Thomas Piketty’s book Capital In The Twenty-First Century has attracted worldwide attention, not because he crusades against inequality –many of us do that– but because of its central thesis, based on his reading of the 19th and 20th centuries, that capital “mechanically produces arbitrary, unsustainable inequalities”, inevitably leading the world to misery, violence and wars and will continue to do so in this century.
So far, Piketty’s critics have offered only technical objections to his number-crunching without contesting his apocalyptic political thesis, which is clearly wrong.
I know this because over the past few years my teams conducted research in the field, exploring countries where misery, violence and wars are rampant in the 21st century. What we discovered was that most people actually want more, rather than less, capital and they want their capital to be real and not fictitious.
Like many Western academics on a tight budget when faced with poor and nonsensical statistics outside Western nations, Piketty takes European indicators and extrapolates them on to such countries to draw global conclusions. This ignores the fact that 90 per cent of the world population lives in developing countries and former Soviet states, whose inhabitants produce and hold their capital in the informal sector, that is to say, outside of official statistics. This flaw has implications that go far beyond mere accounting: it turns out that the kinds of violence that erupted in places like Cairo’s Tahrir Square in 2011 occur where, according to our field studies, capital plays a decisive if hidden role that Eurocentric analysis cannot perceive.
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