Thursday, May 07, 2015

Introduction to Piketty's 'Capital'

'In a way, we are in the same position at the beginning of the twenty-first century as our forebears were in the early nineteenth century: we are witnessing impressive changes in economies around the world, and it is very difficult to know how extensive they will turn out to be or what the global distribution of wealth, both within and between countries, will look like several decades from now.... There is no fundamental reason why we should believe that growth is automatically balanced. It is long since past the time when we should have put the questions of inequality back at the centre of economic analysis and begun asking questions first raised in the nineteenth century' (16).

I don't know how long it'll take me to read this 600+ page tome,
but when I do I'll probably share some choice excerpts here.
'Social scientific research is and always will be tentative and imperfect. It does not claim to transform economics, sociology, and history into exact sciences. But by patiently searching for facts and patterns and calmly analyzing the economic, social, and political mechanisms that might explain them, it can inform democratic debate and focus attention on the right questions. It can help to redefine the terms of debate, unmask certain preconceived or fraudulent notions, and subject all positions to constant critical scrutiny. In my view, this is the role that intellectuals, including social scientists, should play, as citizens like any other but with the good fortune to have more time than others to devote themselves to study (and even to be paid for it--a signal privilege)' (3).

'What are the major conclusions to which these novel historical sources have led me? The first is that one should be wary of any economic determinism in regard to inequalities of wealth and income. The history of the distribution of wealth has always been deeply political, and it cannot be reduced to purely economic mechanisms... The second conclusion, which is at the heart of this book, is that the dynamics of wealth distribution reveal powerful mechanisms pushing alternately toward convergence [that is, the reduction of inequalities] and divergence [that is, the exacerbation of them]. Furthermore, there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently' (20-21).

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