Thursday, April 17, 2014

Capital in the 21st Century: Revolutionary analysis questions basic distribution of wealth

Few economists inspire popular movements, but Thomas Piketty has. “We are the 99 per cent”, the slogan of the Occupy Movement, was based on his in-depth analysis with Emmanuel Saez of income distribution and inequality in the US in 2003.

The Frenchman’s new book Capital in the 21st Century is already causing a stir. Some reviewers have called it the economic book of the year, others of the decade.

Piketty’s ground-breaking work on the historical evolution of income distribution is impressive, but he covers many other areas, including the erosion of meritocracy by inherited wealth, public debt, education, health and taxation. He also proposes challenging ideas for funding the social state in the 21st century. 

Piketty’s central point is that when the rate of return on capital exceeds the rate of economic growth, the economy automatically generates arbitrary and unsustainable inequalities which undermine the meritocratic values on which democracy is based.

Unless capital owners consume all of the return on their capital, more will remain for them and they get richer, effortlessly.

Read More from the original article in the link here Revolutionary analysis questions basic distribution of wealth - Economic News | Ireland & World Economy Headlines |The Irish Times - Fri, Mar 28, 2014