Thomas Piketty’s Capital in the Twenty First Century. Stephan Kaufmann

      Contents

      1Pikettymania

      2The Prelude: Redistribution, Inequality and Debt Crisis

      3The Book

      4Hype and Critique

       5Capital in the Twenty-First Century – What to Make of It?

       Notes

       Index

       CHAPTER 1

       Pikettymania

      For unto every one that hath shall be given, and he shall have abundance; but from him that hath not shall be taken away even that which he hath.

      (St Matthew 25:29)

      The Gospel of St Matthew tells the story of a man who goes abroad and leaves his fortune to his servants. He gives one five talents of silver, he gives a second two talents and gives a third one talent. The first two servants engage in trade and double their silver. The third servant, however, buries his talent. When the master returns, he praises the first two for their faithfulness: ‘Well done, thou good and faithful servant: thou hast been faithful over a few things.’ He accuses the third of being an ‘unprofitable’, ‘wicked and slothful servant’, and gives the order: ‘take therefore the talent from him, and give it unto him which hath ten talents’.

      For unto every one that hath shall be given, and he shall have abundance; but from him that hath not shall be taken away even that which he hath. (St Matthew 25: 28–29)

      The ‘Matthew Effect’ is known not only in the field of sociology. In the vernacular it is also known as ‘Der Teufel scheißt immer auf den größten Haufen’ (money makes money, literally: ‘the devil always takes a shit on the biggest pile’); the rich get richer; success leads to success; it always rains where it’s already wet. Nobody has ever got rich through hard work, says another maxim, and an English saying points the way to the alternative: money makes money.

      That which one can regard as either a suspicion or knowledge based upon experience was proved by the economist Thomas Piketty. At least, that is what he intended to do. In a huge book with vast quantities of statistical material – which, thanks to the expansion of the financial bureaucracy as a result of the bourgeois revolutions, deals primarily with the last 200 years – he depicts how, when and why the distribution of wealth has become, and is becoming, increasingly unequal.

      When Piketty’s book Capital in the Twenty-First Century was published in France in the summer of 2013, it had a friendly reception. However, it did not get very much attention.¹ The hype first began with the American edition in March 2014, when Paul Krugman, winner of the Nobel Prize in economics in 2008, celebrated Piketty’s work as ‘the most important book of the year – and possibly of the decade’. It was ‘a book that will change both the way we think about society and the way we do economics’. Martin Wolf, columnist for the British Financial Times, declared it to be an ‘extraordinarily important book’ that nobody should ignore. The German economist and so-called ‘Wirtschaftsweise’, or ‘economic sage’ Peter Bofinger praised the book and attested that Piketty had succeeded in finally putting the urgently necessary discussion about the future of the market economy at the centre of public attention.

      An economist as rock star: Piketty as cover boy

      For a long time, the book occupied the number one spot of the Amazon bestseller list, the first printing sold out quickly, and it is supposed to have made the author a millionaire. Piketty’s first reading tour through the United States ‘resembled that of a rock star’. He presented his findings to the United Nations, the International Monetary Fund (IMF) and the senior staff of US President Obama. Large newspapers in Europe and America devoted much space to the book and vied for interviews in which Piketty could elucidate and defend his theses. The only thing missing from the rock star comparison were tour dates on his website.

      The hype is remarkable, since alongside the praise it was maintained that Piketty advanced a ‘most simplistic thesis’ and provided evidence in his book for ‘that which the people have known for a long time’. And not just ‘the people’; numerous empirical investigations in the past had demonstrated the divergence between rich and poor in the industrialized countries. So if Piketty was merely writing what was already well known and proven, what was all the excitement about? In order to explain that, one first has to consider the context in which the book was published. And then, one has to consider the content of the book.

       CHAPTER 2

       The Prelude: Redistribution, Inequality and Debt Crisis

      The

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