Review: Thomas Piketty’s 'Capital in the Twenty First Century' by Stephan Kaufmann

This being a review of a book that is itself a review, I'll keep it short lest it fall prey to the Law of Diminishing Fleas. 

Kaufman's extended essay starts by sketching the context in which Piketty wrote his opus — the wake of the ’08 financial crisis, Occupy Wall Street, and other symptoms arising from several decades of neoliberalism — before presenting a sympathetic summary of Piketty’s argument. That is, the return on capital outstrips the rate of growth, as demonstrated by several centuries of carefully curated tax records (these being too historical for prior economists to have parsed, and too economic for prior historians to have parsed), and so inequality inevitably increases.

Subsequent chapters ask why this book garnered the hype it did (the concept of increasing inequality under capitalism is hardly new), and what we should make of Piketty’s argument. The author examines several critiques of Piketty. The financial interests of many of his critics place them squarely at odds with his prescription (a wealth tax). These libertarian or neoliberal critiques miss their mark: Piketty’s data largely hold up to scrutiny, and his argument is ultimately in defense of capitalism and markets.

Piketty’s warning against inequality can be reduced to a single objection: if the belief in a society that justly rewards performance with legitimate differences in income disappears, then people will start to doubt whether everything is as it should be in capitalism and whether differences between poor and rich are ultimately just. Piketty argues like a crafty technician of power who exhibits concern about the subservience  and motivation of the propertyless masses.

That is, we must tax wealth not because poverty is gruelling and lethal and this wealth can be put to better use, but for the continued stability of capitalism and markets.