One of his conclusions, and a central theme is: the abandonment of classic political economy (the interaction of economics and public institutions) by many professional economists in the academic and government communities in favor of very mathematical models, was, and is, a mistake.Ĥ. This is a stunning conclusion, at least for many mainstream economists, who assumed more faith in automatic market stabilizers for imbalances in national income and wealth distribution.īut, there is a reason Piketty chose his book title to echo Karl Marx’s classic work. Concentration of wealth historically leads to concentration of political and institutional power, and concentration of political and institutional power leads to more concentration of wealth. And workers who fall below median income have seen their share of national wealth and income dramatically cut.ģ. The median income worker, on the other hand, received virtually no gains from increased productivity. 1 percent, is increasing at 2-3 times the overall growth rate of the economy (GDP). The wealth of the 1 percent, and even more the. Standard government economic data collection missed this. When looking at the top 1 percent and higher the actual travesty of inequality is uncovered.

Economic surveys defining the “top” incomes as the top “20 percent” disguised the rate of concentration in recent years. and Western Europe is returning to its historic dominance in the capitalist system after a brief 35-year period of relative shared prosperity. Increasing concentration of wealth (primarily returns to capital) in the U.S. His book, which draws on massive data retrieved from previously untapped tax reporting resources, is literally shaking the foundations of even liberal economic thinking because of four principal conclusions:ġ. Even Robert Solow, Nobel Prize-winning economist, famed for discounting the dangers of excessive inequality over the “the long run” in market economies, was ready to dialog with Piketty at the Economic Policy Institute’s forum this past week. Nearly every economist of any reputation must now deal with the stunning evidence behind the inequality trends Piketty illuminates. policy and academic centers armed with mounds of data that is shaking up economic prognosticators. French political economist and author of “Capital In The 21st Century” Thomas Piketty is making a groundbreaking book tour of U.S.

Capital in the 21st century