Capitalism: A System of Patrimonial Wealth

Thomas Piketty’s, Capital in the Twenty-First Century, is a sensation—an economics textbook, translated from the French, that has been on the New York Times best-seller list. It is an important work. If you ignore more than one hundred pages of notes, it is still a long but easy read.

Piketty, a prominent French economist and social scientist, uses rigorous logic and reputable statistics to dismiss the mainstream claim that capitalist markets are based on individual equality, and that great wealth is a fair reward for individual contributions to general well-being. He shows that capitalism in its logic and observable practice actually widens disparities between the super rich and everyone else.

The title of the book conjures images of Karl Marx’s Capital. But Piketty says he is not a Marxist; he does not call for the abolition of capitalism. He is a social democrat who explicitly rejects the top-down centralized state ownership of the twentieth century USSR. He looks to a more democratic alternative, arguing that economics, which he prefers to call political economy, should refocus on how best to meet human needs. He looks to cooperatives, community ownership, and more democratic control of workplaces.

The two Capitals have distinct starting points. Marx began with the commodity. He makes the case that exchange value is determined by labor time embodied in commodities, and that the wealth and power of capital come at the expense of labor. Although Marx grumpily dismissed campaigns to abolish market exchange as utopian, his focus on the commodity convinced many of his readers that opposing capitalism meant opposing commodity exchange.

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