If you care about Piketty and his 900 page book on capital you should go read a review from someone who actually knows what they’re talking about. (Good luck with that. There are hundreds.)
If you don’t care about Piketty and his views on income inequality you should not read the rest of this post because that’s what it’s about.
(If you don’t fit into either one of the above two categories, you don’t fit into my black and white worldview and I don’t know what to make of you.)
So I read Branco Milankovic’s 20 page review of Piketty’s book “Capital in the 21st Century”, the wonderful How To Write a Thomas Piketty Think Piece in 10 Easy Steps, Piketty on Piketty on Vox, and lots of tweets and headlines that said smart things about Piketty. These are my conclusions:
- Capital = wealth = assets, real estate, stocks, machinery, businesses etc.
- Wealth to income ratio is growing, which means that wealth is being concentrated in the hands of very few, and it’s becoming more important to hold on to wealth (inheritance etc.) than have a high income. In other words, it’s more worthwhile financially to marry a rich heir than get a good job.
- Post WWII, when wealth-to-income ratio, was low was an anomaly and can’t be duplicated. It was because of really high growth rates, which an economy can’t sustain forever. Younger economies (China, India) may go through a period of low wealth-to-income ratios (or not, because the economy is more interconnected now) but will then end up in the same place as the US and Europe today.
- We need global tax laws on wealth and inheritance if we want to stop the concentration of wealth. It will only work if there is global agreement because otherwise there will always be tax havens.
Tl;dr (which mean you couldn’t be bothered to read my 3 line review of the 20 page review of the 900 page book): Wealth inequality is the new income inequality.