TCF's newest fellow, Jeff Madrick, tackles the oft-discussed Capital in the Twenty-First Century by Thomas Piketty at BillMoyers.com. His piece, titled “An Indictment of the Invisible Hand,” points out the disconnect between economists' praise of Piketty's recent tome and action on inequality today.
Mainstream economics generally concedes the levels of inequality but for a very long time has said much the opposite of what Piketty has found. Current inequality is an aberration in the long march of capitalism, according to mainstreamers, due to educational inadequacies or globalization. Free-market competition should reduce excesses of capital accumulation and a balance will be struck with wages as productive investment creates more companies and more demands. Some higher taxes may be necessary, argues some mainstreamers, but excessive capital accumulation eventually has to fall as competition drives down the return.
Read Madrick's full take on Piketty at BillMoyers.com.