Thomas Piketty’s Capital in the Twenty-first Century – some critical commentaries

May 9, 2014

[“Capital in the Twenty-First Century”, a new book by French economist, Thomas Piketty, has taken the English language world of letters by storm. Built on painstaking research spanning more than a decade, Capital in the Twenty-First Century presents a a vivid picture on changes in wealth and income inequality since the Industrial Revolution. Using tax-returns data, Piketty shows that concentration of wealth and inequality is the norm under capitalism. It was only because of the massive disruption of the logic of capital accumulation caused by the two World Wars and the Great Depression, that this trend was reversed for a few decades (from the 1950s to the mid-1970s). A run of the neoliberal era – ushered in by Thatcher and Reagan – for three decades has brought concentrations of income and wealth back to “normal” capitalist levels, i.e., levels associated with the Gilded Age. Piketty ends his 685 page tome with a proposal for a global wealth tax to curb the deleterious effects of inequality on democracy.

While Piketty’s work is an example in the best traditions of empirical analysis and is progressive in its policy recommendations, it suffers from serious theoretical problems. Its engagement with an older and more robust tradition of political economy is at best flimsy. It suffers from severe theoretical problems that comes with the neoclassical framework that Piketty uses. Here we collect together few commentaries that offer a left critique of Capital in the Twenty-First Century. – Eds]

1. Charles Andrew’s review highlights how leftists might use the wealth of data that Piketty’s work offers but must return to a Marxist framework if deeper insights about capitalism are sought.

2. James K. Galbraith points out the serious theoretical problems in Piketty’s work related to the understanding of “capital” and the not so sound policies that flow from his analyses.

3. An interview with Michael Hudson that highlights some of the crucial elements missing in Piketty’s analysis.

4. Thomas Palley’s friendly critique of Piketty’s work and reflections on academic economics.

5. Doug Henwood’s review discussing the book’s political problems.

6. John Cassidy summarizes the book in six charts.