Methodology in Capital in the twenty-first century: a "new-historical" approach to political economy

Abstract

This paper explores the methodological foundations of Thomas Piketty's recent book Capital in the twenty-first century. The current literature on Piketty's work lacks consensus as to which paradigm of economic thought Capital fits into (if any). In response to that literature, this paper argues that Piketty offers a new methodological direction for economic science in the form of an analytical 'new-historicism'. The central emphasis of this methodology is an analysis of general dynamic laws on three levels: distribution, institutions, and history. A new-historical methodological framework applies new analytical tools to old economic problems raised by Smith, Ricardo, Marx, and others. This distinguishes Piketty's framework from other contending paradigms or schools of economic thought, thereby alleviating confusion in the current literature surrounding Piketty's book.