Thomas Piketty’s book entitled Capital in the Twenty-First Century, entails the economic and social patterns of the world from the eighteenth century into the twenty first century. Piketty discusses the idea of wealth inequality in the world economies and the contributing factors. He notes that distribution of wealth is one of the most thorny issue in the world. Piketty goes further to argue that most of the debate on wealth distribution has been baseless due to lack of emphasis on the relevant data. In his book he explores the views of various scholars, philosophers, economists, historians, and sociologists on the wealth distribution issue. In 1798, Thomas Malthus argued that the main cause of the wealth distribution problem was overpopulation.
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Piketty aims at bringing out an economic perspective based on solid statistics data rather than relying on the theories formulated on the basis of political influences. The historical scope of Piketty’s study is as from 1700 to the twenty first century. Piketty points out that the lack of sufficient data on distribution of income and countries’ output before 1700 limited his study in that period. Geographically, Piketty focuses on the wealthy nations in his study of capital and income ratio. He then uses this data to extrapolate to the poor and emerging nations. To ensure the study is comprehensive, Piketty tries to cover the five continents the best way possible. His book, however, relies mostly on the historical development data of developed nations such as Great Britain, France, Germany, Japan, and the United States. The most complete historical data is obtained for France and England. Piketty, therefore, bases most of his study on France and Great Britain. To clarify his preference on his choice of these two countries, Piketty is quoted to point out, “One reason for my choice has to do with …show more content…
I think Piketty’s claim that income and wealth inequality can be resolved through proper taxation system is a bold assumption. There is no clear elaboration on how wealth changes with time in the economy. Piketty assumes that the same policies of wealth distribution can be affected globally to achieve the same ends. I think the taxation policy can work better in developed nations that have clear and developed tax collection mechanisms than in emerging countries.
Piketty’s Positive and Normative Economics
Positive economics is based on facts and objective. On the other hand, normative economics is based on opinion and, hence, subjective. The conclusions drawn in a positive economics can be proven to be correct or wrong through simple tests. However, normative economics, being value based, is impossible to prove wrong or right. Piketty’s work is majorly positive economics. In his book he tries to champion advancement of positive economics rather than normative economics. He argues that economics theory put across by scholars, such as Ricardo, Young, and Malthus are purely normative and cannot be proven.
Piketty develops his model through extensive collection of data going back to the start of the eighteenth century to the current one. Piketty then uses the large historical
Piketty aims at bringing out an economic perspective based on solid statistics data rather than relying on the theories formulated on the basis of political influences. The historical scope of Piketty’s study is as from 1700 to the twenty first century. Piketty points out that the lack of sufficient data on distribution of income and countries’ output before 1700 limited his study in that period. Geographically, Piketty focuses on the wealthy nations in his study of capital and income ratio. He then uses this data to extrapolate to the poor and emerging nations. To ensure the study is comprehensive, Piketty tries to cover the five continents the best way possible. His book, however, relies mostly on the historical development data of developed nations such as Great Britain, France, Germany, Japan, and the United States. The most complete historical data is obtained for France and England. Piketty, therefore, bases most of his study on France and Great Britain. To clarify his preference on his choice of these two countries, Piketty is quoted to point out, “One reason for my choice has to do with …show more content…
I think Piketty’s claim that income and wealth inequality can be resolved through proper taxation system is a bold assumption. There is no clear elaboration on how wealth changes with time in the economy. Piketty assumes that the same policies of wealth distribution can be affected globally to achieve the same ends. I think the taxation policy can work better in developed nations that have clear and developed tax collection mechanisms than in emerging countries.
Piketty’s Positive and Normative Economics
Positive economics is based on facts and objective. On the other hand, normative economics is based on opinion and, hence, subjective. The conclusions drawn in a positive economics can be proven to be correct or wrong through simple tests. However, normative economics, being value based, is impossible to prove wrong or right. Piketty’s work is majorly positive economics. In his book he tries to champion advancement of positive economics rather than normative economics. He argues that economics theory put across by scholars, such as Ricardo, Young, and Malthus are purely normative and cannot be proven.
Piketty develops his model through extensive collection of data going back to the start of the eighteenth century to the current one. Piketty then uses the large historical