The 2014 English publication of Capital in the Twenty-First Century made the French economist Thomas Piketty a household name. The bestselling book, and the discussions that surrounded its release, decisively shifted the public conversation about economic inequality. The dominant narrative in the aftermath of the 2008 financial crisis portrayed dysfunction in Washington as the result of political polarization—a clash between the well-meaning liberalism of Barack Obama’s administration and Republican obstructionism in Congress. Piketty suggested a counter-narrative: everything happening in Washington, on both sides of the political aisle, was part of the same elite agenda—to roll back the New Deal and give capital free rein to go wherever it wanted without fear of taxes or regulation.
We tend to view the economy as a natural force, independent of our ideas about it. This book systematically demolishes that self-serving conceit.
At its core, Capital in the Twenty-First Century presented a mathematical model that shows inequality is inevitable when the economic system is left to operate on terms dictated by capitalists. When that happens, the stock of capital grows faster than the economy as a whole, and as a result, those whose income derives primarily from capital rather than labor gain a larger and larger share of the pie. The algebraic essence of this argument was symbolized by the inequality r > g, which says that, historically, the rate of return on capital is larger than the rate of economic growth. During the brief historical interlude in the twentieth century when that “law” did not hold, capitalistic forces of divergence were tamed by egalitarian policies such as strong progressive taxation of income and inheritance. Insofar as the book offered a political diagnosis of the subsequent reversion to the inegalitarian norm, it was that the transnational post–Cold War retreat from social democracy had re-created the economic conditions of the Gilded Age.
Six years later, Piketty returns with the thousand-page Capital and Ideology, a sweeping elaboration of his views on the global rise of economic inequality after 1980 and the twilight of social democracy. It occupies almost twice the size of his earlier work, ranging much more widely over space and time even as it remains grounded in a discussion of Europe and the United States. The new book loses much of the economic theory, but it gains a vast wealth of historical, sociological, and political detail, reflecting the progress and expansion of Piketty’s (and his collaborators’) empirical research agenda in the intervening years.