Eduardo Porter picks up on the fashion book of the week, Thomas Piketty's Capital in the 21st Century. The punchline, which Porter accurately conveys, is that we are on a path of ever greater concentration of wealth and income. Piketty's isn't happy about this and recommends wealth and inheritance taxes as remedies, but since these taxes don't sound very likely, the picture looks pretty bleak.

While the book has much useful information and is well worth reading, folks can feel justified in taking its conclusion with more than a grain of salt. There is a lot about the determinism that doesn't seem quite so determined. For example, the greater concentration of income is most apparent in the U.S. and U.K.. There is nothing really to talk about in the case of France, not too much in the case in Germany, and pretty much zero in Sweden if we pull out the 70s when there was a sharp reduction in the concentration of income.

Much of the concentration of income hinges on policies that could easily be altered without overturning capitalism. For example, shorter and less stringent patent protection would go far towards reducing the concentration of income as would a return to the old fashioned view that monopolies like cable companies and Internet providers should be subject to regulation. (This is the topic of my book, The End of Loser Liberalism: Making Markets Progressive.)

I have a longer list of items in my review of the book. I won't repeat everything here, but I will just say that anyone who gives Bill Gates credit for inventing the mouse can reasonably be accused of paying insufficient attention to institutional detail. I will also add that the figure accompanying the Porter piece, which projects [mistakenly] the ratio of private capital to income through the year 3000 certainly looks a bit overly deterministic.

 

Note: corrections made, thanks TK421.

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