Piketty Research Articles

Income Distribution and the Elasticity of Substitution in the Works of Joan Robinson

ABSTRACT Independently devised by John Hicks and Joan Robinson, the elasticity of substitution (σ) plays an important role in mainstream theories of inequality. This paper examines the role of σ in Robinson's writings, charting the differing ways in which she used it to examine questions of distribution. Robinson initially applied the concept to examine distribution in a Keynesian framework, proceeding to downplay its importance later on in spite of having played a central role in its formulation. Her criticisms of the nature of neoclassical production functions led her to dismiss mainstream theories of distribution as tautological, while seeing σ as an expression of the potential for rising profit shares under full employment. The use of a single parameter such as the substitution elasticity in mainstream frameworks neglected the important role played by investment and institutions, drawing focus away from an understanding of the ‘rules of the game’ that determined distributive shares in capitalist economies. Given the primacy of σ in discussions today — in textbooks and in the works of economists such as Thomas Piketty — her writings offer an important critique of established frameworks, while also advancing alternatives that stress the role of institutions and class conflict in modern economies.

The Dynamics of Disparity: A Comprehensive Analysis of the Causes and Consequences of Income and Wealth Inequality and Policy Interventions for Mitigation

In today's global economy, economic disparities remain a pressing issue, persisting across different societies. This paper explores the causes, impacts, and potential policy interventions to address income and wealth inequality. The analysis draws on insights from prominent economists such as Darren Acemoglu, James A. Robinson, Joseph E. Stiglitz, Branko Milanovic, Thomas Piketty, and Emanuel Saez. According to the study, globalization, automation, and labor market dynamics are key economic factors driving inequality. In addition, political and social factors, including tax policies, governance models, and access to education and healthcare, significantly impact economic distribution. The consequences of inequality are multifaceted, affecting economic growth, social mobility, social health, and political stability. Furthermore, this paper discusses various policy interventions, such as progressive taxation, improved access to quality education and healthcare, and more robust social safety nets, as potential solutions to mitigate the adverse effects of economic disparities and promote a more equitable distribution of wealth.

Legal-economic fragilities in contemporary thought. How to explain inequality: Thomas Piketty's contribution

For Piketty finally, we have the political proposal of inclusive liberalism on the field to counter the enormous inequalities caused by the unbridled neoliberalism that characterizes the globalized world of our days. The current of liberal thought defined as embedded liberalism, which is opposed to uncostrained liberalism unfettered. We have to understand if inclusive liberalism accepts the classic policies of European social democracies, without which true social inclusion is difficult. As long as there are no serious proposals for a redistributive policy of wealth, on social justice, the parties of the traditional left will lose support. The challenge represented by the social question inequality evidently implies the totality of social life.

The Ethical Embeddedness of the Economic Inequality Debate

AbstractHow do scholars formulate arguments about economic inequality? What is the role of empirical analysis? In what ways, if any, is the debate informed by ethical considerations? In this paper, we address these questions by evaluating one of the main arguments in Thomas Piketty’s 2014 book Capital in the Twenty-First Century, along with its endorsements and rebuttals. Applying Stephen Toulmin’s model of arguments to Piketty unearths a complex argument structure that must be understood for an evaluation to be possible. Of particular importance are the warrants that Piketty used to justify his conclusions from the empirical material. Our analysis revealed that the most influential rebuttals were targeted not at Piketty’s empirical inferences but the way he used these inferences to justify his claims. We also found value judgments to be an essential part of the justification process, making Piketty’s claims ultimately embedded in ethical considerations. We conclude that value judgments are intrinsic to scholarly arguments not only in economic inequality debates but also more broadly.

Assessment of the Cost of Capital of the Southern Regions of the Central Federal District

Relevance. The assessment of assets located in a specific territory is an important methodological and practical task.The purpose of the article is to adjust Thomas Piketty's methodology for assessing regional wealth, taking into account the peculiarities of Russian accounting and statistical accounting and applying the adjusted methodology to the assessment of the cost of capital in the southern regions of the Central Federal District. The obtained estimates of the cost of capital for the Russian Federation as a whole are compared with Piketty's estimates as a benchmarking. The purpose is to assess the physical in the Central Federal District and seven southern regions of the Central Federal District of the Russian Federation for 2021. Objectives: to develop methods for assessing physical capital, taking into account the criticism of T. Piketty's methodology and eliminating its shortcomings; to assess the cost of physical capital of enterprises, organizations, housing, land and savings in the Central Federal District and seven southern regions of the Central Federal District of the Russian Federation.Methodology. The article was prepared within the framework of Thomas Piketty's capital valuation paradigm, adjusted to take into account the author's vision of the problem.Results. Quantitative estimates of the cost of physical capital in the Central Federal District and seven southern regions of the Central Federal District of the Russian Federation have been obtained.Conclusions. Piketty's methodology provides an underestimate of the cost of physical capital at the level of the southern regions of the Central Federal District of the Russian Federation. Underestimation is taking place in the assessment of the value of land, capital of enterprises and organizations and the value of housing stock. The highest cost of physical capital in the southern regions of the Central Federal District of the Russian Federation is in Voronezh (5,238 trillion rubles) and Belgorod regions (4,255 trillion rubles), the lowest is in Bryansk (1,772 trillion rubles) and Oryol (1,340 trillion rubles) regions. The ratio of the cost of physical capital in the southern regions of the Central Federal District of the Russian Federation to the gross regional product varies in the range from 5.16 (Tambov region) to 3.14 (Belgorod region). The average ratio of capital to GRP in the seven southern regions of the Central Federal District is 3.96, which corresponds to the global average.

Inequality Without Class

ABSTRACT: An academic journal article on the technicalities of tax data is not usually cause for much excitement. Yet at the end of last year, one such publication in the Journal of Political Economy set #Econtwitter afire with debate, and prompted a full column in the Economist. The paper, by Gerald Auten and David Splinter, took aim at the famous studies on rising inequality conducted by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. If one employs different assumptions, Auten and Splinter argued, post-tax income inequality in the United States appears not to have risen much since the 1960s. While Piketty and his collaborators systematically challenged the findings, their detractors were quick to the draw. "The Piketty and Saez work is careless and politically motivated," sniped James Heckman, a Nobel-winning Chicago School econometrician.

The vision of institutional reforms: Capital and Ideology by Thomas Piketty

The article is a polemic with selected considerations from Thomas Piketty’s Capital and Ideology. As a basis for future-oriented inquiry, Piketty takes inequalities from both the economic and sociological (especially educational) sphere, along with their sources and ways to address them. The book aims to present Piketty’s vision of a just system and the mechanisms to ensure its functioning. I focus on systemic issues, in which I view a discrepancy between Piketty’s commendable intentions and the objective possibilities of creating a coherent vision of transition.

Polanyi, Piketty, and the Twenty-First Century Market Economy

Both Karl Polanyi in The Great Transformation and Thomas Piketty in Capital and Ideology make use of the long historical roots of our current high levels of inequality and disappearing safety net, in an effort to understand the ideological basis of, and turmoil within, market societies. Both Polanyi and Piketty decry the erosion of the social institutions that maintained social stability and their replacement by market institutions. In this article, we provide brief overviews of the arguments of both Polanyi and Piketty and then use their framework to analyze current economic and social developments.

Internet Economics: Writing on the Virtual Wall

Most economic literature on the internet views the internet through the lens of private markets. However, the internet, concretely, as a collection of software protocols, is intrinsically a public good, as economists define them. The article reviews a selection of conventional approaches to the internet; the focus of which, on markets, is an example of Alfred North Whitehead’s fallacy of misplaced concreteness. On closer analysis, these markets turn out to be traditional business activities enabled by internet applications, which are themselves not market “goods.” An alternative analogy is that of a virtual public square, the walls of which are used as a communal bulletin board. This image is actually a close representation of the way that the early internet was developed. A number of policy conclusions are drawn from this contrasting approach. The public good character of the internet needs to be protected against private interests, including the current group of internet oligarchs. In line with Thomas Piketty’s work on the extreme levels of income and wealth inequality that have evolved in the global economy, some small measure of correction can be assisted by making the private appropriators of the public good pay for the services that the internet provides to them.

Income and Wealth Inequalities in Thomas Piketty’s Considerations

Abstract (Purpose) The purpose of the study is to present Thomas Piketty’s demand view on the issue of growing income and wealth inequalities in highly industrialized countries. It should be indicated here that in his research, Piketty not only explains the mechanism of growing inequalities, but also defines the tools to tackle inequalities (a combination of theoretical and pragmatic views). (Methodology) The aim of the study is achieved through the literature review method as well as the descriptive methods, complemented by comparative analysis. (Results) Piketty’s considerations clearly show that the problem of income and wealth inequalities will not disappear spontaneously, so market automatism will not only not eliminate their causes, but also will not create conditions for a fair distribution of production outcomes between capital and labor. Therefore, reducing the level of inequality requires a return to the concept of the welfare state. (Contribution to the discipline) The conducted analysis may become part of a larger research project showing the relationship between the level of economic development and its impact on the scale of income and wealth inequalities.

The Mainstreaming of Global Inequality, 1980–2020

Abstract This article maps the conceptual history of global inequality from its marginal status in the 1980s, its minute mainstreaming within research and globalization discourse from the mid-1990s to the late 2000s, until its popularization, politicization, and “economization” in the wake of the 2008 financial crisis, recession, and the publication of Thomas Piketty's Capital in the 21st Century in 2014. Asking when, why, and how global inequality became a key concept, it draws upon quantitative and qualitative analysis of global inequality in scientific articles, books, and public media. It traces transformations in the term's temporal and spatial meanings and situates these in the contexts of rising within-nation and declining between-nation inequality, inequality research, inequality in public media, and broader discursive fields.

(In)equality in the Past and in the Future. A View by the Authors of “the Most Influential Books on Economic History in the New Millennium”

The Paris School of Economics and the École des Hautes Études en Sciences Sociales organized a roundtable in May 2023 to discuss the books The Great Divergence by Kenneth Pomeranz and Capital in the Twenty-First Century by Thomas Piketty. According to the organizers of the discussion, these are two of the most influential books on economic history of the new millennium, offering complementary perspectives with a focus on national economic differentiation and social inequality. We present an analytical overview of the discussion by a participant of that meeting — Ivan Smekalin.

6Economic Criticism

Abstract This essay reviews recent work in economic history, covering critical topics that span the history of inequality, the violence of primitive accumulation, and the Ukraine–Russia war. Following the introduction, this chapter has two sections: 1. Thomas Piketty and the Great Redistribution (1914–1980), and 2. Helen Thompson and Twenty-First Century Disorder. The conclusion considers sections 1 and 2 in the context of both Marx’s language of cyclical overaccumulation and overproduction and Alison Shonkwiler and Leigh Claire La Berge’s theoretical concept of ‘capitalist realism’.

How do wealth–income ratios react to slowing growth in the long run? On Piketty’s second fundamental law of capitalism

Thomas Piketty and some of his coauthors have suggested an economic law named the Second Fundamental Law of Capitalism by Piketty, implying that a long-lasting and considerable growth slowdown will cause substantial increases in wealth–income ratios in the long run. Critics have pointed out that the reaction of wealth–income ratios depends on the reaction of saving/investment rates and, in particular, that sufficiently large decreases in these rates in response to a growth slowdown will revert the direction of Piketty’s law. We conduct a theoretical investigation in a framework that endogenizes the reaction of saving rates in a standard way and find support for a version of Piketty’s Second Law based on an exogenous gross saving rate, but not for Piketty’s original version assuming an exogenous net saving rate. Consequently, the reaction of wealth–income ratios to a substantial growth slowdown will be smaller than suggested by Piketty’s version of the law, but in the same direction and still substantial.

Thomas Piketty. A Brief History of Equality, translated by Steven Rendall

Thomas Piketty. A Brief History of Equality, translated by Steven Rendall

Gethin AMORY, Clara MARTINEZ-TOLEDANO, and Thomas PIKETTY (eds), Political Cleavages and Social Inequalities: A Study of Fifty Democracies, 1948-2020

Gethin AMORY, Clara MARTINEZ-TOLEDANO, and Thomas PIKETTY (eds), Political Cleavages and Social Inequalities: A Study of Fifty Democracies, 1948-2020

Capital or Democracy? A Review of Thomas Piketty's Capitalism and Ideology

Thomas Piketty's Capitalism and Ideology is the 1150-page 2020 sequel to Capital in the Twentieth Century, a best-selling publishing sensation in 2014 that described the inexorable growth of inequality under capitalism. Capitalism and Ideology develops the thesis of the earlier volume into a micro-historical account of the development of property-based societies. It proposes a strong programme for their reform in the direction of a renewed social democracy. In offering an historical account of the development of capitalism it enables us to reopen debates about political futures, and to locate proposals for change within this trajectory: it historicises the present as a way of arguing that things could be otherwise. Possibly because of its explicitly socialist political argument, it has not so far received the attention and acclaim of its predecessor.

Addressing the rise of inequalities: How relevant is Rawls's critique of welfare state capitalism?

Addressing the rise of inequalities: How relevant is Rawls's critique of welfare state capitalism?

Democracy Declined: The Failed Politics of Consumer Financial Protection by Mallory E. SoRelle

Ballooning wealth inequality is perhaps one of the greatest challenges for our current political age. French economist Thomas Piketty warned of inequalities that “radically undermine the meritocratic values on which democratic societies are based.” (Capital in the Twenty-First Century, Cambridge, MA: The Belknap Press of Harvard University Press, 2014, 1) Although the stock market dominates attention, consumer finance is also an important component of socioeconomic health. Indeed, 77 percent of Americans had some type of outstanding debt by the 2008 financial crisis (11). Mallory E. SoRelle argues in Democracy Declined that although credit has become indispensable for American consumers, few government protections exist from predatory products. While staples like food and household appliances must conform to government-mandated safety standards, many financial products like credit cards, bank accounts, and loans rely on informational disclosures alone. However, disclosures are so lengthy and complicated, SoRelle writes, they are essentially meaningless, leaving consumers at various income levels vulnerable to a debilitating cycle of debt.

Inequality Regimes in Africa From Pre-Colonial Times to the Present

ABSTRACT While current levels of economic inequality in Africa receive ample attention from academics and policymakers, we know little about the long-run evolution of inequality in the region. Even the new and influential ‘global inequality literature’ that is associated with scholars like Thomas Piketty, Branko Milanovic, and Walter Scheidel has had little to say about Africa so far. This paper is a first effort to fill that void. Building on recent research in African economic history and utilizing the new theoretical frameworks of the global inequality literature, we chart the long-run patterns and drivers of inequality in Africa from the slave trades to the present. Our analysis dismantles mainstream narratives about the colonial roots of persistent high inequality in post-colonial Africa and shows that existing inequality concepts and theories need further calibration to account, among others, for the role of African slavery in the long-run emergence and vanishing of inequality regimes.