Capital in the 21st Century Review: Introduction (part 4 of 4)

The final part of the Introduction starts with a bit about the scope of the book:  1800 to the present, limited mostly to Westernized countries, particularly France, the United States, and England.  Thomas Piketty justifies this because of when and where modern tax data started to be collected and recorded, it being absent from everywhere before around 1800, and continuing to be absent in the Third World to this day.  Also, looking at the most economically developed countries may give a clue about where the rest of the world is heading (as much of the world modernizes its economy).

french flagPiketty gives three justifications (apart from patriotism) for focusing so much on France:

One is that the French were the first to institute a modern system of taxation, so French records go back further than those of any other modern economy.


He also points out the population growth in France has been modest, roughly doubling since 1789, while that of the United States (counting citizens, not native people on what would become the United States) went from 3 million to around 320 million today!

us population growth

The dynamics and structure of inequality look very different in a country whose population increases by a factor of 100 compared with a country whose population merely doubles.  In particular, the inheritance factor is much less important in the former than in the latter….this factor also explains why the structure of inequality in the United States has always been so peculiar, and the same can be said of US representations of inequality and social class.  But it also suggests that the US case is not generalizable (because it is unlikely that the population of the world will increase a hundredfold over the next two centuries) and that the French case is more typical and more pertinent for understanding the future.


The final justification is that France was the first large, modern economy to establish legal equality (1789), so differences in wealth are harder to explain by extra legal privileges (such as those held by the British nobility into the 1920s) or lack thereof (such as what black people faced as slaves and through Jim Crow laws in the United States until the 1860s and 1960s respectively).  Thus, we can’t blame French economic inequality on political inequality.


Following this section is a bit about himself.  After getting his Ph.D. (at age 22!) he was an Asst. Professor at M.I.T. in the early 1990s for two years before returning to France, claiming disenchantment with economics in the United States (or, at minimum, M.I.T.).  Following are several quotes.

I did not find the work of US economists entirely convincing.  To be sure they were all very intelligent…I quickly realized that there had been no significant effort to collect historical data on the dynamics of wealth inequality since Kuznets (1950s), yet the profession continued to churn out purely theoretical results without even knowing what facts needed to be explained.

To be blunt, the discipline of Economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with other social sciences.

The truth is that economics should never have sought to divorce itself from other social sciences and can advance only in conjunction with them…If we are to progress in our understanding of the historical dynamics of the wealth distribution and the structure of social classes, we must obviously take a pragmatic approach and avail ourselves of the methods of historians, sociologists, and political scientists as well as economists. 

useless math


I had my own rather unpleasant experience in graduate school in the early 1990s, encountering the exact phenomenon described in the second paragraph—extremely complex theoretical models wholly disconnected from reality.  I recall knowing I was going to love this book upon reading that!


After outlining the contents of the sixteen chapters, Thomas Piketty gives a final caveat that history has changed before and that neither he nor anyone else can predict 50 years into the future with perfect accuracy.  Hence the title of the book is a bit arrogant.

Coming up in a couple of weeks…Chapter 1!  Stay tuned.


I read Capital in the Twenty First Century in 2014-2015 and was extremely impressed by both the content and the presentation.  In my views, it’s easily in the running for most important economics book of the last few .  This year I am doing an in-depth, chapter-by-chapter review of the book.  One chapter will be reviewed and discussed every two weeks.

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