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08/20/2015

New work on Piketty and inequality from Puaschunder and Pressman

Two intriguing new works on Piketty and inequality from social economists:

1. Julia Puaschunder (New School for Social Research) has a new paper at SSRN, "The Beauty of Ivy: When Inequality Meets Equality." The abstract follows:

Thomas Piketty’s (2014) Capital in the 21st Century revolutionized economic thoughts on inequality. Started by the 2008/09 World Financial Crisis and cumulated in the subsequent Occupy movement, attention to rising inequality regarding economic wage, opportunity and wealth led to advocacy for a more equal society. Innovatively, this article argues for a mixture of equality and inequality within a system holding value when access to opportunities to transfer implicit wealth is distributed merit-based. By the example of Ivy League educational institutions but also elaborating on social environments and interaction networks, a novel economic wealth transfer model is proposed. Within an economic system, dyads of unequal crystallized value based on heritage (e.g., royal families, legacy admits) and merit-based equality represented by offspring from families with underprivileged backgrounds, whose outperforming ambition, fluid intelligence and drive may lead to fruitful social interactions and beneficial wealth transfers, may create beneficial economic outcomes. On the societal level, within networks favorable environments may serve as transformation hubs if entered merit-based by underprivileged families. While presenting a preliminary idea of an economic model of value transfer between equality and inequality, the article outlines a blatant research gap on information about the direct transactions and interactions between equality and inequality representing agents within societal networks. The article concludes with giving hope in Piketty’s outlook of rising inequality by showing the economic merits of inequality when paying attention to merit-based distributed value transfer opportunities.

Pressman2. Steve Pressman (Monmouth University) has a book coming out this fall from Routledge entitled Understanding Piketty's Capital in the Twenty-First Century:

Thomas Piketty’s Capital in the Twenty-First Century reached the top of most best-seller lists last year shortly after it was released. Nonetheless, few people actually read the book. Yet reviewers have agreed that the book is important because it touches on one of the major problems facing the US economy, the UK economy and many developed nations: rising income and wealth inequality. It also provides an explanation of the problem and a policy solution: a global wealth tax.

This book is intended to do three things. First, it provides a summary of the argument of Piketty’s book, which many people have bought and few people have read. Second, it fills in some of the gaps in the book, by providing readers with the background that is needed to understand the volume and the argument. This background information discusses economic data sources, measures of inequality and why income inequality is such an important issue today. Finally, the work provides a defense of Piketty’s analysis and at times some criticism of his work.

Pressman explains why the problem of rising inequality is important, where Piketty’s data comes from, and the strengths and weaknesses of that data. It defends Piketty’s inequality, r>g, as the reason inequality has risen over the past several decades in many developed nations. Using Piketty’s own data, this book argues that rising inequality is not just a characteristic of capitalism, but results from different growth rates for income and wealth, which can occur under any type of economic system.

Understanding Piketty's Capital in the Twenty-First Century is the ideal introduction to one of the most important books of recent years for anyone interested in Piketty’s work and the inevitability of inequality.

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