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.

Errata

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".

Immigration: Opposing Viewpoints

Context of this rather rushed review is that I noticed this library book as I was browsing for something else, but I want to write a quite review before returning it. The topic has been much in the news of late, and for the usual set of bad reasons.

Review of Immigration: Opposing Viewpoints edited by Teresa O'Neill

This is a book of historical background information, obviously intended for a college history course on the topic. It's actually part of a series of topical books, and for each topic, they apparently collect excerpts from various prominent spokesmen. In this book, the most prominent contributors are probably Senators such as Henry Cabot Lodge and George F. Hoar. Or perhaps pride of place should go to Israel Zangwill, the London-born Jewish immigrant who coined the famous expression "the melting pot" to describe the immigrant experience in America? There are also spokesmen from prominent pro- and anti-immigration organizations, leaders from organized labor, religious leaders, professors such as John Bodnar, and various others. Most of the pieces are a only a few pages long, but there are some shorter snippets inserted into longer ones. The editor has added a bit of contextual information to introduce each of the authors. The time of the selections spans well over a hundred years. Even though there's some perspective here because of the long time since many of these pieces were written, the editor doesn't offer any conclusions, but is apparently making a sincere effort to just stay out of the battles. There is a chronology of historical events included in the end matter, but basically it's just food for thought.

The main thing that struck me as a read the book was the historical consistency. Basically the same issues are rehashed over and over again, right up to the present day. The big changes are the labels of what sort of immigrants have become undesirable. Usually they are racial labels like Irish, Germans, Italians, Jews, Russians, Poles, Chinese, Japanese, Vietnamese, and most recently Mexicans. I'm sure I've left out some of the nationalities that were targeted at various times... Amusingly enough, or perhaps it's simple hypocrisy, but quite often the loudest critics are descended from 'races' that were previously on the list of 'bad' immigrants. Other times the undesirable immigrants are characterized more on the basis of their beliefs, skills (or lack thereof) or other non-racial traits, starting most prominently with Catholics, but including lots of other groups such as laborers, mental defectives or others who might become a burden on the state, illiterates, morally deficient people (but especially women of loose morals), communists or anarchists, transient farm laborers, and most recently Moslems. Again, I'm sure I've missed some of the target groups, but the details don't seem to matter much.

At this point it seems I need to clarify my own biases, because I ultimately conclude that they limit my ability to fully understand the anti-immigration perspectives. The most important bias is just that I think freedom is a good thing, including the freedom to live where you want to. The only 'restriction' I'd put on it is that there should be sufficient accurate information available so that the person who wants to move to a new country can make a reasoned decision. Yes, there'd be a certain amount of disruption, but things would balance out in the end--and it even seems rather inevitable to me as the costs of migration continue to decline. To me, the significant issue is not really addressed in this book: Is it a zero-sum game, or can things get better for every one. If you believe it's a zero-sum game, then letting a immigrant have some of your pie is a loss for you and it makes sense to be greedy as long as you have sufficient force to protect your pie. However, if you think the pie is getting bigger and better all the time, then the best thing to do is make that happen as quickly as possible. To me, looking at the big historical perspective, that seems to be very clearly what has been happening for thousands of years, and it's going to continue. It's the growth of science and technology and modern economies, including immigration. Fighting against the tide is always a losing proposition. Putting it in concrete terms, I think it would be better to let Chinese workers migrate to America to sustain the strength of America's industry rather than to allow the strength of America's industries to continue migrating to China. Actually, now it seems quite possible to me that the real strength of America was tightly linked to the freedom to migrate within such a large region, and that may be the real reason for the increasing strength of the EU. (Another point of personal bias, since I've invested in Euros? Which reminds me to note that I'm an immigrant to Japan and the grandchild of immigrants to America.)

Where does that lead me as regards the book I'm supposed to be reviewing here? Well, mostly the anti-immigration perspectives don't seem very substantive to me. In some cases they seem intellectually dishonest or obviously mistaken. I suppose the most clear example is the table on page 216, which was supposed to demonstrate how the literacy test would work to exclude "Undesirables". The table listed the illiteracy of various nationalities of immigrants--and then averages the averages to draw conclusions. Excuse me, but that is incorrect math. If each of the immigrant groups was exactly the same size, then it would make sense. Or if each component of a grouping had the same exact illiteracy then it would also make sense. However, neither condition holds here, so it's simply bad math that proves nothing. (There's another point of what might be personal bias here, in that Hebrew is reported as having around 30% illiteracy (in a group with an average over 40%) whereas they are generally regarded as being more educated and literate than average.) This is an especially clear example, but most of the anti-immigration positions seem to be on similarly shaky ground. They keep focusing on imminent economic disasters that never happened. Some of them also worry about racial purity, again without any evidence, then or in hindsight. To really make their case, they would need to consider how America has changed over the decades, they would need to establish that some of those changes were bad, and finally they would need to prove that some immigrants were linked to those bad changes. I read the book closely, and didn't find any of that here.

TImes up, so I'm going to wrap by just saying it's an interesting read, but mostly an example of "The less things change the more they stay the same." The immigration issue has basically been going in circles for a long time.