Thomas Piketty Has Learned a Thing or Two About Capitalism
Thomas Piketty’s Why Save the Bankers? is the perfect accoutrement for a Bernie Sanders rally. At 210 pages, it’s easier to carry through a crowd than the economist’s 685-page best-seller of two years ago, Capital in the Twenty-First Century. Its title signals that it’s more irascible than the rather academic Capital, too, and more like Sanders when he’s on a roll: Why save the bankers, indeed?
Reading your copy of Why Save the Bankers? (Houghton Mifflin Harcourt, $26) is optional, of course. There’s circumstantial evidence from Kindle that few buyers of Capital made it past the intro. What you’ll find if you do dip in is a collection of 48 short pieces—the subtitle is And Other Essays on Our Economic and Political Crisis—originally published in Libération, the center-left French newspaper. The topics range from Piketty’s hopes for President-elect Obama, to the Greek financial crisis, to whether the single-currency euro zone can hang together. (Lots on that last topic, actually.) Some essays have italicized prefaces for the benefit of American readers who may not remember every detail of, say, the Liliane Bettencourt affair.
For readers of English, Piketty’s publication schedule is running backward. First came Capital, a heavy-duty book that forced people to wrestle with the implications of wealth inequality of “r>g” (don’t ask). Last year, after Capital’s surprising success, came the slightly more accessible The Economics of Inequality, which had preceded Capital in the French market. And now the journalistic Why Save the Bankers?, which uses columns spanning almost eight years, from 2008 to 2015.
Economists are still arguing over the data and conclusions of Capital, the book that vaulted Piketty to fame. In March, three authors from the Federal Reserve Board staff and one from the University of Pennsylvania presented a paper at the Brookings Institution saying that things aren’t as bad as he and others have made out. Wealth and income concentration at the top, they wrote, has risen by half as much in recent years as Piketty and two other French economists, Emmanuel Saez and Gabriel Zucman, estimated they would.
But even if you discount half of what Piketty claims, there’s plenty for the 99 Percent to be mad about. He offers a solution in one essay: “Taxes are the only weapon that can put a stop to the insane explosion of very high pay.”
As a columnist, Piketty is in roughly the same camp as Paul Krugman, the liberal Nobel laureate economist who writes for the New York Times. Piketty is less snarky and jokey, though; slightly further to the left; and more given to grand pronouncements such as “Left to itself, capitalism, because it is profoundly instable and inegalitarian, leads naturally to catastrophes.” Another difference is that Piketty occasionally explicates some complicated economic topic—like how to structure Social Security taxes—that Krugman would be likely to shunt off to his blog and label “wonkish.”
It appears that Piketty and his publishers are repurposing old material to profit from his worldwide fame. There’s nothing wrong with that. In fact, it demonstrates that he’s learned a lot about capitalism in his recherches—including how to exploit its wonderful wealth-producing potential.