out. Wealth and in­come con­cen­tra­tion at the top, they wrote, has risen by half as much in re­cent years as Piketty and two other French econ­o­mists, Em­manuel Saez and Gabriel Zuc­man, es­ti­mated they would.

But even if you dis­count half of what Piketty claims, there’s plenty for the 99 Per­cent to be mad about. He of­fers a so­lu­tion in one es­say: “Taxes are the only weapon that can put a stop to the in­sane ex­plo­sion of very high pay.” As a colum­nist, Piketty is in roughly the same camp as Paul Krug­man, the lib­eral No­bel lau­re­ate econ­o­mist who writes for the New York Times. Piketty is less snarky and j okey, though; slightly fur­ther to the left; and more given to grand pro­nounce­ments such as “Left to it­self, cap­i­tal­ism, be­cause it is pro­foundly in­sta­ble and ine­gal­i­tar­ian, leads nat­u­rally to catas­tro­phes.” An­other dif­fer­ence is that Piketty oc­ca­sion­ally ex­pli­cates some com­pli­cated eco­nomic topic—like how to struc­ture So­cial Se­cu­rity taxes—that Krug­man would be likely to shunt off to his blog and la­bel “wonk­ish.”

It ap­pears that Piketty and his pub­lish­ers are re­pur­pos­ing old ma­te­rial to profit from his world­wide fame. There’s noth­ing g wrong with that. In fact, it demon­strates that he’s learned a lot aboutout cap­i­tal­ism in his recherches— in­clud­ing ding how to ex­ploit its won­der­ful wealth­pro­duc­ing po­ten­tial. <BW>


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