The mechanism, it turns out, is as simple as three characters. “Capital in the 21st Century” is an effort to demonstrate not only that the data bear out these conclusions, but also to demonstrate the mechanism at work that’s making it happen: It would also mean that we’ve been on this course for centuries. If he is right, it would mean that the global economy is accelerating toward a future that’s incompatible with democracy. This is why Piketty’s book has ignited such a powerful reaction. What the data now show is that this period, which has been called “the long peace” and the “Pax Americana,” may not be a validation of western capitalism after all. With the end of World War II now 70 years in the past, it’s easier to view the general prosperity of the mid-20th century in the context of a larger sweep of history. But the underlying structure of the economy, the way fortunes are made and grown, remained largely unchanged since the Industrial Revolution and the Gilded Age. The conflicts that engulfed the early twentieth century destroyed capital, rearranged the global balance of power, then ushered in an age of unprecedented growth and technological progress in the developed West. Without a significant force to counterbalance rising wealth inequality, the research indicates, a capitalist economy will drift predictably toward oligarchy.ĭuring the last century, however, Piketty shows that a sufficient counterbalance to wealth inequality did emerge. Check out the infographic below for a longer explanation:Īs the data visualization above suggests, this is simply how capitalism works.

What makes this French economist’s conclusions worth global notice? The short answer is that Piketty and his research team amassed a mountain of data, much of it going back centuries, suggesting that the concentration of wealth in ever-fewer hands is not an anomaly or a recent development. (Watch Piketty’s TED Talk: New thoughts on capital in the twenty-first century.) That’s no small feat for a chart-heavy doorstop on “the dismal science” of economics.Ī fair portion of the book’s notoriety was due to its subject matter: wealth distribution, an intensely political topic if ever there was one. When Thomas Piketty’s “ Capital in the Twenty-first Century” was published earlier this year, it was something of a sensation.

Piketty capital in the 21st century