Capital In the 21st Century: A Review

malikane, christopher (2015): Capital In the 21st Century: A Review.

Abstract

This paper reviews Thomas Piketty's Capital in the Twenty-First Century. Piketty's Capital seeks to bring the issue of inequality back to the centre of social analysis and to encourage discussion about the evolution of wealth and inequality with a view to inform policy. The book uses data stretching as far back as the 1700's. The main thesis of the book is that capitalism automatically generates inequality and wealth concentration since the rate of return on capital always exceeds the growth rate of income. To resolve this problem, the book proposes a progressive tax on wealth and income. I show that Piketty's book is based on a misunderstanding of classical political economy, particularly Marx. Piketty's view of the development and phases of capitalism is inadequate. His tax proposals, though progressive, will not resolve the inequality problem. Lastly, his conclusion that modern economic growth made it possible to avoid the Marxist apocalypse is not borne out by his data.

• Item Type: MPRA Paper
• Language: English
• Keywords: Capital, inequality, wealth concentration, falling rate of profit.
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B14 - Socialist ; Marxist; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B16 - Quantitative and Mathematical; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; P - Economic Systems > P1 - Capitalist Systems; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P26 - Political Economy ; Property Rights

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