Sunday, May 4, 2014

THE '' NOUVELLE '' ECONOMY: R > G

Thomas Piketty's "Capital in the Twenty-First Century" has become the latest "uninvited" best-seller.  Probably not since Keynes has an economist been so present in the social narrative.  Only David Stockman ("The trading room is a weapon of financial mass-destruction") came close to the current hype of the French sensation.  Milton Friedman is past history (unfairly so) and Paul Krugman tries, in vain, to keep us awake with his "great unraveling."  Meanwhile Piketty' " R> G" inbalance might soon adorn T-shirts and dorms of universities in the land.  I have started the book and indeed I see some validation in the thesis that the return of capital is larger than the rate of economic growth. I wonder if he will see this projection as structural or if he will attach socio/political ramifications to this premise.

This short comment is about something else, fed by social networks.  Piketty is a very French phenomenon, a Balzac-type of economist, rooted in an almost hexagonal worldview wherein typical local realities control the trajectory of a brilliant set of observations which will be "catnip" to the left and "anathema" to the right and to the school of unbridled globalization.  Wealth, taxation, inheritance are realities which are conditioned by very cultural/sociological realities and are difficult to be generalized one way or the other.  Both globalization and Piketty's "Capital" can lead to the over-simplification of issues which are often intertwined.

More interesting than the analyses which will follow and be contradictory, is the rapture created by a book which is non-entertaining while, admittedly, unassuming.  The French have always excelled in self-promotion, albeit generally with a very short lifespan. We had the nouvelle vague, the nouvelle cuisine, the nouveaux philosophes and the nouveau roman (dead on arrival).  Now we get the nouvel economiste.  It is positive to elevate the public discourse but it is to be expected that this too will pass, to the chagrin of some and to the relief of others who feel, rightly, bypassed by a very smart interloper.

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