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Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capitalism in the Twenty First Century


  • McCloskey, Deirdre Nansen

    () (University of Illinois at Chicago; Institute for Advanced Sustainability Studies, Potsdam, Germany)


Thomas Piketty has wrote a serious empirical work on economic history. The central thesis of the work is that the force of interest on inherited wealth causes inequality of the income earned from the wealth to increase in inevitable and stable manner. The author has collected and presented a huge bulk of empirical data. But despite all its advantages the book contains many serious flaws. In fact its own data suggest that the inequality of income has increased much only in a few countries and only recently. Moreover, all the way a steady share of rich people constantly have been dropping out of riches or coming into them, in evolutionary fashion. Piketty does not see the key role of entry of new entrepreneurs into the markets and their exit from them while this is the key to understanding of the process of market-tested betterment that has made the poor rich. Piketty’s definition of wealth does not include human capital, owned by the workers. The fundamental ethical problem in the book, is that Piketty has not reflected on the ethical relevance of equality as such and in comparison with raising of the poor. It is the latter notion that is ethically relevant from the point of view of their human dignity. If income is correctly measured the real income of the poor has risen in sustained way from 1800 because of rising productivity, and consumption of basic necessities is very much more equally enjoyed nowadays

Suggested Citation

  • McCloskey, Deirdre Nansen, 2016. "Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capitalism in the Twenty First Century," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 153-195, August.
  • Handle: RePEc:rnp:ecopol:ep1647

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    References listed on IDEAS

    1. Alan Barreca & Karen Clay & Olivier Deschenes & Michael Greenstone & Joseph S. Shapiro, 2013. "Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the 20th Century," NBER Working Papers 18692, National Bureau of Economic Research, Inc.
    2. Branko Milanovic & Peter H. Lindert & Jeffrey G. Williamson, 2011. "Pre‐Industrial Inequality," Economic Journal, Royal Economic Society, vol. 121(551), pages 255-272, March.
    3. Fogel,Robert William, 2004. "The Escape from Hunger and Premature Death, 1700–2100," Cambridge Books, Cambridge University Press, number 9780521004886.
    4. William D. Nordhaus, 2004. "Schumpeterian Profits in the American Economy: Theory and Measurement," NBER Working Papers 10433, National Bureau of Economic Research, Inc.
    5. Thomas Piketty, 2014. "Capital in the Twenty-First Century: a multidimensional approach to the history of capital and social classes," Post-Print halshs-01157491, HAL.
    6. A M. C Waterman, 2012. "Adam Smith and Malthus on high wages," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 19(3), pages 409-429, June.
    7. Ian Gazeley & Andrew Newell, 2010. "The end of destitution: Evidence from British working households 1904-1937," Working Paper Series 0210, Department of Economics, University of Sussex.
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    Cited by:

    1. repec:beo:journl:v:62:y:2017:i:215:p:53-80 is not listed on IDEAS
    2. Trofimov, Ivan D., 2017. "Capital productivity in industrialized economies: evidence from error-correction model and Lagrange Multiplier tests," MPRA Paper 81655, University Library of Munich, Germany.

    More about this item


    Thomas Piketty; capital; inequality; income redistribution; long-term economic growth; innovation driven growth;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth


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