Capital in the Twenty-First Century

“The distribution of wealth is one of today’s most widely discussed and controversial issues.”

Piketty introduces the central theme of his work, wealth inequality. He acknowledges that it is at the forefront of much political debate but also that it is emotive. As such, he hopes that an extensive presentation and analysis of the data on inequality will bring some clarity to this discussion.

“But by patiently searching for facts and patterns and calmly analysing the economic, social, and political mechanisms that might explain them, it can inform democratic debate and focus attention on the right questions.”

Piketty outlines the purpose of his work and the ideal aim of economics. It is not necessarily to provide all the answers to social and political problems. Rather, it is to provide some factual grounding to a possible democratic dialogue.

“The law of supply and demand then implies that the price of land will rise continuously, as will the rents paid to land-lords.”

This is the idea of 18th century economist David Ricardo. If the amount of land is fixed but the population grows, land prices, rent, and the landlords’ wealth will grow astronomically, endangering the social equilibrium. This prediction turned out to be false, but it reflects a worry, still present today, about wealth’s capacity to grow exponentially and the threat this presents to social order.