Capital in the Twenty-First CenturyCapital in the Twenty-First Century by Thomas Piketty

My rating: 4 of 5 stars

Took me long enough. Everything that needs to be said about the book has already been said. For me, it’s the best place to go to to understand historical trends in returns to labour and capital in selected developed countries and how tax policies have resulted in increasing wealth and income inequalities. Of course, such an analysis would be relevant in developing economies in South Asia, Latin America and Africa, but the lack of quality data is a concern. In recent years, several projects across the world are trying to construct time series data for various developing countries to estimate wealth and income inequalities. Understanding these trends is crucial to fiscal policy around the world. As the fears of a prolonged recession continue and institutions like the WTO are forcing developing countries to decrease trade taxes, there is significant base erosion that has decreased quality of public services in these countries. This argument of decreasing quality of government services is used by MNCs based out of tax havens to work with corrupt developing country governments to privatise public goods. As cost of essential services like education, health, food, water supply and sanitation increase, quality of life of the poor and marginalised population suffer and developing countries are not allowed to follow the same growth path that the developed countries had the luxury to follow.

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