Summary of New Thoughts on Capital in the 21st Century

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Economist Thomas Piketty has the honor of being the author of one of the least-read bestsellers of recent times. In this illuminating lecture, Piketty efficiently summarizes the main themes of his 700-page masterwork and makes them easily accessible for a general audience. getAbstract recommends this oration to all those daunted by Piketty’s book but nonetheless intrigued by what the data say about wealth concentration and income inequality through the ages.

About the Speaker

Economist and professor Thomas Piketty is best known for his 2014 book, Capital in the Twenty-First Century.

 

Summary

Historical data show that the return on capital exceeds the growth rate of an economy (or, in other terms, r > g), and that leads to growing concentrations of wealth. Until the Industrial Revolution, growth rates were negligible, while rates of return were about 5%, which led to the accumulated fortunes of the landed aristocracies that dominated in the preindustrial age.

While growth rates increased during the Industrial Revolution, returns on capital also increased, leaving the relative levels largely unchanged. The shocks of the 20th century – two world wars, a depression and the introduction of progressive taxation on incomes...


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