The Emperor has no Capital

OK.  I have been asked and asked and asked and asked again what I think about Piketty’s Capital in the Twenty-First Century.  I have read it.  All the way through.  I have read more reviews of it than I think I have ever read about a contemporary book. The reviews have an interesting pattern.  The first wave of reviewers were the enthusiasts and the haters.  Neither set had read the book (more about that anon).  Then along came the economists.  They read the book and starting doing what economists do best; they take it apart into tiny little pieces and hold up each piece to see if it is a good piece.  No book ever survives that kind of scrutiny.  Capital did not survive that kind of scrutiny.  There are many reviews like that out there now—my favorite is Larry Summers’ review because Summers likes the book and takes it apart anyway.  My first temptation was to join the chorus here.  Lots of details in the book annoyed me; some things really annoyed me; some things I thought were interesting; some are really interesting. 

But, the sort of technical review is just treating this work like it was a technical bit of economics.  But, technical bits of economics don’t make bestseller lists and, more importantly, nobody ever asks me what I think about them.  So, how good is Capital?  Not as a technical paper in economics, but as a book.  I have yet to see it reviewed on that criterion.  Is this book any good? 

Sadly, the book as a book is terrible.  I have seen it praised for being readable, but the comparison set being used is articles written by economists.  So, let’s state up front: this book is much easier to read than an article selected at random in The American Economic Review.  Normal people (i.e., not economists) could, theoretically, read Capital.  But, compare this book to books normal people read and there is no doubt: it is an awful book.  Unreadable.  It is a slog, a real slog and the punchline is already known.

You don’t have to take my word for it, by the way.  The Wall Street Journal had an interesting article a while ago in which they used data from Kindle to estimate how far people got when reading books.  Clever idea.  Kindle records when people highlight passages.  So, you can look where people stop highlighting.  Best-selling novels: people are still highlighting  close to the end.  Nonfiction:  people don’t get as far.  Capital?  The lowest of the books they looked at: 3% of the book.  That seems about right—I suspect few people have read past page 25.  If someone made it to page 100, they must be determined.  If they read the whole thing, they are almost certainly an academic economist who is thinking about the technical economics and is determined to get through the whole book and has too much time on their hands.  Most economists don’t read regular books, so most economists may not know this, but anyone who says this book is really readable and good needs to read more non-economics books. 

Let me repeat—this is not an assessment of the economics in Capital; it is an assessment of the book as a book.  In other words, I would have liked this book vastly more if Piketty had just taken the interesting data and put it all in a 100 page article in the Brookings Papers on Economic Activity.   But, then, if he had done that, he wouldn’t be a star right now, so you have to admire his choice at that level.

How bad is the book?  Well, let’s take the much discussed fact that Piketty uses literary references in his work.  The fact that it is shocking that Piketty mentions literature shows how low economists have sunk in being generally readable.  Look! An economist who has read a novel!  Serious Carnival Freak Show material here!  But here is the dirty little secret nobody mentions when saying how exciting it is that Piketty mentions literature.  From the evidence of this book, one can safely conclude that he has read exactly one novel (Pere Goriot) and some summaries of a couple of Jane Austen novels.    Now, I am sure Piketty has read more novels than that.  But, for all the discussion about the literature in this book, it is surprising how little literary reference there is.

And even what literature there is mentioned was incredibly poorly used.  The endlessly repeated literary reference: there is a character in Pere Goriot who tell another character that it is better to marry a rich woman than to try to work your way up through the professions.  Piketty uses this quote to show that in the Old Days, the only way to wealth was to marry rich, that working people could never get rich, and so they all would be better off just marrying rich.  This, Piketty argues, is Bad, really Bad.  And, Piketty says, those Olden Times are Back.  Piketty doesn’t like that fact.  So he quotes that passage from Balzac.  A lot.  But, here is the thing: that character in Balzac’s novel is wrong.  Even if we grant that marrying a wealthy woman will make you richer than, say, going to law school ever could, that doesn’t mean you should skip law school.  Because, you see, there are a limited supply of  available wealthy women.  Sorry to break this to you, but not everyone can marry a wealthy woman.  If your main goal in life is to become wealthy and you have the chance to marry a multi-billionaire, then don’t hesitate.  No matter what era, no matter what else is going on in the economy, don’t hesitate.  But, again, sorry to break this to you, but not only are there few multi-billionaires available for marriage, the ones that exist do not want to marry you.  So, you might want to go ahead and work after all.  Piketty doesn’t seem to have enough literary sense to realize that just because a character in a novel says something, that doesn’t make it true.

A similar sort of thing happens with his economics.  There is a great deal of bluster in this book.  Bluster is not the sort of thing which is normal in economics articles, but this book is full of bluster.  Piketty knows the answer, and thus he sees evidence for his conclusions everywhere, even when it isn’t there.  Again, at one level this is the sort of technical stuff the economists are picking apart.  But, as a book, it makes the argument shockingly weak.  Anyone who actually read this thing with a critical eye would notice holes in the argument everywhere—there is way too much of the “As we all know” sort of thing going on.  As we all know, inherited wealth is immoral, but wealth you earn by working is moral.  You knew that, right?  Because, that is the sort of thing that is underlying the entire tone of this book.  And Piketty never pauses to even notice that simply because Piketty thinks wealth acquired by writing long economics books is moral and wealth inherited from your parents is immoral doesn’t in fact mean that this is true.  Unless, of course, Piketty is God and gets to set the moral standards for the rest of the universe.  What if, crazy thought, there is nothing inherently immoral about inherited wealth.  Then is there still a problem here?  That is the sort of question which Piketty doesn’t manage to address in 577 pages of text.

Anyway, I could go on and on and on.  I have lots of marginalia in this book.  But, as I said, watching economists be economists is a bit dull for the rest of the world.  So, instead I’ll say this.  If you haven’t read Capital, you are safe to skip it.  Prediction:  2 years from now, nobody will be reading this book, and if anyone remembers it, it will be as that big book nobody read that was all the talk for a brief time.  Ten years from now, some people will have a hazy memory of it.  Twenty-five years from now, it will be totally obscure.