Instaread Summary of Capital in the Twenty-First Century by Thomas Piketty
Five out of five stars
As a news junkie, I have seen several brief discussions of this book. Piketty is a French economist that puts forward strong arguments about the dangers of the growing wealth inequality. He notes that a solid middle class is a recent phenomenon and largely due to the massive disruptions of the First and Second World Wars. High levels of taxation reduced the accumulation of wealth in the hands of a few as that accumulation is a process that has a powerful feedback loop. As capital accumulates in the hands of a few, they have the means to earn more in interest, return on investments and pass it along to their heirs.
This summary is consistent with what I have seen on the news shows and extends the explanation even further. Conservatives wedded to the principle of supply side economics and the value of tax cuts for the rich will find this summary and the book it describes appalling. For the arguments are for much higher taxes on the wealthy, including taxes on the movement of capital between nations. This would prevent the development of international tax shelters, something that governments don’t like and would like to do something about. However, they are terrified that any increase in the taxes on capital will cause it to flee from their jurisdiction.
As I read through the summary I was convinced that I needed to read the book and that it should be required reading of all policy makers on both sides of the arguments made by Piketty. It could very well live up to the title and be a policy manual for how capital is managed by governments in the twenty-first century.
This book was made available for free for review purposes.