It is hard not to be impressed by the meteoric success of Thomas Piketty’s Capital in the Twenty-First Century, a success that has spawned dozens, and perhaps hundreds, of reviews and reactions from social scientists and journalists.
Yet we felt that few, if any, of these reviews touched on what we thought was the biggest shortcoming of the book. Sure, one can — and should, and we do — quibble with the theory (and especially the way it is presented and the way it follows the put-down that economic theory gets from Piketty) and the strong predictions about the future dominated by capital income (even though there is little evidence backing this up, perhaps because econometrics is also not en vogue). But from our viewpoint, more important is the way in which Piketty eschews a careful analysis of the determinants, and implications, of inequality situated in the context of the economic and political institutions of a society, and instead links the dynamics of inequality to fundamental or general laws of capitalism, very much in the style of Malthus, Ricardo and Marx.
So here is our attempt at a critique focusing on this point.