Capital in the Twenty-First Century and the Problem of Inequality
February 18-20, 2016
In 2014, Thomas Piketty’s Capital in the 21st Century rocketed to the top of national bestseller lists. Its publication followed upon a series of critical economic events that drew attention—and affected lives—around the world. In 2008, the global economy teetered and crashed, destabilized by the bursting of the American housing bubble and by risky subprime lending practices. In 2011, spurred by a rising awareness of the difference between the 1% and the 99%, protesters set up camp a stone’s throw from Wall Street. In 2013, U.S. President Barack Obama called inequality “the defining challenge of our time.” Our seminar will examine Piketty’s claims, and the debate about the viability of 21st century capitalism that it has engendered.
Piketty rattled the economic community by arguing that inequality is inseparable from capitalism, and worse, that the gap between the have-quite-a-lots and have-nots will continue to widen unless global policy measures are taken. The gap, he argued, threatens the very democratic regime in which capitalism flourishes. According to Piketty, the West has thus far avoided the “Marxist apocalypse,” but the question as to how much longer remains open.
The book has generated a considerable amount of controversy within and beyond the field of political economy, in part because it struck at the core of one of the most fundamental economic debates regarding the role of government and policy in the ‘free’ market. According to Piketty’s formulation, overall growth in an economy will not increase the wealth of an entire nation. The invisible hand doesn’t function, and the positive effects of growth do not trickle down.
Piketty’s contention that global income and wealth gaps have steadily grown over centuries has been challenged by economists on the basis of both the book’s methodology and its data. Some have claimed that such gaps are supported only by data collected in first world countries like the U.S. and Great Britain. Others argue that he fails to account for the complexity of capital, while others argue that he places too much emphasis on the housing sector. When he’s calculating capital returns, does he take factors like depreciation into account? If his methodologies and data are open to critique, where does that leave his larger claims? Will the past actually devour the future, as he argues? This seminar will consider Piketty’s conclusions and critiques, and examine relationships between capital accumulation, instability, and inequality. In short, the seminar will examine the substance of Capital in the 21st Century and its detractors, using the book and its critique as a lens on the logics and politics of twenty-first century capitalism.
Speakers who will lead us through some of these problematic questions will include Todd Henderson (University of Chicago Law School), James Sparrow (Department of History), Jonathan Levy (Department of History), James Wilson (Department of Political Science), Paul Poast (Department of Political Science), and Robert Gulotty (Department of Political Science).