Saturday, October 4, 2014

Capital in the 21st Century

Version 0.3

Reactions to and Minor Flaws Found in Capital in the Twenty-First Century, the English translation of Capital au XXIe Siècle by Thomas Piketty

Most of this review is another dictation while walking. Just a stylistic caution, though I've tried to polish it up afterwards...

This book offers a very high level perspective on economics. It's kind of in the mold of the grand history books like Guns, Germs, and Steel. The central thesis is essentially tracing the long-term growth rates and capital accumulation against demographic transitions and concentration levels of wealth. Capital is treated quite broadly, even including a description of slave-based economies. The time scale is much larger than is usually encountered in most economics books, but the author actually regards this book is kind of an introductory textbook for general readers. In contrast the website contains a lot of much more detailed data and explanations about that data and how it was analyzed.

This approach is in itself is interesting economic model for academic publication. In essence, the sales of the book become a funding resource for the research and the website becomes an inexpensive distribution channel for much more information than is worth killing the trees for. There's also the obvious advantage that the website is dynamic and can easily grow with new data and new links.

When I went to the website, it was because I had found a number of minor typographic errors in the English addition. I was hoping to find a list of errors to check how closely and accurately I read, but unfortunately I was unable to find any errata (even though they'd been promised in the book). Notwithstanding, overall I would say was well translated.

My largest reservation about the translation was actually about the frequent literary allusions. Perhaps this is the norm in French academic writing, but it felt out of place and that even seemed to weaken his arguments in places. If this approach is a standard tactic or usage in French academic writing, then I think the translation should include some kind of disclaimer to that effect. He should only be citing the literary references because they match so well with his observations and calculations, thus indicating that the most popular and successful authors were truly reflecting the realities of their times.

A less serious translation problem involved the word "rent", which apparently has negative connotations in French. It seemed that the translator basically went all literal in this section, and the word "rent" simply does not seem to have such associations in English. I spent a while trying to imagine a better translation, such as "coupon clipping" or "dividend", but I think this is just not translatable into English. Therefore I think the correct approach required a bit of meta-translation to explicitly present and explain the negative feelings from a French point of view.

An even less serious translation problem involved the title. His discussion of that topic made me wonder if they considered "Capital into the 21st Century" as an English title. My French is totally rusty, but I even imagine that is semantically closer to the original.

My overall conclusion is that I don't feel I was much persuaded by the book, mostly because I still feel that the entire economics paradigm is in need of drastic revision. The essential focus of economics remains on the money and such things as can be conveniently counted. The fundamental position of the economist remains that a person with $1 million is in some sense 1,000 times better than a person with $1,000 dollars. Professor Piketty clearly regards this idea as a problem, insofar as he clearly favors less inequality, but to me this entire notion is more simply absurd. People are fundamentally much more similar than different, and the notion that any person can really be rated as 1,000 more of anything than any other person is not even in the bounds of reason as I see them. My position is you have to start comparing people with severe medical problems even to get to meaningful differences on the order of 2 or 3, and differences on the order of 1,000 are just pathological. In particular, someone who gets extremely rich because he loves money 1,000 times more than other people is NOT 1,000 times more valuable than those people. That much "love" is just a form of mental sickness, a severe aberration, if it has any meaning at all.

The time has come for a new paradigm for economics, and this book is really just another kind of band-aid on the old and borken model. (That how the French programmer Patrick Dussud always pronounced "broken" when we were working together at TI.) We should be working on a new economics based around time, which is an essentially equivalent resource for every human being. Yes, some of us clearly use our time much better than other people, but every human has exactly 24 hours in the day and 60 seconds in each minute.

Can I recommend this book to you? Turns out to be a difficult question. I certainly think he provides a lot of very interesting data, but absorbing the data in a useful way is going to be difficult for most general readers. I think his main conclusions and recommendations could be condensed into a much shorter book. Probably that's the thrust of his articles, though they seem relatively unavailable in English.


This list of minor errors is, as usual mostly to show how closely I read, but it's also a professional thing. I guess much of my work could be described as copy editing to the max. From that perspective, it would also be a test of my accuracy, but I couldn't find a corresponding list of typos on the official website for the book. (Most of the glitches were in the Notes at the end of the book, so it seems likely there was a bit of a rush for the printing deadline.)

Page 89 should say "all these changes with a single". [My initial idea was to mark the delta parts in color, but turned out to be too much of a nuisance...]

Page 198 mistakenly says "capital/income ration" (rather than "ratio") 6 lines from the bottom.

On page 320, there seemed to be some confusion about the text's references to Figure 9.6.

On page 498, in the middle of the page a space is missing and it should say "Sweden in 1903".

On page 604, in Note 5 the last line should be "riches 0.01 percent".

On page 606, in Note 26 it must be "2007" rather than "1007".

On page 614, in Note 27, it should say "close to the French level".

On page 622, in Note 1, there is apparently some confusion around "trillion" used for dollars and "million" used for euros. Possibly this is related to the British usage of "trillion" and "billion"?

On Page 630 there may be a problem, but right now I can't spot it. Or perhaps I was questioning the claim that the US has the highest rate of incarceration? My feeling is that Israel is the clear international leader based on their treatment of Gaza as the world's high security largest prison.

On Page 643, Note 20 should say "but to require payment".

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