There is a definite reason why this book is rated as a VIB: a Very Important Book, taking the world by storm. Written by French economist Thomas Piketty, published originally in French, the insightful writing and the way it makes the reader thing begged for its well-deserved recognition worldwide, and it got just that. “Capital in the Twenty-First Century” didn’t find difficulty in becoming the bestseller once translated; since its foundations are based on broad and energetic genres of global inequality, the many subtle intricacies of which even expert economists find hard to comprehend.
Some reckon it heralds, or may itself cause, a pronounced shift in the focus of economic policy toward distributional questions.
Capital encompasses more than a decade of research and findings by Piketty himself and a handful of other great economists featuring the detailing of the chronological changes in the concentration of wealth and income. This valuable data has allowed Piketty to portray the evolution of the principles of inequality during the industrial revolution. In those centuries, according to Piketty, western European society was practicing great depths of inequality struggling to stay afloat. The private wealth circulated and stayed in the hands of the wealthy sitting atop of a rigid class structure.
Similar systems persevered even after industrialization, contributing to a rise in wages. The chain of events causing chaos that was reflected not only the World War I &II, but the Great Depression too. This history has helped Piketty derive his theories about inequality and capital. According to him, wealth grows faster than economic output (r>g). In the perfect hypothetical situation, all things being equal; economic growth must diminish the importance of wealth.
Piketty also makes some very fine recommendations suggesting that the governments must intervene by adopting global tax policies on wealth to put an end to global inequality resulting in economic instability in the future to come.
It is for the readers to decide now whether Piketty has succeeded in influencing the mindsets of our financial elites or his recommendations and theories are merely skeptical and nothing more than notional ideologies.
The book is original, rigorous and a work of exceptional ambition since it aims to reorient our comprehension of economic history making it a must read for all economic enthusiasts.