It’s the must-read book of 2014, but at over 500 pages packed full of descriptions of national income, stacked charts and explanations of the formula r>g, French economist Thomas Piketty’s tome on inequality isn’t exactly summer beach reading.
The Canadian Centre for Policy Alternatives wants to help you out. At a free event on June 25, the left-leaning think tank will bring together a panel of Vancouver-area economists to explain the book’s ideas and the impact it could have on public policy.
It’s not necessary to have read Capital in the 21st Century first to get something out of the discussion, organizers stress.
“I like [the book] a lot,” said Marjorie Griffin-Cohen, a professor in Simon Fraser University’s (SFU) department of political science.
“What to me is fascinating is that for the first time you have some real data on long-run information, not only about incomes but also about wealth. That is something we have had very little information about in the long run.”
The book shows that inequality has taken a u-shaped path over the course of the 20th century, dropping to its lowest point mid-century because of a combination of the economic shocks caused by two world wars, high economic growth rates and public policy, such as very high taxes on the highest incomes.
Today, inequality has risen to the same very high levels seen before the First World War, and shows no sign of stopping, writes Piketty. He identifies low economic growth and low population growth, combined with the move to reduce taxes starting in the 1970s throughout Western countries, as factors that have led to the growth of inequality.
What results, argues Piketty, is a society where inherited wealth becomes more and more important, while access to education and capital-making opportunities for those at the lower end of the wealth spectrum become more limited.
The book’s dissection of just what has happened over the course of the 20th century has resonated with economists and public policy makers — as well as spawned attacks from sources like the Financial Times.
“The book is worth reading because Piketty, more than almost any other economist operating today, works on what you might call common sense intuition about what is a reasonable level of inequality, what are the kinds of things we would expect out of the economy just because we’re regular people,” said SFU professor Geoff Mann, who studies the impact of high-level monetary policies on regional economies.
Griffen-Cohen and Mann will take part in the panel discussion.
While Canadians might be tempted to look south at the United States, a country with high inequality, and assume this country is more equal, that’s not the case, said CCPA economist Iglika Ivanova.
In a recent report, the Organization for Economic Co-operation and Development warned that inequality is growing in Canada, especially in the areas of housing, health, education and job opportunities.
As to how to bring about a more equal society, Piketty’s suggestion of a global tax on capital may be far-fetched. But there are policies that could be enacted in Canada, such as a tax on inheritance, that could be used to tip the scales, Ivanova said.
The CCPA's event, "Piketty-mania, inequality and you" takes place Wednesday, June 25 at 7 p.m. at SFU Harbour Centre. For more details, click here.
@jenstden
