cover image Capital in the Twenty-First Century

Capital in the Twenty-First Century

Thomas Piketty, trans. from the French by Arthur Goldhammer. Harvard Univ./Belknap, $39.95 (696p) ISBN 978-0-674-43000-6

The rich get richer, through no fault%E2%80%94or virtue%E2%80%94of their own, according to this sweeping study of wealth in the modern world. Economist Piketty's formula "r > g" expresses the simple but profound insight that because the returns on capital%E2%80%94interest on savings, stock dividends and appreciation, rent from a farm or apartment building%E2%80%94usually exceed the economy's growth rate, wealth (especially inherited wealth) tends to grow faster than wages and become more concentrated at the top of the income scale, and the economy increasingly caters to rich elites instead of ordinary workers. (The best antidote to this inexorable tendency, he argues, is a direct progressive tax on wealth.) Piketty makes his case with three centuries' worth of economic data from around the world organized in a trove of detailed but lucid tables and graphs. This is a serious, meaty economic treatise, but Piketty's prose (in Goldhammer's deft translation) is wonderfully readable and engaging, and illuminates the human reality behind the econometric stats%E2%80%94especially in his explorations of the role of capital in the novels of Jane Austen and Balzac. Full of insights but free of dogma, this is a seminal examination of how entrenched wealth and intractable inequality continue to shape the economy. (Mar.)