WITH ALL DUE respect to the ‘dismal science’, it’s not too often that you find an economist who gets people this excited.
Later today, more than 600 people will cram into a sold-out event in Dublin to listen to what Thomas Piketty has to say. It comes just days after he had people queuing around the block in London to hang on his every word and bringing copies of his book to sign - something that has been happening in every city he has visited on his book tour.
In the space of just a few months, Piketty has gone from working at his day job as a lecturer at the Paris School of Economics to the economics equivalent of a break-out star (it has already been described as ‘Piketty mania’ by the British media).
So what happened? Piketty’s book, the deceptively-excitingly-titled Capital In the Twenty-First Century, is the 696-page tome which has been hovering around the top of bestseller lists since it was published earlier this year.
In it, Piketty argues that inherited wealth is always going to grow faster than wealth that is earned through work. In other words, that inequality is a built-in part of capitalism and the richest people in the world – the top 1 per cent – are always going to keep getting richer.
Or, as Channel 4 News journalist Paul Mason put it:
The fact that rich kids can swan aimlessly from gap year to internship to a job at [their] father’s bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident. It is the system working normally.
Piketty’s neatly-researched and engagingly-written book has captured public attention and become a major talking point. Mason points out that much of the book is spent “marshalling the evidence that 21st-century capitalism is on a one-way journey towards inequality – unless we do something”.
On the left, commentators love him for pointing out this inherent unfairness in modern capitalism. On the right, criticism has focused on his methodology and his conclusions.
In a piece in the New York Times, Thomas B Edsall covered some of the criticisms, noting:
It’s not only the right that is disturbed; there is also opposition among a number of progressive activists and liberal policy analysts who recognise the dangers Piketty’s analysis poses to their agenda.
Piketty is part of a new breed of academics who don’t just write about their research and then hand it over to policy exerts and politicians to actually implement ideas. Instead, in the same way that the authors of books like The Spirit Level were prescriptive about what needs to be done next, Piketty is strident about what capitalist economies should do.
He recommends a global tax on money that people have inherited from their families, saying that there should be an 80% tax on incomes above $500,000, a 15% tax on capital, and enforced transparency for all bank transactions.
Sound compelling? It’s definitely kicked off a lot of arguments. While some of the policies that he argues for – including the wealth tax – have already been brushed aside by the Irish government, he’s likely to have a lot to say about what could or should be done about inequality in Irish society.
If you want to hang around outside – all the seats sold out ages ago – Piketty will be giving the keynote address at the annual conference of Tasc, the social policy think-tank, at the Croke Park conference centre later today, followed by a response from Central Bank governor Patrick Honohan and a discussion with the audience.
FACTFILE
Name: Thomas Piketty
Born: 7 May 1971 in Clichy in France.
Job: Professor of Economics at the Paris School of Economics
Education: He has a Masters in mathematics from the Ecole Normale Supérieure in Paris and PhD in economics from the LSE and EHESS.
Most likely to say: “The distribution of wealth is one of today’s most widely discussed and controversial issues. But what do we really know about its evolution over the long term?” (Capital, page 1).
Least likely to say: “If you work hard, you’ll definitely be able to make lots and lots of money. Long live the American Dream”.
Stay tuned later on when we’ll be covering Piketty’s speech at the Tasc conference and the response from Patrick Honohan.
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