In 2014, an unusual book topped bestseller lists around the world: Capital in the Twenty-first Century, an 816-page scholarly tome by the French economist Thomas Piketty that examined the massive increase in the proportion of income and wealth accruing to the world’s richest people. Drawing on an unprecedented amount of historical economic data from 20 countries, Piketty showed that wealth concentration had returned to a peak not seen since the early twentieth century. Today in the United States, the top one percent of households earn around 20 percent of the nation’s income, a dramatic change from the middle of the twentieth century, when income was spread more evenly and the top one percent’s share hovered at around ten percent. Piketty predicted that without corrective action, the trend toward ever more concentrated income and wealth would continue, and so he called for a global tax on wealth.
Like much of the popular commentary about inequality, Piketty’s book rested on an implicit moral claim—that wealth concentration beyond a certain degree violates the inherent sense of fairness on which a just society depends. But antipathy toward inequality alone cannot drive a policy agenda that will create a more egalitarian society. Critics of inequality need a compelling, evidence-based explanation for how and why the concentration of income and wealth at the top is problematic. Is this inequality the result of a purposely rigged game, or is it caused by unintentional distortions in a basically fair system? Whatever its causes, does inequality impede overall economic growth? Does it undermine widespread opportunity and upward mobility? Does it pose a threat to global capitalism and liberal democracy?
Policymakers would be able to make better decisions about “soaking the rich” if they had a clearer sense of the tradeoffs involved. In After Piketty, three left-of-center economists have curated an impressive set of essays responding to Piketty’s work and taking a few steps toward answering those questions. Among them are deep dives into the assumptions underlying Piketty’s predictions, historical accounts of the role of slavery and gender in capitalist systems, and considerations of the relationship between concentrated wealth and political power. The essays put Piketty’s arguments into a broad historical and intellectual context and highlight some noteworthy omissions that call into question his book’s most dire predictions. At the end of the volume, Piketty himself weighs in. The result is an intellectual excursion of a kind rarely offered by modern economics. Read the full review.