Thomas Piketty’s Capital in the Twenty-First Century is said to be the most important book published about political economy in our lifetime.
Thomas Piketty’s Capital in the Twenty-First Century is said to be the most important book published about political economy in our lifetime.
An English edition of the original French book hit the shelves this year and became a bestselling sensation around the globe. The French economist explores the progress of income and wealth distributions in advanced economies.
Piketty’s gripping style assures him a widespread audience. He engages with real world problems rather than confusing readers with challenging economic concepts.
Piketty’s book shows how inequality has increased significantly over the past 30 years by analysing the data of income distribution in different countries.
He finds that the salaries of executives in large firms have increased rapidly across the board.
“After the global financial crisis, inequality really increased in the developed world,” said Reg Rumney, Director of the Centre for Economics Journalism in Africa.
“It’s always been bad in developing worlds. South Africa has one of the highest inequalities of wealth in the world. The really big unfairness is the incredible gap between the top earners, the CEOs and the workers,” Rumney said. “It used to be a reasonable multiple, but that’s now like a thousand times.”
The rise of the very rich one percent has more to do with skyrocketing compensation and incomes rather than capital accumulation.
“The one percent story is so scary because it essentially means democracy is a farce and politics is controlled by small elite,” said David Fryer, Senior Lecturer at the Economics Department at Rhodes University.
“For example in the US, 40% of campaign contributions are made by the top 0.01%. Big money controls both major parties so they win both ways.”
Professor Gavin Keeton of the Economics Department at Rhodes University said that in South Africa’s case, inequality has also been the impact of the Black Economic Empowerment (BEE). “There a large number of people who have become very wealthy very quickly through BEE,” said Keeton.
“In the past, inequality was a racial thing, whereas now, we have extreme inequality amongst black South Africans as well. In developing countries it becomes complicated by what is the more important thing to address: poverty or inequality."
"Would you rather have less poor people and an unequal society or more equal society in which lots of people are poor?”
Keeton said. “I think in South Africa, the focus has been more on addressing poverty rather than addressing the problem of inequality.”
