Lunchtime Must-Read: Matthew Yglesias: The Short Guide to Piketty’s “Capital in the Twenty-First Century”

Matthew Yglesias: The short guide to Capital in the 21st Century: “Can you give me Piketty’s argument in four bullet points?

• The ratio of wealth to income is rising in all developed countries.
• Absent extraordinary interventions, we should expect that trend to continue.
• If it continues, the future will look like the 19th century, where economic elites have predominantly inherited their wealth rather than working for it.
• The best solution would be a globally coordinated effort to tax wealth….

Does this have anything to do with Karl Marx’s Das Kapital? Quite a bit, actually. Piketty’s analysis of the economy is different from Karl Marx’s, but his bottom line is that Marx was right to worry about capitalism. During the Cold War years it appeared that Marx was simply wrong to assert that market societies would be dominated by owners of capital. Wages for ordinary workers were high and rising. Economic elites were largely business executives or skilled tradespeople (lawyers and surgeons, say) rather than owners of enterprises. And iconic “capitalist” figures were entrepreneurs who built businesses rather than heirs to old fortunes…. Piketty says that this was essentially a happy coincidence reflecting the unique circumstances of the post-war era…. Unless drastic measures are taken, the future belongs to people who simply own stuff they inherited from their parents…. Piketty’s vision of a class-ridden, neo-Victorian society dominated by the unearned wealth of a hereditary elite cuts sharply against both liberal notions of a just society andconservative ideas about what a dynamic market economy is supposed to look like…