Piketty
makes an exhaustive case for his argument that the return on capital
has historically and consistently been significantly higher than the
rate of growth in the economy and that, unchecked, this will lead to
greater and greater concentrations of private wealth at upper 1/10th
(decile) and 1/100th
(centile) of society. At 655 pages (including the extensive and
substantive endnotes), it is an exhausting study as well. His focus
on Europe, while natural for a French economist, will put off many
American readers who have not followed the turmoil and foibles of the
Eurozone since 2008. In the end, Piketty's solution, a global (or at
least widely-based) progressive tax on capital strikes me as both
effective and politically impossible.
As
someone who lived in a tax haven for a number of years, and examined
the paucity of the nominal returns on capital hidden away there, I
was most delighted by the passage on pages 521-2, where Piketty notes
that bank secrecy is most plausibly explained by the haven's share in
the illicit gains when its clients exploit the secrecy to avoid
their fiscal obligations. Piketty calls this “outright theft.” I
would compare the tax havens of the 21st
century to the pirate havens of the 17th
century – profiting at their neighbor's expense, while contributing
nothing of value.
Capital is
one of the most important books of 2014, but a condensed version
would be more accessible, while still conveying the salient points
that have contributed to a wider discussion of income inequality.
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