Bookish Posts

Book Review: Chronicles: On Our Political and Economic Crisis by Thomas Piketty


I have read the most famous book
 
Capital in the Twenty First Century by Thomas Piketty and a good number of his academic entries but this compendium of essays is a revelation into his mind. I think, it is difficult to disagree with the subject of the essays especially as these articles were published after the great recession of 2008. Understandably, most of the essays are about the failure of European bureaucrats to assess the situation correctly and apply the right policy responses. No doubt, Thomas Piketty is a very perceptive and the complex nexus of the politics and economic choices of the European Union.

The two main themes of the book relate to his argument for the mutualization of the debts of countries in the Eurozone on the one side, and the need for higher taxes on wealth to support the existing social safety nets in France and most of Europe. debt Debt mutualization is an imperative for Eurozone countries because a single currency means the interest rates on public debt should converge. the absence of this convergence leads to the dd situation where Greece and Spain face different rates than France and Germany.

The more controversial proposal is that which proposes that taxation of endowments and wealth should be raised because the existing fiscal policy favours passage of wealth to people who do not have to work, unlike those who are employed. Piketty argues that higher taxes on wealth would be ensured if countries collaborated on disclosures of wealth held by their citizens across borders. While the argument that society faces a trade off between taxation of labour and capital is real, I am less convinced by the implicit assumption that a large state is inherently preferable.

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