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13 Aug 2015 15:52
Economist Thomas Piketty answers a question during his press conference at Japan National Press Club in Tokyo on January 31 2015. (Toshifumi Kitamura, AFP)
It’s almost the equivalent of the Rolling
Stones playing at your neighbourhood bar: the rock star of economists, Thomas
Piketty, is to deliver this year’s Nelson Mandela Lecture in Johannesburg in
His 577-page doorstopper, Capital in the
Twenty-First Century, had sold 1.5-million copies in French, English, German,
Chinese and Spanish by the beginning of this year.
Based on a simple premise, that the
dynamics of wealth accumulation are causing global inequality levels to widen,
it was lauded by economists and business leaders.
John Maynard Keynes wrote that the ideas of
economists and political philosophers are “more powerful than is commonly
understood. Indeed, the world is ruled by little else”.
Many enthusiastic readers of the left-wing
Chris Huhne, writing for the Guardian, argued that the massive
popularity of his book showed that the intellectual tide was turning: his use
of heroic number-crunching offering “proof” that, under free-market
capitalism, inequality is the norm, not the exception, may finally convince
governments and the public alike that markets must be tamed.
Piketty tracks income and wealth over the
past century in Britain and the United States, and over a longer period in
France, where tax records have existed for longer.
His central thesis is that, when the rate
of return to capital outstrips the rate of growth, inequality tends to rise.
This has been the case in the US where wealth has become even more concentrated
than in the “old world” of Europe. In 2010, 1% of Americans owned about
one-third of all the wealth in the country; in Europe about one-quarter own the
Developing countries have also been
affected by increasing global inequality. In Argentina, Columbia, China, India,
Indonesia and South Africa, wealth is becoming increasingly concentrated at the
Piketty’s first chapter, Income and Output,
begins with August 2012’s Marikana massacre. “This episode reminds us that
the question of what share of output should go to wages and what share to
profit - in other words, how should the income from production be divided
between labour and capital? - has always been at the heart of distributional
Sello Hatang, the chief executive of the
Nelson Mandela Foundation, said this week they had been keen to “find a
voice who could speak eloquently to a new global economic model and who is well
equipped to engage fruitfully with the South African and African political
economy today. Professor Piketty is ideal for this purpose.”
David Priestland, a professor of modern
history at Oxford University, writing in the Guardian, said: “Big books
can make a difference, even in a country notoriously suspicious of
“But they can only have a major impact
when they coincide with serious political and economic crises - and so far it
seems that 2008 was not serious enough. In the meantime, the left will have to
be satisfied with more piecemeal advances.”
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