Thomas Piketty's Capital in the Twenty-First Century has been getting a lot of attention since it's French publication late last year. It's been out in English for several months now, and my copy is sitting on my desk as we speak. The Guardian has a good article summarizing Piketty's argument. The conclusion:
The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war. Piketty fears a repeat. His critics argue that with higher living standards resentment of the ultra-rich may no longer be as great – and his data is under intense scrutiny for mistakes. So far it has all held up.
Nor does it seem likely that human beings' inherent sense of justice has been suspended. Of course the reaction plays out differently in different eras: I suspect some of the energy behind Scottish nationalism is the desire to build a country where toxic wealth inequalities are less indulged than in England.
The solutions – a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax – are currently inconceivable.
But as Piketty says, the task of economists is to make them more conceivable. Capital certainly does that.
I am reminded of Karl Polanyi's remark in The Great Transformation that socialism is the self-defense of society against the economy. This is the main reason I still call myself a socialist.