Saturday, April 26, 2014
Keeping track of Piketty's boom
Any economist with a concern for inequality and a preference for internationalism should be happy by the fact that Piketty’s “Capital in the XXIst Century” has become the best seller and one of the most debated books of these times. By the way, I was right predicting that it would be the book of the year. The videos of a debate between the author, Stiglitz, Krugman, Durlauf and Milanovic in New York, and a TV interview with Paul Krugman about the book must be watched by anyone interested in these issues. There have been additional reviews by Robert Solow, Martin Wolf and John Cassidy. Paul Krugman has explained the difficulties that the right finds in forging arguments against Piketty, and he also has developed on the controversy about the fact that Piketty uses relatively conventional methods to develop his analysis. In my view, the fact that Piketty develops his heterodox conclusions using orthodox methods reinforces his credibility. Most probably, the conclusions are more than robust to the use of more heterodox methodologies and theories. So far, an unfortunate aspect of the debate, especially in the US, is that not much attention has been paid to the issue of the decline of the nation-state as the unit where a new social contract is needed to fight global inequalities. A federal organization of Europe and international progressive taxation are key issues in the fourth part of the book, but this transnational dimension is not deserving enough attention.