Tag Archives: Inequality of Wealth

Synopsis of Capital in the 21st Century by Thomas Piketty

Slides from Capital in the 21st Century, Thomas Piketty

Piketty’s Thesis: Thomas Piketty’s thesis is that the rate of capital returns is greater than the rate of economic growth in developed countries. The message is clear “forget about income/salary inequality, take a look at wealth inequality!” Wealth is getting collected and retained at a faster rate than economic growth is occurring in the overall economy. This assertion is a much more sophisticated argument than the classic “the rich are getting richer.” Private wealth is increasingly concentrating in the hands of ‘the few’ which is troubling since it’s doing so at a faster rate than the rate of new wealth creation. It’s also troubling (if it’s true) that ‘the few’ are just lucky & riding compound interest into a promising future instead of creating true value through their own productivity. This trend has been tracked over the last 250 years and with increasing accuracy since developed countries have implemented income tax. Piketty’s challenge is to address the issue that wealth concentration will grow relative to economic growth in the future without any significant policy changes. Continue reading Synopsis of Capital in the 21st Century by Thomas Piketty