WMUA: Famous Economist Thomas Piketty visits UMass

Persistence pays off. By being the most annoying reporter at the annual Phillip L Gamble memorial lecture at UMass, where French economist Thomas Piketty spoke on his book Capital in the Twenty First Century, I got to ask the first question at the press gaggle, post-talk. I had prepped about five questions, in the hopes of getting to ask more of them, but a small mob formed around the man (who looked quite tired, he had flown in the day of, and was leaving the next day at 7AM), and I didn’t manage it. But I have to say, first question for a world famous economist is not bad for student media, especially given the reception we usually get.

Mr. Piketty’s book is quite substantial, it is nearly 700 pages, including the Notes, index, and other appendices. I did not manage to read the whole thing before the lecture, but I supplemented what reading I had done with every single review and criticism and adulation of the book I could find.

It’s rare for an economics book to make the kind of splash Piketty’s made. Many people have, rightfully I believe, attributed the source of some of his success to the fact that the decade of research of his book were prescient for the current curiosity and frustration with the distribution of capital.

Bragging rights. Photo cred: Dan Moreno.

Bragging rights. Photo cred: Dan Moreno.

But Piketty’s book, unlike much of the conversation surrounding the “1%” at the moment, focusses less on income inequality, or the difference between what the top is earning versus what everyone else is earning in the same interval, and focusses instead on wealth inequality. The main thrust of his argument (r > g) is that the rate of wealth accumulation is greater than the rate of growth, and so capital will move towards the top of society over time, because their money is growing faster than anyone else can save theirs.

His book has gotten a lot of heat, particularly from more traditional schools of economic thought. The most vicious was one in the Financial Times, which one can only read with an FT.com subscription, which Piketty responded to on the Huffington Post.

What stuck out to me most, however, in his talk was his focus on the lack of real data on wealth. Because we do not tax it, the way we do income, we don’t have a solid understanding of how much money or value (not all wealth is money, some of it is resources, such as land, oil, etc) is actually there. There is no national or international collection of that data. He joked more than once during the lecture, that part of the reason for his suggestion of a global wealth tax is to help create that data.

We can’t hope to talk about that which we know nothing about. Things that haven’t been measured, can’t be truly debated or discussed. (This is a question I will be returning to in the future.)

I think if I could go back and ask one more question, I would like to know how he feels being compared to Karl Marx.

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