It seems that I have joined the party a little late. Judging by the paucity of fresh articles and the decreasing sales of the French economist's book, Capital in the Twenty First Century, it appears that the Piketty-hysteria is ostensibly dying down. The same thing happened last time I purchased a book due to general panic, only that work dealt with wizardry rather than inequality. I remember arriving at school overly excited about the prospect of contributing to the discussion, only to discover that my peers had maliciously moved on. Roughly sixteen years later, something similar has occurred.
Now that the panic has subsided somewhat, I find myself asking whether Piketty's book, for an average-Joe like me, was worth reading. Hopefully, by explaining my personal experience reading Piketty, I will help other intellectually-curious, non-economist types decide whether it's worth all the effort.
It cost me £30 for the hardback edition and around 28 hours of wage labour - £252 based on my current salary - to complete Piketty's 577-page tome. I have created a graph - I won't include it here because of statistical ambiguities - that has documented the marginal benefit and the marginal cost of the labours of the past week. It appears - in the short term at least - that I've been reading too much for too little. Sure, I've been able to name-drop Piketty into conversations that probably didn't warrant his name, but I'm not sure that's worth £282 (wage labour + cost of book). Moreover, I'm slightly concerned that I've started to look at the world through the lens of an economist. It's all so unromantic.
Nonetheless, there are some benefits to reading Piketty's book, even in the short-term. To begin with, despite what some commentators have inexplicably claimed (or perhaps assumed), Capital in the Twenty First Century is not a difficult book. In fact, it's often quite enjoyable. One might see certain equations, such as ß = s/g, and shudder at the thought of having to grapple with intense mathematics. The reality, however, is that Piketty takes his time guiding the reader through these equations making them easy to digest - other economics books are not so forgiving. The beauty of Piketty's work is in its simplicity and his fundamental argument is perhaps the most simplistic of all.
Piketty claims that the profit gained through wealth (capital) is increasingly outweighing economic growth (often imagined as GDP) and this has led and will lead to a widening gap of economic inequality. He simplifies this notion in a basic equation where r stands for the income gained through capital and g represents the growth of the economy (r > g). The r > g hypothesis - which is fast becoming the e = mc² of economics - is justified with an impressive collation of data. This isn't a difficult theory to understand, and it can work wonders if one is unfortunate enough to be discussing the problems of the economy at work or in the pub. This book has the potential to make one seem smarter than they perhaps are.
Piketty goes on to assert that if we are to fix this apparent flaw in capitalism, we need a 2% universal wealth tax and an 80% taxation rate for the highest earners. This part of the book - coming in around the 470 page mark - is perhaps the most interesting. The first three parts consist of a brilliantly executed diagnosis of something we are verily familiar with - after all, we knew beforehand that inequality was a problem - yet Piketty's final section offers an insightful and somewhat original remedy for the ostensible ills of unrestricted capitalism.
One could argue that the above summation renders a reading of Piketty's work unnecessary. After all, his fundamental argument (r > g) can be described in a couple of paragraphs. However, Capital in the Twenty First Century is packed with edifying information that offers a clear interpretation of recent strands of macroeconomics. Piketty talks at length about the failures, and occasional successes, of privatization, the problems of laissez faire governments and so much more. What one will inexorably read in articles about Piketty's work probably resembles the above summation, but a thorough reading of his book is far more insightful.
Now that I have finished the book, the overall marginal benefit will entirely depend on its long-term impact. And although I hate to deal with projections - that's an economist's job - it isn't difficult to predict that this book will become a staple of left-wing economic theory for years to come.
Therefore, while the last week has been at times excruciatingly boring and perhaps a little bit too expensive, I presume, in the long term, it'll be well worth the cost. Inequality, and thus Piketty, isn't going anywhere, and for that reason I would recommend that any old average-Joe purchase a copy of Capital in the Twenty First Century. One should be able to name-drop Piketty in pubs and in the workplace for years to come.
I offer one last piece of advice: save yourself twenty quid and wait for the paperback. It makes economic sense.