Paul Krugman, a Nobel Prize-winning economist and leading critic of trickle-down economics, negatively reviewed a re-released edition of a 1997 book by Thomas Piketty. | PHILIPPE LOPEZ via Getty Images
It is not often that liberal economist Paul Krugman breaks publicly with Thomas Piketty, a renowned authority on income inequality. They are both among the world’s most prominent critics of trickle-down economics.
But on Sunday, Krugman panned a new English-language release of Piketty’s 1997 book, The Economics of Inequality. The book, translated from French by Arthur Goldhammer and published by Harvard University’s Belknap Press imprint, arrived on bookstore shelves Monday.
Krugman’s main critique of the new release is that it is outdated, failing to revise 1990s-era assertions about economic inequality, even as more recent research — including from Piketty himself — has discredited them.
“Let me be blunt: I don’t know how the decision was made to release this ‘new’ Piketty book in its current form, but it’s not at all the book one might have expected,” Krugman wrote in a review for The New York Times, where he has a regular opinion column. “It is, instead, a slightly revised version of a volume first published in 1997, when Mr. Piketty was in his mid-20s.”
Specifically, Krugman takes issue with Piketty’s re-published arguments that progressive taxation in developed nations has mitigated inherited wealth, and that insufficient education is to blame for earnings inequality. Krugman notes that Piketty’s own 2013 book Capital in the Twenty-First Century documents the degree to which taxes have failed to prevent a new generation of super-rich Americans from living off of inherited wealth. Their fortunes multiply as the value of capital, such as property or stocks, appreciates at a faster rate than the economy grows, Piketty’s research found. And sluggish wage growth among college-educated Americans since 2000, Krugman observes, has cast doubt on the idea that skills and education alone are enough to explain the wage gap.
Thomas Piketty, a French economist, who enjoys widespread recognition and prestige for his study of income inequality, released an English edition of his 1997 book, The Economics of Inequality, on Monday. | ERIC PIERMONT via Getty Images
Krugman’s disappointment with Piketty reflects the Parisian’s high standing in the world of contemporary economics. Piketty’s 2001 study, “Income Inequality in the United States, 1913-1998,” co-authored with economist Emmanuel Saez, exposed in greater detail than ever before, the degree to which wealth in the U.S. had once again become concentrated in the hands of a tiny percentage of the population.
After the 2008 financial crisis, Piketty and Saez’s work has had a disproportionate influence on the national discussion of income inequality. Their division of the population into the top 1 percent and the bottom 99 percent based on the increasingly polarized breakdown of wealth in the country, helped inspire the Occupy Wall Street movement’s rallying cry, “We are the 99 percent.” The term “one-percenter” is now widely-used shorthand for member of the monied elite.
By the time Piketty released his voluminous Capital in two years ago, he was already as close to a minor celebrity as an economist can hope to become. The new work was largely celebrated in academic circles for elaborating on previous studies of income inequality, and exploring the way politics and other forces had converged to shift wealth into ever fewer hands. To the amusement of many observers, the dense 700-page was a number-one seller on Amazon and sold out in many American bookstores.
Nowadays, Piketty is a public intellectual with a respected platform. Piketty made waves in June when he called on Germany to forgive Greece’s debt, telling German newspaper Die Zeit that Germany had “no standing” to lecture Greece about debt since the Allies forgave Germany’s debts after World War II.
If Piketty’s newly released book flops, it will likely not diminish his prestigious status. But it is no surprise that Krugman is wistful about the work of someone he admires.
“I’m sorry to be so negative about a book by such an important figure in our economic thinking,” Krugman concluded. “But releasing this youthful effort as if it were a new contribution does a disservice to readers, and I’d argue to the author himself.”
Piketty did not respond to an email requesting comment.