The title of Piketty’s bestseller, Capital in the Twenty-First Century, is an allusion to Marx’s magnum opus. Piketty possessed, apparently, an advantage that Marx lacked: two centuries’ worth of hard data. Nearly all agree that the greatest strength of Piketty’s book is, without doubt, his empirical data.
That is a big question.
McShane’s introductory book is an invitation to dare to ask this big question. In Piketty's Plight and the Global Future he argues that Piketty rightly takes contemporary economics to task for its preoccupation with “petty mathematical problems” in its attempt to appear scientific and rigorous. But he adds that despite its massive appeal to data, Piketty’s bestseller is insufficiently radical to the extent that it remains trapped in muddled descriptive categories, haunted by flaws in selecting and ordering the significant data.
"Philip McShane is a polymath whose passion among other things is economics. In this slender volume McShane takes on the bestselling economics text by Thomas Piketty, Capital in the 21st Century. Without a better macroeconomic theory, McShane argues, the huge statistical analysis that Piketty did in arguing that a rent economy like the present global order is headed for a crash, is flawed. He introduces the basic outline of an alternative theory, whose starting point is the fact that there are always two economies, consumer and producer, which are intimately but not completely linked. Failure to understand how these work and do not work together is the reason that macroeconomic models have failed humanity over and over again. The style of McShane’s text is light, as opposed to the usual economics text, the price is ridiculously low, and the ideas will appeal to a general audience."
"Justin Wolfers of the New York Times has written that over 80% of economists surveyed disagree with Piketty's "r > g" hypothesis on wealth inequality (the idea that a gap between the after-tax return on capital "r" and the economic growth rate "g" has led towards greater wealth inequality in the US). Piketty's book has stirred much debate over the origins and measurement of inequality. Phil McShane's Piketty's Plight and the Global Future opens up new perspectives on this issue based on Bernard Lonergan's own original views on economics dating back to the 1940's. Lonergan's economics, which detail both the basic and surplus stages of the productive process, leads McShane to see the roots of Piketty's "r > g" valuation as based on dubious "facts" that do not offer meaningful policy alternatives for our times. Relying on the work of Lonergan, McShane offers a precisely empirical and critical economic paradigm."
"I found this book to be extremely interesting, even enlightening. Gross disparities in income, and their causes and cures, have become a fashionable topic in the academic world and in the popular press. Perhaps this is because extreme income inequality is increasing, and perhaps also because an older generation of political scientists, economists, and journalists has passed away, leaving room for a fresh approach to what had become tired topics."
"If Piketty has exposed the international scope of the problem of economic inequality, McShane is making the next, even more important point. What point? That only a new macro-dynamic theory of local, national and international relations will make it possible to deal with that problem. McShane attempts to sketch the new theory & its relevance for re-setting the unbelievably important issue that Piketty is forcing economic professionals to face, and which they do not have the tools to effect."