I read the introduction to Piketty last night, then dreamed that my computer stopped working because – it claimed – it was contributing to the aggregate increase in the rate of return on capital over economic growth. I do not remember how the dream ended.
I will write more about the actual book later. But I’ve been interested in the debate in the economics blogosphere. Left-wing economists all seem to think Pikety is right and right-wing economists all seem to think he’s wrong. (I would note that the objections I’ve heard from some on the right: ‘Piketty disregards the decline of inequality between nations, cf the development of China,’ or ‘Pikety disregards the ability of education and skills transfer to reduce inequality,’ seem to be issues Piketty addresses in the introduction to his book. Maybe there are more substantive critiques out there?).
Anyway, my point is that the question Piketty asks is important: does capitalism reduce or increase inequality over time? He reckons it increases inequality, left-wing economists agree with him; right-wing economists reckon he’s wrong. What are non-economists supposed to make of a discipline that splits along partisan lines over a fundamental empirical question?