Thomas Piketty – Capital in the twenty-first century

The arrival of Thomas Piketty in Holland had primary the effect of stigmatization: politicians on the left wholeheartedly agreed with his conclusions while politicians on the right either completely ignored him or pretended that his conclusions were not applicable in the rather egalitarian Dutch society. The result was that the discussion on Piketty’s findings stuck in a kind of Robin Hood atmosphere in which Piketty was portrayed as some kind of left-wing bandit instead of a serious researcher. Additionally, it was remarked that in his book, there is only one reference to the Netherlands, hence this was the perfect argument to ignore his conclusions altogether.

Surprisingly, both the politicians and the press did not have any content based feedback or criticism on Piketty’s analyses, what immediately poses the question if they had read the book at all! I have to admit, as the book has more than 500 pages, it is rather a big chunk to get through. However, the clear story line, the frequent use of graphs and data sources, make it completely worthwhile to struggle through it. Furthermore it is remarkable that Piketty is basing his conclusions based on thorough data analyses: contrary to the majority of current economists who tend to use mathematical models.

It is a relief to experience a book on economics in which America is the not focus point, but instead France. Piketty shows that even with the good intentions of the French revolution, two world wars were eventually required to establish a New Deal for France as capital lost value, and labour became more important resulting in a higher level of equality. Also, he challenges the achievement of the Bank Of England for not ever having a default in its history: indeed England maybe one of the countries that never defaulted on its obligations, however to fulfill these obligations it was required to pay a handsome interest to its upper class in the form of high interest treasury bonds. An increase in capital tax, inflation, or defaulting on treasury bonds, may at first instance seem rather crude instruments, however they do lead to a better distribution between capital and labour.

Unfortunately, the Netherlands was not prepared for the arrival of Piketty which seems to be telling for the current Zeitgeist: although citizens complain about the lack of vision, courage, and spirit, it seems that when an effort is required (such as reading a big book) most politicians and reporters are backing out. This is a pity, as Capital in the twenty-first century entails all elements of being a book which is ahead of its time, and the Netherlands differ less from its surrounding countries than we sometimes pretend.


About Servaas Houben

I am a Dutch actuary and worked in the Netherlands for the first 4 years of my career. Thereafter, I worked for 2 years in Dublin and 4 years in London. I am now heading the actuarial department of ENNIA in Curacao.
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