Capital in the 21st Century Review: Chapter 4 (part 1 of 3)

Chapter 4 is titled “From Old Europe to the New World.”  It essentially covers the same ground as Chapter 3, which covered Great Britain and France, but looks at three other countries:  Germany, the United States, and Canada.  By examining more than two countries it was easier to grasp which patters are universal versus in which ways have countries genuinely different from one another.

I broke this chapter into two parts.  Each part covers a country and then a new aspect of the capital/income ratio.

Part 1)  Germany and details of the mid-20th Century “shocks” which collapsed the capital/income ratio.

Part 2)  The United States and Canada, plus human slavery and how it affected the capital/income ratio, particularly in the United States.


Thomas Piketty Starts by looking at Germany. germany3 (Note:  the graph starts in 1870 rather than 1700 because 1870 is the date of German unification.)

C21c 4.1

The first thing to notice is that the overall evolution is similar (to Britain & France):  first, agricultural land gave way  in the long run to residential and commercial real estate and industrial and financial capital, and second, the capital/income ratio has grown steadily since World War II and appears to be on its way to regaining the level it had attained prior to the shocks of 1914-1945. (page 141)

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