Over at Business Insider: Five Questions and Answers About Thomas Piketty’s “Capital in the Twenty-First Century”: Monday Focus; April 28, 2014
Rob Wile: Brad Delong On Piketty: Below is a Q&A with Brad Delong…
…economics professor at Berkeley. The topic was Thomas Piketty’s new book “Capital in the Twenty-First Century.” This Q&A went out to subscribers of our “10 Things You Need To Know Before The Opening Bell” newsletter on Monday morning. Sign up here to get the newsletter and more of these interviews in your inbox every day.
I have expanded my answers a bit:
BUSINESS INSIDER: What one comment or idea has stuck with you most from Berkeley’s “Piketty Day?”
BRAD DELONG: That Piketty has a very uphill climb to get modern American economists to believe his story. Their–our–default models were built for an age in which there was very little movement in inequality and in the capital share of income, and thus the models assume that virtually nothing has a big effect on income and wealth inequality or the capital share of income. Thus our knee-jerk reaction is to reject Piketty’s story because it does not fit our standard models. But, then, no story that accounted for the rise would fit our standard models.
BI: Should everyone be reading Piketty’s book? Do you/the department plan on telling all of your students to?
BD: Well, it really depends on what else you have to do with your time? Look: I am an economist, and I think everything is a matter of opportunity costs. Certainly students taking courses focused on inequality, or advanced courses on economic history should read “Pick-Eddie”, and should do so cover-to-cover. Others? I do think six hours spent reading because he is far superior to spending six hours watching episodes of “My Cat from Hell” on Animal Planet, but tastes do differ.
BI: Do you have any sense of how Piketty is being received by elected officials?
BD: Not really. As you know, Elizabeth Warren likes the book…
>BI: We’ve seen a lot of curious examples of who in real life might embody Piketty’s patrimonial capitalist, from Paris Hilton to Bill Gates, none of which really seem to fit. Who in your mind embodies Piketty’s archetype?
BD: It is too early for there to be an archetype. The Walton heirs might fit as a stopgap… The archetype Piketty has in mind of his “patrimonial capitalism” isn’t an entrepreneur. The archetype isn’t even, really, the child of an entrepreneur who has a managerial role. Rather, it is an heir whose parents were themselves among the “idle rich”. We don’t have many of those yet. But Kathy Geier made an excellent catch when she picked up on this. Such a thing would have been inconceivable back in the 1970s.
BI: What is the best criticism of Piketty you’ve read?
BD: You know, that is a surprisingly hard question to answer. The average quality of the negative criticism has been so low. I do not understand why this is so. I would say Suresh Naidu’s forthcoming review in “Jacobin” (previewed here is the best criticism–but that is not so much a criticism as a development and an extension, and a filling in holes in the argument.