I very much enjoyed reading the popular book ‘Capital in the 21st Century‘ by the French economist Thomas Picketty. Of course, I really enjoy the historical approach as I believe that historical perspective can give us really valuable insights into the major changes in our societies – that is quite a similar approach to the approach in followed in my book, although of course I had less time to dwell and research into historical economics series!
I really recommend this book for learning about inequality changes throughout the Industrial Age, and in particular in the 20th century. The book clearly demonstrates that our societies are facing today a particular political challenge regarding both rewarding success and entrepreneurship, and minimizing inequality, in particular when it comes to inter-generational inequality.
One point of the book which is particularly controversial is that the solution for Picketty is clearly some worldwide action on the tax structure. Today it is not possible any more for a single country to develop a tax system that would resist the tendency to inequality, as the financial system is so globalized (re-read our post on When will governments finally realize that the interconnected economy is already here?). There lies precisely one particular issue that I noted in the Fourth Revolution book – political action now needs to be global. We can hide between a super-power that tries to do all the work by itself (with some noticeable success even on the tax side, but limited to its citizens only).
Our political systems need to grow. Nations are outdated. Europe is necessary, and not even sufficient. Global policies must be put in place to be successful in our transition in the Collaborative Age.
