A 700-page tome about inequality by a French economist has become a blockbuster hit on Amazon, outselling Game of Thrones, two versions of Disney’s “Frozen,” and the “10-Day Green Smoothie Cleanse.”
Thomas Piketty’s “Capital in the 21st Century” soared to the top of the Amazon bestseller list this week as public anxiety about inequality in the U.S. has reached a new cultural zeitgeist.
Piketty’s book first received a warm reception from fellow economists and policy wonks, who praised his command of empirical evidence and helped fuel early interest in the book. But his basic argument is easy enough for anyone to grasp. Examining decades of tax return data, he concludes that inequality is the inevitable outcome of capitalism.
According to Piketty, it’s because the rate of return on “capital”—which he broadly defines as wealth including financial assets, property, and so forth—is greater than the rate of economic growth. So those who have wealth will become even wealthier, while the rest will continue to fall further behind.
As a result, Piketty says, the inheritance of wealth (or lack thereof) will ultimately determines one’s fate far more than any income earned over a lifetime. Goodbye meritocracy; hello Ancien Regime.
Within economist circles, Piketty had already gained considerable renown for his earlier work on inequality. But his new book’s sweeping argument has resonated in a country still struggling to recover from the aftermath of the Great Recession. While the U.S. stock market and home prices have rebounded—benefitting those who have already accumulated wealth—stagnant wages and a weak labor market have continued to hold back many ordinary Americans.
“The broad theme of inequality has been widely discussed by many people, including President Obama. But no one before Piketty put income and wealth inequality into a single package, set them in the context of the broader history of capitalism, and suggested that we are rapidly heading to a place where many people don't want to wind up,” says Arthur Goldhammer, who translated “Capital” into English.
Piketty believes there are ways to fix the problem, however. His book advocates for a global tax on wealth to redistribute the gains—an idea unlikely to come to fruition any time soon. Some conservatives have seized upon that proposal to dismiss Piketty’s book out of hand. But it’s more of an appendage to Piketty’s main argument, as there’s still broad disagreement about what can be done to alleviate economic inequality.
“Piketty might appear somewhat dismissive of a wide range of policies to reverse inequality, from ending To Big to Fail subsidies for large banks and taxing financial transactions to raising the minimum wage, but I don't see that conclusion from following from his work,” says Dean Baker, an economist at the Center for Economic and Policy Research. “My hope is that people will see the Piketty thesis as a reason to redouble efforts to reverse trends in inequality.”