Thomas Piketty Is Pulling Your LegRoundup
I admire Thomas Piketty’s new book, Capital in the Twenty-First Century. I’ve even read it. But I fear that, in his interview with Isaac Chotiner, Piketty was putting on his American readers when he disclaims any interest in Marx’s ideas. He says he “never managed to read” Marx and that Marx’s ideas were “not very influential” on his work and that his book, unlike Marx’s Capital, is “about the history of capital” and that Marx’s Capital contains “no data.” These statements are uniformly false, and Piketty must know it.
In Capital in the Twenty-First Century, whose title is an allusion to Marx’s work, Piketty discusses Marx’s ideas more than those of any economist except, perhaps, Simon Kuznets, who in the 1950s pioneered the econometric techniques that Piketty has refined. He discusses Marx’s ideas more than those of John Maynard Keynes or any contemporary economist. He acknowledges to Chotiner that he read The Communist Manifesto, but in his books he cites passages and arguments from the first book of Capital and from book three, which Frederich Engels put together posthumously from Marx’s notes, and which is only read and discussed these days by aficionados.
Moreover, Marx’s Capital is the climax in a tradition, beginning with Adam Smith, and dubbed “political economy,” that factored in the historic role of the state in explaining the evolution and workings of capitalism. Piketty writes that he prefers to describe his own work as “political economy” rather than “economic science.” Marx’s work, Piketty knows, was about the history of capital: The last half of the book, parts four through eight, were a history of capital and capitalism.
Does Piketty really believe that Marx, whose colleague Engels had written The Condition of the Working Class in England, did not rely on data? Here’s what Piketty writes: “Marx was also an assiduous reader of British parliamentary reports from the period 1820-1860 … He also used statistics derived from taxes imposed on profits from different sources.” And he cites Marx’s use of “account books of industrial firms.” Piketty thinks Marx ignored some sources, but he clearly recognizes that Marx used data.
Perhaps, Piketty was on the defensive because of the pathetic review on National Review’s blog by James Pethokoukis from the American Enterprise Institute that was titled “The New Marxism.” Piketty is not a Marxist, but, like other European economists and some older American economists (the late Lawrence Klein, among others), he appears to have been engaged and influenced by Marx’s theories. (I once discovered several telltale formulations in the work of Raghuram Rajan, former IMF economist and University of Chicago professor and now head of the Bank of India. When I asked him, Rajan wrote back that he had read Capital and considered Marx “a great economist.”)...
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