Capital in the Twenty-First Century. A Critical Reflection of Growth and Inequality

Essai , 2019 , 32 Pages , Note: 1.7

Gestion d'entreprise - Histoire Economique et Sociale

The question of income and wealth inequality is not a mere economic question but also a political with a social dimension. The distribution is chaotic, unpredictable and can change rapidly under different institutional conditions. Nevertheless, growth and inequality are central components of capitalism, as there have always been profiteers and losers from the distribution issue. In contrast to other bestsellers, The Capital in the 21st Century written by Thomas Piketty is widely discussed because the book contributes a serious and discourse changing view on the question of inequality. Piketty caused a great stir, especially among conservatives, in the course of 2014 and sparked manifold discussions not only among economists, but also in a broader public. The book can be differentiated between its historical contribution as well as the extrapolation of the past in order to predict future developments concerning growth and inequality as well as implications for the institutions in the 21st century.

The aim of the following paper is therefore not to examine the historical correctness, but the general theoretical approach as well as the political implications. Accordingly, Piketty’s explanations on growth and inequality are elaborated in chapter 2. Chapter 3 reflects "Capital in the 21st century" from the perspective of growth, while chapter 4 focuses on inequality. The paper concludes in chapter 5 with a summary of Piketty’s arguments and a selection of counterarguments. Furthermore, limitations and an outlook are discussed.

Contents

Table of figures

Table of abbreviations

1 Introduction
1.1 A Brief Introduction to the General Laws of Capitalism
1.2 Aim and Structure of the Paper

2 A Brief Introduction to Capital in the 21st Century
2.1 Introduction
2.2 The Role of Growth in Capital in the 21st Century
2.2.1 The Forces of Divergence
2.2.2 The Forces of Convergence
2.2.3 Limitations of Growth
2.3 The Role of Inequality in Capital in the 21st Century
2.4 An economic policy for the 21st century

3 Main Arguments against the Understanding of Growth
3.1 Criticism of r - g as the main force of injustice
3.2 Criticism of the First Fundamental Law of Capitalism
3.3 Criticism of The Second Fundamental Law of Capitalism
3.4 Criticism of the Main Forces of Convergence

4 Main Arguments against the Understanding of Inequality
4.1 The role of institutions
4.2 The role of labor market dynamics and innovation
4.3 The role of social mobility and redistribution preferences
4.4 The converging living standards argument
4.5 Implications of Piketty's political suggestions
4.6 Selected impacts of inequality on the individual utility function

5 Conclusion

References

• Université: Zeppelin University Friedrichshafen
• Note: 1.7
• Année de publication: 2019
• Pages: 32
• N° de catalogue: V1034395
• ISBN (ebook): 9783346453167
• ISBN (Livre): 9783346453174
• Langue: allemand
• mots-clé: capital, twenty-first, century, critical, reflection, growth, inequality