Capital in the 21st Century by Thomas PIketty

Pages: 571 
(655 if you read all of the footnotes)

I am very late to this party.  Capital caused a sensation in the English-speaking world when its translation was published in 2014.  Every second opinion piece or economics article or political piece that I read for months referenced Piketty.  A prolific-Facebook poster of my acquaintance became an academic fangirl. But at that time I knew that I'd have limited time and mental focus for reading anything complex, so after I looked at the length I concluded that I was unlikely to finish it.

I finally read Capital in March / early April of this year.  Yes, I know it's July.  No I didn't write this blog entry at that time.

I am late to this party in more ways than one.

However I did take a few notes about the book as I read it, so I am able share a few thoughts despite my always-hazy memory.

1.  Economists don't really understand economies.  They just don't have the data.  Detailed historical economic data exists only for a few countries, for a few factors, over a limited timespan.  Not to mention that the data for different places and for different eras is inconsistent.  So there is literally no way to prove general theories about how economies work.  You can draw well-founded conclusions only for certain phenomena, or for short term trends.

Fortunately for readers of Capital, data does exist about income and wealth distribution for a few countries (France and England) over a couple of hundred years, and for a number of other (mostly developed) countries for the 20th century.  This allows Piketty to draw some interesting conclusions.

2. Insofar as we can tell, the economy of the 20th century was far from typical.  The First and Second World Wars sent huge shock waves through world economies, and in particular European economies.  The government of Britain used taxation and deliberate inflation to pay for both wars,  decimating the inherited wealth of the aristocratic classes in the process.  Yes, all of those elegies for a lost way of life (Brideshead Revisited, Downton Abbey, etc.) do reflect a real change, and not just the onset of 'modernity'.

Prior to WWI, the wealthy could count on a fairly reliable return of 4% per annum on capital with basically no inflation.  After this, while technological change did reduce the return on capital on agricultural land, inflation and taxation meant that it was far more difficult to live on the gains from accumulated capital no matter how it was invested.

Don't be sad:  the result was a vast reduction in the economic importance of inherited wealth.  This gave rise to a healthy middle class,  widespread prosperity, and the ability of motivated individuals to join or exceed middle class status based on their own talent and effort.  In other words, these conditions created a perhaps historically unprecedented era of vastly reduced inequality that allowed most of us born in the 20th century to achieve a comfortable life.

To put this more quantitatively, prior to WWI the wealthiest 10 per cent of people owned 90% of all wealth in a wide variety of nations.  Afterwards, their share of the nation's overall wealth dropped to:

• 70% in Britain
• 55% in Sweden
• 60% in France
• 65% in the US

In other words, taxation helped level the playing field so that there was something left over for the rest of us.

3.  Ronald Reagan, Margaret Thatcher, and their neo-liberal cronies were and are Bad People.  The 1980s were an inflection point in Western economies.  Before this, high growth and policies like progressive taxation lessened inequality.  Since then, inequality has increased dramatically.

We can't necessarily reproduce the high growth rates of the post-War era.  But government policies (such as inheritance taxes, progressive income taxes, or taxes on capital) can have a profound effect on how wealth is distributed in a nation.

Less inequality is a Good Thing.  It doesn't mean that virtue goes unrewarded.  Quite the contrary.  The only way that economic Virtue (thrift, industriousness, initiative, cleverness) can be rewarded is if those virtues lead to economic success.  Economic success requires that there be "something left over for the rest of us" -- which can only happen if the influence of inherited wealth is limited.

Wait a minute!  Am I talking about two different things now?  No, not at all.  How do that top 10% manage to accumulate 90% of all wealth in a nation  in the first place?  Simple: by starting with inherited wealth and then preserving or expanding that wealth over their lifetimes.   

How does that work?  Well since antiquity, in different types of economies, and in different technological eras, the return on capital seems to have averaged 4-5% annually.  This is far higher than the typical growth rate of most economies. For example, in the time period 1970-2010, the annual growth rate of Western economies has been between 1.6-2.0%.  This means that 'new money' is created at less than 2% per annum as the economy expands.  "Old money" (capital) increases at 4-5% on average.  So barring appropriate taxation, inherited wealth grows faster than new fortunes can be made.

Inherited wealth beats industry and initiative. It's just math.

There are exceptions and exceptional eras.  Growth in China since 2000 has sometimes reached stratospheric levels (above 10%).  Post-War growth in Europe was also larger than 4% -- but replacing the entire infrastructure of bombed out countries will do that for you.

In stable economies, capital derived from investing inherited wealth overwhelms capital created by economic growth every time. And redistributing the wealth of nations so that it is owned by a small fraction of its population is not good for most of us. [See The Spirit Level by R.G Wilkinson and K Pickett, which outlines the negative societal effects of inequality over a surprisingly large range of social indicators -- for rich and poor alike.]

4. What else does Piketty have to say?  Many many things.  The book is almost 600 pages long, after all.  He provides evidence for his assertions ranging from quotes from Balzac and Austen to detailed charts and graphs of various economic data.  He delves into details about the mechanics of inequality, including evidence that the largest fortunes tend to earn more than 4-5% on average, accelerating inequality in favour of the wealthiest 1% (or .1% or .01%). He even suggests a solution:  a global tax on capital.

I could write more, but I'll leave it there to prevent my review from becoming as intimidatingly long as Piketty's book.

Overall, Capital is surprisingly readable, and indisputably relevant. There's a reason Piketty took the intellectual world by storm in 2013/14.

Leaving Berlin by Joseph Kanon

Leaving Berlin does some things very well.  Notably, it paints an indelible portrait of post-War Berlin 4 years after the defeat of the Nazis. The city is divided between the American, British, French, and Soviet zones.  The city is in ruins, the Berlin airlift is in progress, and the stunned survivors of the war are trying to navigate an uncertain and ever-shifting present.

We see Berlin through the eyes of the prominent novelist Alex Meier.  Alex is a German Jew who fled the Nazis before the war, and who is now returning to the East as an honoured guest to help build his homeland's socialist future.  But Meier is also a refugee again:  this time from the House Un-American Activities Committee.  When asked to name names he had a fit of temper and told them to go fuck themselves.  As a result, he was exiled from America and from his 10 year old American son.

In Berlin Alex encounters places and people that he knew before the war, but everything has changed.  The city is little more than piles of burnt rubble.  The younger brother of a socialist friend is now an ambitious East German apparatchik who is helping build what will become the Stasi.  One daughter of the man who saved him from the camps lives in West Berlin and is the self-justifying wife of a (former?) Nazi doctor. Her sister, his first love, is the mistress of a Soviet general in charge of slave labour camps. 

Everything is painfully familiar but painfully different, and Alex cannot bridge the gap.  He did not experience the war as they did, and can no longer truly understand the city or the people he left behind.

I think Leaving Berlin would have been a more interesting book if that summary of the book were  complete.  But Leaving Berlin is a thriller.  Alex is actually an American spy.   After his encounter with HUAC he was offered a deal by the CIA: if he gathers enough useful information in the East he may be allowed to return to America and be reunited with his son.

The tropes follow thick and fast:  Alex is, of course, also recruited as an East German informer almost as soon as he arrives, doubling the opportunities for intrigue.  No one is quite as they seem, Alex is quickly pulled between old and new loyalties, and soon Alex doesn't know where to turn or whom to trust.  The plot is driven by constant action.  Alex becomes embroiled in deception, murder, and betrayal the morning after his arrival, and transforms from a naive observer of events to a polished undercover operative over the course of  a single week.

Leaving Berlin is an effective thriller.  I raced to the end even though I'm not entirely sure that I followed all of the plot convolutions.

But Kanon did too good of a job evoking post-War Berlin and its inhabitants.  I wanted to spend more time with Bertolt Brecht, who, as Alex observes, is nostalgic not for pre-War Berlin, but for the 1920s.  I wanted to understand the idealism of the socialist returnees, and to see their struggles and compromises as their hope for a new society fades in the face of Soviet totalitarianism.  And I wanted the portrayal of the vindictive 'bad guy' Russians to be moderated by an understanding of how their attitudes towards Germans and Germany were formed by the 20 to 40 million Russian casualties of World War 2.

It's not entirely fair to critique a novel because it's not a different type of book.  Perhaps it's a tribute to the quality of Kanon's writing?  It left me wanting more from the novel than action and intrigue.

Testosterone Rex by Cordelia Fine

Men take more risks than women, are more competitive, and have a greater drive for both sex and dominance.  Women are more nurturing, take fewer risks, and value fidelity over sexual novelty.  These differences are rooted in human biology.  Over thousands of generations women bore and raised children while men hunted, leading to the evolution of fundamental differences between the sexes.  We see similar differences in a wide variety of other species.  In general males compete for females, while females bear and raise young.  Testosterone is the primary mechanism that drives these sex differences.  When we see a young man in a hot car, aggressive stock traders, or risk-taking sky divers, we're seeing testosterone at work.

You are familiar with this story.  It is simple and is widely understood.  It has only a single flaw:  it's not supported by the modern science of sex difference.

Take for example the concept of 'risk-taking'.   Who is more likely to take risks?  The answer turns out not to be simple.  What kind of risk you are talking about?  A physical risk?  A financial risk? A social risk?  What are the circumstances under which you are asking the test subject to take the risk?  Who is being asked to take the risk and what is their background?  Are we asking a Chinese woman who is a part of a social group of her peers to gamble a trivial amount, a man to take the social risk of disagreeing with his friends on a matter of principle, or a young woman to decide whether or not to have a baby?  (As it turns out,  if you look at mortality rates per 100,000, in the US you are 20 times more likely to die as a result of a pregnancy than as a result of skydiving).

When you look at the research, who takes which risks depends critically on who is being asked, the particular risk under consideration,  and the circumstances under which the risk is presented.  And, in the end, there is no such thing as a generic 'risk-taker'.  Day traders are no more likely than average to enjoy wing-suit base jumping.  In short, the biological sex of the test subject is not the defining criteria that determines what their risk-taking behaviour will be like, not even when you consider the highly gendered lens through which 'risk' has historically been defined for the purposes of social science research.

Testosterone Rex doesn't deny that there are differences between men and women, or deny that evolution has played a role in human biology.  That would be silly, even if Fine does wish that she had the nerve to claim "Testicles are a social construct" just to see people's reactions.  (Not to mention that it would give her an excuse to discuss a species of fish whose testicular development does in fact depend on the individual fish's social status.) 

Instead in this book Fine surveys the state of research on sex difference and dissects the mythology of testosterone. She argues that there is no such thing as biology unaffected by culture, especially for the human species. She also speculates that perhaps the very lack of fundamental behavioural differences between women and men found by modern research is how evolution has manifested itself in humans: after all, our flexibility to adapt to wildly varying circumstances is the basis of our success as a species.  Large and hard-wired differences between the sexes would leave us less adaptive.

Testosterone Rex won the 2017 Royal Society prize for popular science books.  It's easy to see why:  the book is comprehensive, rigorous, relevant, and entertaining.    Nevertheless, I didn't find a copy in stock at a book store until I hit New York City in January.  I hope the book gets the audience that it deserves.

The only woman in the room: Why science is still a boy's club by Eileen Pollack

I have a M.Sc. in Physics.  I'm a woman.  I did not go on to get a Ph.D.  I've never worked as a scientist.

I have a story that I tell when I'm asked about my history.  I think of it as my "just so" story.  It is a little fable that that makes my choices sound logical and satisfying.  I pull it out when I talk to young people about career choices and career progression, at networking events, or when I reveal my academic background to interviewers or colleagues.

As is the nature of such stories, it has been polished and abbreviated over the years.   While the story has a core of truth, it omits much more than it tells:  the anxieties, the uncertainties, the dead ends, and the mistakes.

Eileen Pollack is about 10 years older than I am.  She has a B.Sc. in Physics from Yale.  She did not do graduate work after she completed her bachelor's degree and has never worked as a scientist.  She is a novelist and author.

The only woman in the room is Pollack's attempt to get beyond her own 'just so' story to understand and explain why she did not become a scientist, and in doing so, to talk about factors that still keep women from becoming scientists.  The core of the book is Pollack's own story,  supplemented by "woman in science" research and with interviews with women who are scientists, who aspire to be scientists, and who, like Pollack, once aspired to be scientists.

The summary version of Pollack's story is that she chose to become a writer rather than a physicist because she lacked encouragement to pursue physics and lacked the self-confidence to do without encouragement.  She was pushed by a physics prof to expand her horizons beyond physics, then felt welcomed and validated by her writing professor and peers in a way that she never was in her scientific life.

When I read Pollack's story, I am staggered that she doubted her ability to become a physicist:  she won, and then turned down a scholarship to MIT.  As an undergraduate, she did original research in theoretical physics and was sponsored to present that research at a student conference. But she didn't know she was exceptional, and no one told her.  She took her initial awkwardness in the lab to mean that she lacked experimental talent, rather than understanding those failures as part of a learning process.  She didn't know, except in a general way, what her professional path forward as a physicist would have been, and lacked mentorship that might have helped her put her accomplishments in context or could have helped her understand the rewards and challenges that would have faced her as a scientist.

Did any of the factors that affected Pollack's decision to abandon physics influence my own decisions?  Like her, I got a terrible score in my first first year physics midterm, badly shaking my confidence.  Like her, I didn't know that the male undergraduates were completing their assignments collaboratively in a study group, instead doing all my own work throughout my undergraduate career.  Like Pollack, I ignored indications that my professors thought that I had talent, or did not understand them as such. (My experimental results from one first year lab were posted as an example for other students for a couple of years afterwards. In second year I received a physics scholarship.  No one told me that it was because in addition to getting good grades, I was asking interesting questions in class.)

Pollack cites research that shows that women need more encouragement to continue in science than men do, but receive less.  There are whys on both sides of that equation, of course.  But women may be less to blame if you consider that women start from a place where the paucity of women scientists itself sends the message that what they want to do is unusual, gives them fewer models to follow, and means they have fewer potential mentors who can address concerns particular to their experience as women.  And the fact that I feel defensive about women needing more encouragement also highlights another truth:  male is taken as the default, and when women deviate from that default their behaviour is seen as needing explanation. 

Pollack doesn't have answers to the "why" questions of women in science, and doesn't offer solutions.  She does expand the discussion past skills, aptitudes, and details of different program offerings to a more personal story, and to the consideration of the impact that more personal issues have on the lives of women who love (or once loved) physics.

Things Fall Apart by Chinua Achebe

Things Fall Apart is brief, but in 209 pages it brilliantly invokes the traditional village life and spiritual beliefs of the Igbo, then shows their swift unwinding at the hands of missionaries and the colonial administration of Nigeria. 

It's no wonder that this book is considered The classic work of African fiction.  Things Fall Apart was written by an Igbo and is told from an Igbo perspective.  The book centres African experience and challenges the colonial narrative of "exploration", "conquest",  or "savages and civilization" by showing the complex social, political, religious, and cultural traditions that were disrupted by the introduction of alien traditions -- literally at the point of a gun. 

It's hard to imagine how radical it must have felt to read this book when it was published in 1957.   Things Fall Apart helped spark an African literature as one nation after another gained independence through the 1950s and 1960s, and writer after writer starting telling their own stories. 

Ironically, part of the power and influence of the book undoubtedly came from its colonial influences:   Things Fall Apart was written in English, giving it an inherently larger audience.  It also follows a very conventional Western narrative structure -- the novel tells of the rise and fall of an exceptional man (Okonkwe) using an impersonal 3rd person narrator -- making its unfamiliar perspective more approachable for Western audiences and for those educated under colonial systems across Africa.

Both of these decisions make sense: according to Achebe, written Igbo is itself a product of colonialism.  The missionary who decided how to transcribe the language into written form decided that written Igbo should be the 'average' of all of the different dialects -- so written Igbo does not reflect how anyone speaks or understands the language anyway.   And as a student of English literature, it makes sense that Achebe turned to a colonial narrative form to tell a story from the history of his people.

But I wonder what Things Fall Apart might have been like if Achebe had instead followed more closely the model of the stories told at the firesides of his ancestors:  the masculine stories of the land,  full of violence and bloodshed, or the feminine stories like that of the bird eneke-nti-oba who challenged the whole world to a wrestling contest, and was finally thrown by the cat.....wait a minute!  In his youth, Okonkwe challenges the whole world to a wrestling contest and triumphs by throwing the reigning champion, Cat.... Maybe there's more going on in this novel than meets the Western eye.

I was out of town for the book club meeting where Things Fall Apart was discussed.  I wish I could have benefited from the insights of my fellow readers.

Battle Stove Spectacular by Standard Eyre

Welcome aboard the Battle Scar, and welcome to the feast prepared by Chef, your host on a flying castle populated by elves, dwarves, fieldfolk, gnomes, and humans as it careens towards a key diplomatic meeting that may decide the fate of the Elf Confederacy.  The table is set with a menu outlining the novella you are about to consume.  It begins with "Drinks-Aperitifs-Conversation",  moves through "Appetizers and Contemplation", "Specials of the Day", and "Tossed King Salad" before concluding, of course, with "Just Desserts".

Battle Stove Spectacular is an adventure fantasy set in a vast, complicated world full of intrigue, suspense, romance, restaurant critics, and puns.  It's the first of a planned 20 stories by the Vancouver author Standard Eyre.  It's available only as an e-book,  and can be found both on the Apple Book store and as part of the Vancouver Indie Author's collection at the Vancouver Public Library.

Battle Stove Spectacular is not my usual kind of book.  I'm a regular reader of SF, but a less-regular reader of fantasy and an infrequent reader of stories set in universes descended from Tolkien's.  But I'm not entirely unfamiliar with the genre.  I also know the author, and was interested in finding out what he had come up with.

What did I discover?  A world with some spectacular technology, intriguing characters, and a plot twist or two.  As book 1 of 20, I'm curious where the author is planning take the larger series: will the future stories explore different elements of this universe, like the history or future of the different races that inhabit this world?  Tell further adventures of these specific characters?  Explore the history and future of the flying castle itself?  The base the author provides in Battle Stove Spectacular could easily support multiple story threads and multiple directions.  There is a lot going on, especially considering that this is a novella of a mere 145 pages on my e-reader.

What did I think?  Well, my  personal taste in fantasy and SF leans to the "less is more" school, rather than the "more is more" school when it comes to characters, plot, and world-building.  For example, I thought Harry Potter and the Goblet of Fire and all of the subsequent books in that series would have been far better if they had been pruned by about 1/3, and I couldn't finish The Years of Rice and Salt by Kim Stanley Robinson.

I'd have loved to have read Battle Stove Spectacular as part of the larger planned series, where the (presumably) interlocking stories could have borne some of the burden of context-setting and world-building.  Alternatively, I might have preferred that the Battle Stove itself be promoted to full noveldom by having its action spread over a longer adventure.

But the novella as written is entertaining, including everything from automated Bus Buoys and sous-vide apatosaurs to an ambiguous golden boy and a warrior named Bunny.  If you're a fan of "more is more" fantasy fiction, you may enjoy spending a few hours exploring the Battle Scar with Standard Eyre.

Ru by Kim Thuy

I'd read Ru years ago, shortly after it won the Canada Reads competition  in 2012.  I remembered it as a short, beautiful, and poetical book about the refugee experience, which is why I recommended it as a selection for my book club.

It's more properly a novella than a novel, having only 141 sparsely populated pages, so I delayed re-reading it until just before the group met.   I tore through the book again, finishing two days before our meeting and thought "But what am I going to say about this book?". 

It was only then that it occurred to me that Ru is a novel, not a memoir.  Thuy is a Vietnamese refugee who came to Canada as part of the huge exodus of "boat people' in the mid-70s.  The book is written in the first person, and she did draw upon her own experiences in writing the book.  But Ru is a novel.  That means that the incidents and structure and language of the book have been carefully selected by the author to produce a certain effect, and to convey a certain message.  I couldn't assume, as I had unconsciously been doing, that Thuy had simply been recounting selected incidents from her life.   I needed to re-read, thinking about why, how, and when the author had inserted each incident, and what she was trying to say with what she was writing.

Unfortunately I didn't have time to finish the book for a second time before we met.  But the more critical re-reading I did have time to do was a revelation.   The book has a beautiful structure.  In French, a "ru" is a flow, as of a stream of water or tears.  In Vietnamese, a "ru" is a lullaby.  And the book itself is a ru....it is a series of linked stories, linked not by chronology but by themes.  One fragment will end with mention of a photo, or of a floor, or of the narrator's voicelessness.  The next will begin across time and space with a mention of a different floor, a different photo, another incident of speech or silence, the stories connected only by the theme and the fact that they tell fragments of the same person's life.  The book was also filled with interesting images:  what was the significance of the pink acrylic bracelet filled with diamonds used to smuggle wealth out of Vietnam, but stolen and discarded by thieves in Canada who had no idea of the value hidden inside?  How could I have missed the metaphorical nature of the brick wall built dividing the author's childhood home, half given over to the communists, and the other half invaded by soldiers that they were obliged to billet?

I didn't finish my re-reading, but reading the book as a novel definitely enhanced my enjoyment of it, and my appreciation of the artistry involved. 

The other striking feature of the book is that it was written in French, and translated.   The translator did a fabulous job of capturing the poetic language of the book.