Problems With Piketty

Even as his latest book has just been published in the U.S. (March 10th), I already have problems with Piketty's portrayal of human capital as not truly representative of wealth - something which is probably no surprise to my readers. The paradox is all the greater, in that he emphasizes the spread of knowledge as being more important than free trade, for the evolution of populations. Why would someone who believes the spread of knowledge is more important than free trade, insist just the same that it is only the assets and product producing capacities of free trade that represent capital? Hmmm, more homes and factories, please - I suppose. Why even bother with GDP measures if they don't really count?

At a time when dialogue is needed to move forward the ideas of what wealth represents, I'm not convinced this book is going to provide the kind of discussion that can take nations into more positive directions. The only reason that knowledge use time increments cannot be counted as capital in the present, is that people are not free to use them at such, in the multiple economic contexts where they are sorely needed at all levels. How could nations with low amounts of savings for investment overcome the problems of extractive governments or firms, otherwise?

Clearly I'm going to have to purchase his book and read the whole thing, before I really know how to respond to his portrayal of wealth capacities at length. But respond I will, and to no small degree. Thankfully I was able to get the Economist link this time, in which Ryan Avent provides descriptions of the first chapter of Thomas Piketty's "Capital in the Twenty-First Century".

It is vitally important to get past dialogue which - if given the chance - is going to get bogged down in needless bickering over inequalities. So long as knowledge use is treated as a hidden form of wealth that can be appropriated such as minerals or valuable destinations, we're going to be stuck with the worst inequality of all. That is, a static pie of wealth that everyone continues to fight over, instead of the knowledge of the 20th century which everyone had fully expected to grow and flourish in the 21st. I will continue to look at a number of aspects regarding this problem in following posts.