Sunday, April 13, 2014

On responding to Pitkettyism

It was sort of like arriving in high school one day to discover that some fashion had gripped the student body and I hadn't gotten the memo.  Suddenly, I was being besieged by friends and readers to say something wonderful about Thomas Pitketty's latest tome Capital in the 21st Century.  Actually, this was about the last thing I wanted to do. But never underestimate the power of not wanting to feel hopelessly uncool (for the 10,000th time.)  Someone mailed me an epub file and no less than James Galbraith had given C21C a positive review.  So what did I have to lose—except some more of my dwindling lifespan?

I was not impressed by the new Capital.  This was not because it wasn't a serious attempt to deal with a serious problem—income equality.  But as someone who has been following this subject for most of my life, I am not exactly impressed by someone who weighs in with another study / opinion on a subject so well-discussed.  Sort of like another Ph.D. thesis on Chaucer.  There were much better thoughts than Pitketty's on the economic value of a well-paid Producing Class by the 1910s—with Henry Ford putting the ideas into practice in 1914.  Besides, no one really gives a damn about income inequality—so long as folks at the bottom get paid well enough to have a decent life.

The main reason I wish I hadn't wasted my time on C21C is that the subject of income inequality is about dividing the economic pie.  This blog is dedicated to the much more interesting problem—How do we create the economic pie in the first place.  This is an important distinction.  If we are to survive, we MUST build a very different infrastructure that what we have now.  And we don't have much time.  Given that reality, those who aspire to being historically significant economists should be devoting their intellectual horsepower to development strategies.  It's pretty simple, actually. If we want a green sustainable society, we must build it.  Anything that diverts time and resources from those who can build the better world is a criminal act against the future.

Unfortunately, as dreary as it is, C21C is obviously an improvement over the crackpot neoliberalism that so dominates the economic profession.  Of course, that is jumping over a very low bar.  Yes, I was raised to believe we are supposed to be grateful for the smallest blessings but considering we are up against extinction, I can't waste my time on something so minor.  Considering everyone's time to absorb ideas is finite, I would suggest that C21C is only worth your time when you have first read The Instinct of Workmanship (the other significant economic event of 1914.)


  1. Can't speak for your other friends, but I know that if I used the word "wonderful" in the context of Piketty, it was to remark on how wonderful it was that people were talking about Marxism again.

    His buzz does not compete with your buzz. At this very late stage in the game, any buzz beats no buzz at all.

  2. No doubt 'creating' the economic pie is important but surely 'dividing' the pie must be at least of equal importance. It is nonsense to say, as J.Larson does that "... no one really gives a damn about income inequality — so long as folks at the bottom get paid well enough to have a decent life".

    The present outrageous inequality is very a very serious threat to the equilibrium. Times are changing - if you haven't noticed in your well paid job I suggest you read this excellent analysis and ignore it at our peril!