More about economics, but it won’t take long. Not long after I finished scribbling some ideas that appear on this blog at tedious length, under the heading “Why Economics is Bad for You” (I actually only published part one) there occurred one of those publishing phenomena that journalists love; where a book becomes widely talked about (if not read) for no obvious reason. Journalists take turns to guess the reason, which fuels interest in the title and helps to sell papers; given that most of the people persuaded that they should have an opinion on the book will read an article about it rather than the book itself.
Especially this one; “Capital in the 21st Century” by Thomas Piketty: an economics tome weighing in at around 685 pages in which Prof. Piketty concludes that the rich get richer and the poor get poorer. This is not a startling conclusion. The book started to become important in the USA, where equality and fraternity have historically carried less weight than liberty, but could it have caused surprise even there?
In the UK we have routinely measured equality of income for many decades, so we thought we knew that the gap between rich and poor narrowed in the post war years but has become wider under every government since 1978 (the year before Mrs Thatcher took office – the last three supposedly socialist prime ministers have presided over growing inequality). No one argued this was not happening; the argument was that it didn’t matter because the rich created more wealth that trickled down to the masses, which seems to rely on the questionable assumption that total wealth is not a finite resource.
It is perfectly ok for academics to critically examine what we think we know; and no one should be surprised that a French intellectual can take over 600 pages to tell us that what we thought we knew was true in fact is. What is strange is the impact this book has had, especially when there has been a glut of books and commentaries by respected economists in the years since the 2007-8 crash with the theme of rising inequality and the pernicious effects it has had on the system of capitalism that we know and love. Read More→