From Locke versus Rousseau to the Present
New Thinking in Political Economy series
Chapter 13: Thomas Piketty: the Apotheosis of Rousseau and the French Revolution
Thomas Piketty (born 1971) is a French economist. He published a highly influential book, Capital in the Twenty-First Century (Piketty 2014) and a follow-up article “About Capital in the Twenty-First Century,” American Economic Review (Piketty 2015). He has served as an advisor to the French Socialist Party. Inequality is bad and there are no justifiable reasons for it! We need to return to the principles of 1789 France to achieve a just social order. When we do find income equality, it is due to shocks and wars and is not the result of a rational or evolutionary or spontaneous economic process. Although there has been a “compression of inequalities” it is due mainly to “the diffusion of knowledge and investment in training and skills.” Nevertheless, “there are a set of divergences associated with the process of accumulation and concentration of wealth when growth is weak and the return on capital is high.” This “represents the principal threat to an equal distribution of wealth in the long run” (Piketty 2014, p._23). Piketty argues that the principal threat is the result of the fact that the annual rate of return on capital is greater than the rate of economic growth, r>g. “[I]nherited wealth grows faster than output and income” (Piketty 2014, p._260). This has nothing to do with market imperfection. In the first three parts of his book, Piketty analyzes the evolution of the distribution of wealth and the structure of inequality since the eighteenth century.
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