Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capitalism in the Twenty First Century

Измеренный, безмерный, преувеличенный и безосновательный пессимизм: о книге "Капитализм в XXI веке" Томаса Пикетти

McCloskey, Deirdre Nansen (Макклоски, Дейдра Нансен) ()
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McCloskey, Deirdre Nansen (Макклоски, Дейдра Нансен): University of Illinois at Chicago; Institute for Advanced Sustainability Studies, Potsdam, Germany

Ekonomicheskaya Politika / Economic Policy, 2016, vol. 4, 153-195

Abstract: Thomas Piketty has wrote a serious empirical work on economic history. The central thesis of the work is that the force of interest on inherited wealth causes inequality of the income earned from the wealth to increase in inevitable and stable manner. The author has collected and presented a huge bulk of empirical data. But despite all its advantages the book contains many serious flaws. In fact its own data suggest that the inequality of income has increased much only in a few countries and only recently. Moreover, all the way a steady share of rich people constantly have been dropping out of riches or coming into them, in evolutionary fashion. Piketty does not see the key role of entry of new entrepreneurs into the markets and their exit from them while this is the key to understanding of the process of market-tested betterment that has made the poor rich. Piketty’s definition of wealth does not include human capital, owned by the workers. The fundamental ethical problem in the book, is that Piketty has not reflected on the ethical relevance of equality as such and in comparison with raising of the poor. It is the latter notion that is ethically relevant from the point of view of their human dignity. If income is correctly measured the real income of the poor has risen in sustained way from 1800 because of rising productivity, and consumption of basic necessities is very much more equally enjoyed nowadays

Keywords: Thomas Piketty; capital; inequality; income redistribution; long-term economic growth; innovation driven growth (search for similar items in EconPapers)
JEL-codes: B51 N30 O43 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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