Piketty's determinism?

Vanishing Point, Railway lines in Sutton Park, 2008

Vanishing Point, Railway lines in Sutton Park, 2008

In this review of Piketty’s book, Capital, we argue that Thomas Piketty’s determinism (which suggests that inequality is set to continue to rise indefinitely and that interest and growth are on a preordained trajectory) is wrong. Things don’t have to be this way. Thomas Piketty’s approach, we argue, arises from his fundamentally neo-classical approach to interest as the marginal product of capital.

On our worldview, substantial and sustained interest rate changes follow from progressive governments taking control of money. The level of output and employment is then a function of interest so obtained.

By Ann Pettifor and Geoff Tily, first published in Real World Economics ReviewIssue no.69, 7th October 2014