Capital In The Twenty-First Century

piketty-capital-21st-centuryHey there reader.  I hope you’re doing great.  I started a new book this week, Capital in the Twenty-First Century by French macroeconomist, Thomas Piketty.  The book is wonderful, I love it.  Piketty’s thesis is simple enough: economic inequality happens when the return on investment is greater than growth (I=R>G).

Piketty analyzed thousands of tax returns and found some interesting facts about wealth and work over the last 200 years;
  • Almost all wealth was destroyed by the Great Depression and the 30 years of prosperity which followed were unlike any time since the industrial revolution.
  • The average worker did not become wealthy from their work, but union membership helped after WW2.  Work is primarily for paying bills.
  • Education was correlated with increasing wages, but in the long run, education does little to decrease economic inequality.
  • People build wealth by acquiring or inheriting property, investing, marrying and having children.  An example: wealthy parents pay for a child to attend graduate school, the parents bequeath to them the down payment for their first house in an affluent neighborhood so their grandchildren can attend a high-quality public school.  The adult children start their own business and repeat the cycle.

Piketty believes a global tax on wealth would reduce economic inequality and reduce the frequency and severity of recessions and depressions.  I think he is right.


Published by

I want to write about new experiences, the people I meet and the things I learn. I moved from Tempe, AZ to Arlington, VA with my dog 5 years ago. We love it here.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s