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A Review on ‘Capital in the 21th Century’

Received: 16 November 2014     Accepted: 4 December 2014     Published: 16 December 2014
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Abstract

This paper is a brief review on the book ‘Capital in the Twenty-First Century’ by the French scholar Thomas Piketty. The book has started a new debate about inequality and capital taxation in Europe. It provides interesting empirical facts and develops a theory of the functioning of capitalist economies. However, I personally think the book is less convincing than recognized in the public debate. The demonstrated theory of economic growth in the book is elusive and lacks a psychological and behavioral underpinning. In fact, I do think that the increasing inequality and economic divergence are caused by capitalism but the psychological and behavioral aspects of humans are of similar or greater significance. Therefore, Piketty’s argument does not stimulate an open and scientifically founded debate in all aspects.

Published in Psychology and Behavioral Sciences (Volume 3, Issue 6)
DOI 10.11648/j.pbs.20140306.15
Page(s) 207-211
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Inequality, Poverty, Behavioral Economics, Capital Taxation, Eurozone Crisis

References
[1] TIME Magazine, Here’s Why This Best-Selling Book Is Freaking Out the Super-Wealthy, 23. April 2014.
[2] Milanovic, B., The Return of ‘Patrimonial Capitalism’: A Review of Thomas Piketty’s Capital in the Twenty-First Century, Journal of Economic Literature, Vol. 52, No. 2, 519-34, 2014.
[3] Piketty, T., Capital In The Twenty-First Century, Harvard University Press, 2014.
[4] De Grauwe, P., Lecture on Behavioral Macroeconomics, Princeton University Press, 2012.
[5] Krugman, P., Geography and Trade, MIT Press, 1993
[6] Krugman, P., What’s New About The New Economic Geography?, Oxford Review of Economic Policy, Vol. 14, No. 2, p. 7-17, 1998.
[7] Anderson, D., Barkbu, B., Lusinyan, L., Muir, D., Assessing the Gains from Structural Reforms for Jobs and Growth, Chapter 7, IMF Report on Jobs and Growth: Supporting the European Recovery, 2014.
[8] Nordhaus, W.D., The Political Business Cycle, Review of Economic Studies, p. 169-190, 1975.
[9] Shi, M. and Svensson, J., Political Budget Cycles: Do They Differ Across Countries and Why?, Journal of Public Economics, vol. 90, pp. 1367-1389, 2006.
[10] German Council of Economic Experts, More Confidence in Market Processes, Chapter 6: The German Current Account – Actionism Is Inappropriate, annual report, 2014.
[11] Kahneman, D. and Tversky, A., Judgment under Uncertainty: Heuristics and Biases, Science, Vol. 185, No. 4157, p. 1124-1131, 1974.
[12] European Central Bank, The Eurosystem Household Finance and Consumption Survey, Statistics Paper Series 2, April, 2013.
[13] Kalckreuth U., T. Schmidt, M. Eisele, J. Le Blancc, J. Zhu, The PHF: a comprehensive panel survey on household finances and wealth in Germany, Discussion Paper 13/2012, Deutsche Bundesbank, 2012.
[14] Eggertsson, G. Ferrero, A. and Raffo, A., Can structural reforms help Europe?, Journal of Monetary Economics, Vol. 61, p. 2-22, 2014.
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  • APA Style

    Bodo Herzog. (2014). A Review on ‘Capital in the 21th Century’. Psychology and Behavioral Sciences, 3(6), 207-211. https://doi.org/10.11648/j.pbs.20140306.15

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    ACS Style

    Bodo Herzog. A Review on ‘Capital in the 21th Century’. Psychol. Behav. Sci. 2014, 3(6), 207-211. doi: 10.11648/j.pbs.20140306.15

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    AMA Style

    Bodo Herzog. A Review on ‘Capital in the 21th Century’. Psychol Behav Sci. 2014;3(6):207-211. doi: 10.11648/j.pbs.20140306.15

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  • @article{10.11648/j.pbs.20140306.15,
      author = {Bodo Herzog},
      title = {A Review on ‘Capital in the 21th Century’},
      journal = {Psychology and Behavioral Sciences},
      volume = {3},
      number = {6},
      pages = {207-211},
      doi = {10.11648/j.pbs.20140306.15},
      url = {https://doi.org/10.11648/j.pbs.20140306.15},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.pbs.20140306.15},
      abstract = {This paper is a brief review on the book ‘Capital in the Twenty-First Century’ by the French scholar Thomas Piketty. The book has started a new debate about inequality and capital taxation in Europe. It provides interesting empirical facts and develops a theory of the functioning of capitalist economies. However, I personally think the book is less convincing than recognized in the public debate. The demonstrated theory of economic growth in the book is elusive and lacks a psychological and behavioral underpinning. In fact, I do think that the increasing inequality and economic divergence are caused by capitalism but the psychological and behavioral aspects of humans are of similar or greater significance. Therefore, Piketty’s argument does not stimulate an open and scientifically founded debate in all aspects.},
     year = {2014}
    }
    

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Author Information
  • Department of Economics, Reutlingen, Germany

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