Must-Read: Walter Schiedel: Economics: The architecture of inequality

Must-Read: The first review of our After Piketty book. In Nature:

Walter Scheidel: Economics: The architecture of inequality: “Income inequality is an ancient and intractable social, economic and political condition…

…Now, five books examine its inevitability…. Piketty’s Capital in the Twenty-First Century (Belknap, 2014) tries to hold economics and politics together. He argues that inequality is a product of fundamental laws of capitalism, and would be amenable to change through a global tax on financial transactions…. After Piketty, edited by Heather Boushey, Bradford Delong and Marshall Steinbaum, responds to what the editors describe as academic economists’ less-than-healthy reaction to Piketty. It asks an interdisciplinary crowd of social scientists to tug at the various threads of his argument to see whether it unravels. (It also includes a fascinating essay from an emboldened Piketty on issues such as the potential of collective bargaining to reduce inequality generated by capitalism.) The book serves as a fantastic introduction to Piketty’s main argument in Capital, and to some of the main criticisms, including doubt that his key equation — r > g, showing that returns on capital grow faster than the economy — will hold true in the long run.

It also contains thoughtful interventions in debates about the political economy of inequality. Economist Branko Milanović, for instance, documents how sharing capital more equally across the population could weaken the impact of a rising capital share (when those who own capital gain more of an economy’s income). Stemming the tide of rising inequality in a period of slow growth may require redistribution of capital, not just income…

March 16, 2017


Brad DeLong
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