Like seismic waves rippling outward after a tectonic shift, reverberations are roiling the economic-policy landscape after the U.S. launch of the groundbreaking new analysis by Thomas Piketty, the scholar from the Paris School of Economics whose landmark tome – “Capital in the Twenty-First Century” – has newly jolted the economics profession.
Any Washingtonian or World Bank Group staffer who somehow missed the news of Piketty’s celebrated series of speeches and seminars last week – in Washington, New York and Boston – received an unmistakable signal on Tuesday about what an important intellectual breakthrough Piketty has achieved. President Jim Yong Kim, opening his post-Spring Meetings townhall in the Bank's Preston Auditorium, led off his remarks by first citing – not the ambitious organizational changes occurring within the Bank Group, or the major shift under way in the International Monetary Fund’s internal policy debate – but the semiannual conference’s focus on the issue of economic inequality. Noting that he was already about halfway through Piketty’s “Capital,” President Kim thus sent a clear message that the skewed global distribution of wealth, as analyzed by Piketty and others, should be top-of-mind for policy-watchers at the Bank and beyond – indeed, at every institution that hopes to promote shared prosperity.
Piketty’s scholarship is now receiving widespread applause as a landmark in economic analysis, and is being recognized both for its “exhaustive fact-based research” and its sweeping historical perspective. More of a patient dissection of hard data than a political roadmap, Piketty’s book has quickly become the subject of multiple praiseworthy reviews, notably in the New York Times and the Financial Times. One usually level-headed Bloomberg View analyst, recoiling from the “rapturous reception” accorded to the book, may have gone slightly overboard this week in asserting that Piketty's insights had been greeted by American liberals with “erotic intensity.”
Predictably, Piketty's book has also quickly become the target – “Piketty Revives [Karl] Marx,” blared a Wall Street Journal headline; “Marx Rises Again,” warned the New York Times’ lonely conservative scold – of the whack-a-mole ideological purists in laissez-faire Op-Ed columns, who forever seem tempted to equate modern-day liberalism with long-gone Leninism. Eager to publish denunciations of any idea, however modest, that might justify (heaven forfend) tax increases on stratospheric income-earners and the top-fraction-of-the-One Percent, the free-market fundamentalists on the Wall Street Journal’s editorial board – unabashed cheerleaders for plutocracy – have opened up one of their trademark barrages via their Op-Ed columns (“This book is less a work of economic analysis than a bizarre ideological screed”; “The professor ought to read ‘Animal Farm’ and ‘Darkness at Noon’ ”). The Journal's jihad clearly aims to demean or discredit anyone who might flirt with such Piketty-style notions as restoring greater progressivity to the tax code. (Egad: Progressive taxes? Next stop: Bolshevism.)