About a month ago, very few in the US and UK had heard of Thomas Piketty. Now you can’t escape him. Not only has his book on inequality, Capital in the Twenty-First Century, reached number one overall on Amazon (a rarity for non-fiction); he is also seemingly omnipresent in newspapers, TV and other media. On his US tour, this once-obscure French economist was invited to share his insights with the treasury secretary, Jack Lew, at the White House. It’s official: he is a phenomenon.
Oddly enough, the Piketty who is treated like a celebrity in America and Britain remains a minor figure in his home country. As Tyler Cowen and Veronique de Rugy pointed out, when his book was published in France last year, the response was muted, and ‘unlike Esquire magazine, no one declared it “the most important book of the century”.’ What’s perhaps even more puzzling is how the Yanks and Brits are lapping up a book from a Frenchman that sharply criticises the US and UK as the worst cases of inequality run riot, while praising his own France for avoiding such excesses.
I was somewhat familiar with Piketty’s work (with Emmanuel Saez) on income inequality before finally managing to get hold of a copy of his new book. I had assumed he was a humble technical specialist, slogging through historical data, who just happened to be plucked from obscurity to instant stardom. But I was surprised to discover how self-regarding he is. Time and again in the book he tells readers that he has surpassed previous writers: ‘The sources on which this book draws are more extensive than any previous author has assembled.’ I was also somewhat taken aback when Piketty claims that French academics are superior to their American counterparts. He tells of how, after spending a couple of years in Boston in his early twenties, he was compelled to return to France. In the 17 years since, he proudly announces, ‘I have not left Paris, except for a few brief trips’, presumably to avoid contamination from non-French influences.
While likening himself to the classical economists David Ricardo and Karl Marx, Piketty does not miss a chance to remind you that he is much better than them… because he has compiled more data than they did. Piketty’s prominent references to Marx are especially peculiar. His title echoes Marx’s Capital, and Marx is mentioned throughout the book. But he is dismissive of Marx’s work: ‘Marx usually adopted a fairly anecdotal and unsystematic approach to the available statistics’; ‘Marx totally neglected the possibility of durable technological progress’; and so on. Marx is Piketty’s strawman, who he continually knocks down to show his own superiority. Having studied Marx’s Capital in the past, I was scratching my head at ideas Piketty ascribes to Marx, like his supposed ‘theory of infinite accumulation’. But my confusion began to make sense when Piketty admitted in an interview with the New Republic that he has not read Marx’s major work (‘I never managed really to read it… Das Kapital is, I think, very difficult to read and for me it was not very influential’).
Piketty’s approach – heavy on data, light on theory and explanation – in fact highlights his distance from classical economists like Marx. Capital in the Twenty-First Century reveals Piketty to be more accountant than economist: the bulk of his 685-page book consists of statistics he has gathered on wealth and income since the eighteenth century. When Piketty pronounces his ‘first fundamental law of capitalism’ (which concerns capital’s portion of total national income), he notes that it is ‘a pure accounting identity’ and ‘tautological’. Contrast that to Marx, who aimed to ‘lay bare the economic law of motion [my emphasis] of modern society’ – in other words, to explain the underlying dynamics, not just count the beans.