Capital in the Twenty-First Century by Thomas Piketty, translated by Arthur Goldhammer
I found this book much better than Piketty's Equality. Here he provides much more convincing analysis and thought on the concept of capital and his proposed fixes to the existing system. He is quite observant of the flaws in the current system as well as challenges of implementing changes. The communist system failed because the elimination of capitalism resulted in the loss of signals in the market. His proposal is to still allow wealth and accumulation, but to tax it in order to prevent excess. There is some detailed analysis of capital's use and flows. Those with little or no capital have difficulty accumulating more, while those with greater amounts can expect greater returns. Most places have a "wealth tax" that only applies to owned property. He would like to expand it to all types of capital. He wants this to global in order to reduce the incidence of scofflaws. There will be other challenges. What if wealth is entirely tied up in illiquid assets with inflated values? Will this further retard the accumulation of wealth, as only those with the means can manage the overhead of the tax and ways to avoid it?
The wealth tax is the conclusion to the book. However, there is plenty of discussion of experience with capital historically. War and inflation has wiped out savings many times in history. Governments have also come in and taken it away. The levels of accumulation now are some the greatest of all time. Will it last? The description and arguments are well thought out. He continually points out that many of the proposals should be made politically rather than by economists. The discussions are good, even if the final proposal has some flaws. His experience as a Frenchman who had some training in the United States provides a unique perspective.
