I saw the author interviewed on Charlie Rose and downloaded the audiobook and am into it now.
It all boils down to:
He argues that when the rate of growth is low then wealth tends to accumulate more quickly from [profits] than from labor, and tends to accumulate more among the top decile and centile, increasing inequality.
Pretty good book, so far. Basically, it's a qualified economist saying what everyone already knew intuitively. He looked at hundreds of years of data, and a century of tax returns, for multiple countries.
The main problem is that world population growth has mostly leveled out, especially in the West. So whether that's from peak oil or it was a bubonic plague or whatever the reason, it doesn't matter, but rather capitalism in an environment of no population growth means that capital will just continue to accumulate and inequality will explode and get worse and worse.
And the only thing that broke the last cycle like this was the Great Depression and world wars, and it was really the wars that did it.
I used to think maybe globalism and offshoring and automation / extreme efficiency were the root problem, but so far where I'm at in the book, that's disproven. Actually, all the Western countries have as much money coming in as they do going out.
So it's not really the offshoring and trade deals, that are the problem.
It's latter cycle capitalism itself, in an environment of minimal population growth. This could be corrected with fiscal policy, it doesn't have to be this way just because the population has leveled out, it's just that it requires some action to correct or the *rich will just eat us all alive* if it goes on how it is.
The author says the data show that the world's rich are increasing wealth at three times GDP growth. So that means they aren't growing the pie, as all the conservatives say, *they are eating ever more of the pie and will devour it all*.
So it's a math thing guys. Conservatives really are wrong about it. The math and numbers show that the pie is not growing, at the rate at which the super rich are eating it, that's just the fact.
The wiki article may give a better summary of the book than I can:
Capital in the Twenty-First Century is a book by French economist Thomas Piketty. It focuses on wealth and income inequality in Europe and the US since the 18th century. It was initially published in French in 2013, with an English translation released in April 2014. The central thesis is that wealth will concentrate if the rate of return on capital (r) is greater than the rate of economic growth (g).
Over the long term, Piketty argues, this will lead to the concentration of wealth and economic instability. Piketty proposes a global system of progressive wealth taxes to help create greater equality and avoid the vast majority of wealth coming under the control of a tiny minority.
Piketty bases his argument on a formula that relates the rate of return on capital (r) to the rate of economic growth (g), where r includes profits, dividends, interest, rents and other income from capital; and g is measured in income or output. He argues that when the rate of growth is low then wealth tends to accumulate more quickly from r than from labor, and tends to accumulate more among the top decile and centile, increasing inequality.
Thus the fundamental force for divergence and greater wealth inequality can be summed up in the inequality r > g. He analyzes inheritance from the perspective of the same formula.
The book argues that there was a trend towards higher inequality which was reversed between 1930 and 1975 due to some rather unique circumstances: the two World Wars, the Great Depression and a debt-fueled recession destroyed much wealth, particularly that owned by the elite.
These events prompted governments to undertake steps towards redistributing income and the fast economic growth meant that inherited wealth had its importance reduced.
The book argues that the world is returning towards "patrimonial capitalism", in which much of the economy is dominated by inherited wealth and that their power is increasing, creating an oligarchy.
Nobel prize-winning economist Paul Krugman called the book a "magnificent, sweeping meditation on inequality" and "the most important economics book of the year — and maybe of the decade." He distinguishes the book from other bestsellers on economics as it constitutes "serious, discourse-changing scholarship."
Steven Pearlstein called it a "triumph of economic history over the theoretical, mathematical modeling that has come to dominate the economics profession in recent years", but also added, "Piketty’s analysis of the past is more impressive than his predictions for the future are convincing."
Branko Milanović, a former senior economist at the World Bank, called the book “one of the watershed books in economic thinking.”
British historian Andrew Hussey called the book "epic" and "groundbreaking" and argues that it proves "scientifically" the Occupy movement was correct in its assertion that "capitalism isn't working."
According to Nobel prize-winning economist Robert Solow, Piketty has made a "new and powerful contribution to an old topic: as long as the rate of return exceeds the rate of growth, the income and wealth of the rich will grow faster than the typical income from work".
French historian and political scientist Emmanuel Todd called Capital in the Twenty-First Century a "masterpiece" and "a seminal book on the economic and social evolution of the planet".
Ryan Cooper writing in The Week described the book as a "brilliant, surprisingly readable work that synthesizes a staggering amount of careful research to make the case that income inequality is no accident." He also notes that "If Piketty is correct, he has laid the intellectual groundwork for a resurgence of American socialism."
The book has been described as “a political and theoretical bulldozer” in the French press.
The Economist wrote, "a modern surge in inequality has new economists wondering, as Marx and Ricardo did, which forces may be stopping the fruits of capitalism from being more widely distributed. 'Capital in the Twenty-First Century' ... is an authoritative guide to the question."
Will Hutton wrote, "Like Friedman, Piketty is a man for the times. For 1970s anxieties about inflation substitute today's concerns about the emergence of the plutocratic rich and their impact on economy and society. Piketty is in no doubt ... that the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism. He has proved it."