As 2014 came to an end, a variety of “year in review” articles cited French economist Thomas Piketty’s “Capital in the 21st Century” as perhaps the most important book in the business and economics field in quite some time. Piketty’s book has stirred up a lot of discussion and controversy about the problem of inequality in industrialized society. It’s well known that income inequality is inherent to any capitalistic economy; arguably, income inequality is needed in a system that progresses through competitive economic incentives. The apologist for capitalism basically argues that even though some people don’t do as well as others, and many remain poor, everyone is still better off because of the dynamic growth caused by capitalism. Even the lowest on the income ladder eventually do better than the poor in less dynamic economic systems.

Piketty changed the focus somewhat as to include wealth; it follows that if income is unequal, then wealth, what people manage to accumulate or save up over their lifetimes, is probably also going to be unequal. What Piketty has done, however, is to show (purportedly) that modern trends in wealth accumulation are reaching something of a “runaway” point, whereby the income and opportunities gap becomes so wide that hard work, good ideas and other talents (and also good luck, quite frankly) no longer rule the day. The situation is now reaching the point, according to Piketty, where economic elites have formed amidst the populace, elites that are increasingly restricted by parentage and location, such that if you’re not born with the right parents in the right place, your opportunities for a decent income and reasonable wealth (i.e., the good life of the “middle class”) aren’t very good. And they are getting worse with every new year.

So, Piketty has added fuel to the fire regarding the increasingly popular notion that the rich really are getting much richer, the poor much poorer, and the middle class  »  continue reading …