Thread by @LaurentFranckx

Raghuram Rajan reviews Thomas Piketty's "Capital and ideology". So a few tweets as meta -review 😉
ft.com/content/5a393b…

There are several points where Rajan's review is in line with mine goodreads.com/review/show/30…
We both have a very deep respect for the incredible and seminal data collection performed by Piketty and his team, and acknowledge that the book contains a lot of very interesting and /

sometimes surprising facts. We also agree that one of the major points in Piketty's book (that high marginal tax rates in the post-war period went hand in hand with high growth rates, and therefore high tax rates should not worry us) is an inferences that is unworthy of a /

serious researcher. Also, Rajan correctly points an important measurement problem that has been already been discussed in The Economist last autumn: some of the highest earners derive their income from partnerships, which is registered as capital income, while it really is /

labour income. Piketty's measurements thus tend to overestimate the share of capital income, and to underestimate the rewards that go to highly skilled individuals. Rajan also points to several problems with the actual solutions Piketty proposes. My assessment was that /

whether or not Piketty's proposals are realistic, they can provide an interesting impetus to some fundamental discussions on wealth and the role of the state in the 21st century. Also, I think some of Rajan's points are really straw man arguments: I don't think Piketty has ever /

used the word "indoctrination" or that he has suggested that societies could be changed by just changing ideologies. Anyway, Rajan's review of this book confirms that, in future discussions about inequality, it will become impossible to ignore Piketty -

just as discussion about the (im)possibility of central planning cannot ignore Hayek. A thinker does not need to be right about everything to be relevant.