He has kept writing since his blockbuster mostly misunderstood book Capital of a decade ago. He has kept writing.
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Good god, what a horrible introduction to the actual interview content. It read like the author was trying to namedrop every inside baseball intellectual sub-camp in French politics and intellectual debates over the last 50 years to show how hip and jaded he was. Came this close ------>||<------- to skipping the actual interview.
The actual point of the interview was to discern how Piketty’s thinking or his presentation of it has evolved since his famous best-selling 2014 book made a simple point:
If the rate of return on capital (r) is exceeding the larger average rate of growth in the economy (g), it inevitably drives wealth to the upper ranks and triggers massive wealth inequality. Any proposal to solve problems stemming from these inequalities that doesn’t factor in this basic aspect of “economic physics” will fail.
The interviewer asks Piketty a key question… Have major western democracies moved on from the prior form of capitalism they were practicing in the 20th century to some new form of technofeudalism? (That term isn’t really defined…)
Piketty believes the combination of a pandemic and looming danger from climate change have re-emphasized with many western governments the value in maintaining active participation in re-engineering healthcare systems, energy grids, education, etc.
Unfortunately, Piketty’s response doesn’t actually seem to address the original question or tie any answer to it back to his prior r>g ==> inequality thesis. His r>g ==> inequality formulation isn’t unique to our current state of technical evolution. (Piketty isn’t making this argument, I’m just stating this to clarify my point…) His formulation holds true over generations because inevitably technical innovations feed on themselves and the gain of going from horse to steam was less than going from telegraph to telephone which was less than going from train to auto, from tube to transistor, from turboprop to jet, copper T1 to fiber DS3, dial-up to DSL, etc. Technology evolution is essentially exponential in its impact on productivity.
Any time a factor of change is exponential, it becomes a redistributive force for wealth to those controlling the exponential factor. While this has been true since Og spent three months in a cave smoothing out the first wheel, it could be argued that current technology trends are MORE exponential and MORE re-distributive updward because many new technologies are ALGORITHMS and lack the traditional inertial costs of requiring a new tool to be physically stamped out of metal, shipped on a train to 300 cities and bought by millions of users with a physical visit to a store. An algorithm can be nearly instantly adopted and begin accelerating other wealth producing processes.
The problem – as I see it – is western democracies are still regulating these new technologies and the businesses that result from them assuming their growth exponent is more traditional and inertial in nature. Countries have let “the FAANGs” of the world (Facebook, Apple, Amazon, Netflix, Google) get a fifteen year head start ahead of regulators when the unique problems caused by the scale of these firms should have been evident as far back as 2010.
Catching up with where democracies need to be with the regulation of firms with lighter-weight cost structures and INCREDIBLE market share and revenue becomes even more difficult when domestic political debates are distracted by bread and circus affairs. Catching up becomes VASTLY more difficult when authoritarian governments are leveraging the same technologies to purposely create those bread and circus distractions amid democratic countries and delay their recognition of the threats posed by those authoritarian governments.
WTH
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WTH – superb summary that I was too tired (lazy?) to make.
I will only add that in Piketty’s books since Capital he has deepened his original analysis at the same time he has broadened it to address historical variants (what was capital in previous eras, etc.) and current and future extensions.
He is a fascinating scholar, and most commentary over the last decade, both from left and right, has been too glib. I feel the same way about Fukuyama, who certanly was not proclaiming an End to History in the normal modern sense of “One Damn Thing After Another”, but rather in a (perhaps deeper or perhaps delusional) Platonic/Herodotidian/Hegelian sense.
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And one of the most “unread” books. I remember reading an article about collecting data from eBooks and people using the highlight function. The later in the book that people highlighted quotes, the more likely the book was to have been completely read. His blockbuster significantly ran out of highlights half way through.
I never bothered reading it, not my cup of tea.