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'Karl Marx is back from the dead' wrote Ross Douthat in the New York Times Sunday Review about a man called Thomas Piketty. Nobel Laureate Paul Krugman called Piketty's blockbuster new book "Capital in the Twenty-First Century" as perhaps the most important of the decade. Rock star, genius and radical are among the string of other flattering adjectives being used in the international press to describe this 42 year old French economist who is being wooed reportedly by the White House.
Who indeed is Thomas Piketty? He was PhD by 22 and an assistant professor at MIT by 23. Since then he's held various chairs at premier academic institutes such as the EHESS, CEPR the ENC and is currently Professor of Economics at the Paris School of Economics. His research in the area of income & wealth distribution has for long been considered seminal, and fellow academics who've followed him through the years consider his work to be of high cerebral value.
But Picketty whose "Capital" was published last year in France with little pomp, truly shot to fame only post the rapturous response his book received in the United States after its late March release this year. And ever since he has become the new poster boy of economics - a cult figure almost. It is not just economists however that are lapping up his voluminous 700 page, analysis-heavy digest. "Capital" is currently sold out after 80,000 copies were bought in less than 2 months and has remained on Amazon's number one bestseller list for a while according to reports.
In "Capital" Piketty undertakes a mammoth task, analyzing data from 20 countries from as far back as 200 years ago, to tackle questions about income inequality in industrialized Western societies which he believes threatens to shake up the very foundations of democracy. As one op-ed put it, he seeks to "redefine capital after two hundred years of confusion". Among one of his key ideas in explaining the main drivers or inequity is "the tendency of returns on capital to exceed the rate of economic growth". He argues against traditional trickledown economics to say that the propensity of return on capital (assets, inheritance) to continue to remain higher than economic growth (or salaries of the labour classes) perpetuates imbalances in favor of the rich. The Guardian newspaper explains this in simpler terms: "The fact that rich kids can swan aimlessly from gap year to internship to a job at father's bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident: it is the system working normally" as a result of inherited wealth growing faster than earned wealth.
His solutions to the problem - a new progressive global tax on capital, or an 80% tax on high incomes as a redistributive mechanism - has had conservative critics (and there plenty) up in arms. But even they've been hard pressed to argue that the book is a work of extraordinary purpose, and could even perhaps "threaten" to reshape capitalism's agendas.
The press meanwhile is still coming to terms with how it must describe Piketty. The initial euphoria among headline writers led them to attach labels and make instant comparisons (Marx, Smith et al), but there is a growing sense that the real power of Picketty's work lies in the fact that it poses a challenge to "both to Marxism and laissez-faire economics". (New York Times).
And that explains in a nutshell why the book has become a topic of conversation not merely among a closed coterie of economists, but also on dinner tables of the privileged across the world.
