• A Book Review of Time For Socialism, by Thomas Piketty.1
Time For Socialism author Thomas Piketty boasts a doctorate in economics, publishes papers regularly in top economics journals, teaches economics at the Paris School of Economics, and was once on the economics faculty at M.I.T. Yet not only are the 333 pages of his 2021 book utterly empty of economic reasoning, the reasoning that does infuse those pages is painful for an economist to encounter. Reading this book—which is a collection mostly of Piketty’s columns for Le Monde—literally hurt my head.

The aching caused by reading this book isn’t a result of my immense ideological distance from Piketty. Having read and reviewed2 his 2014 Capital In the Twenty-First Century, I—a Hayekian liberal—have long known that Piketty is a man of the far left, and I have no trouble dealing with even gaping ideological differences. What hurt my economist’s head was trying to make sense of a worldview that would approach plausibility only in an alternate universe in which the most basic principles of economics, as I understand them, don’t apply.

In Piketty’s universe, the tools, enterprises, and economic processes that are necessary for modern prosperity just materialize, as if out of thin air. About the formation and operation of capital goods and services the reader gets no information beyond the alleged fact that, above a certain level, wealth—that is, the value of capital—”tends to grow mechanically.”3 An implication of this mysterious reality is that, because the value of capital depends upon the value of what it produces, the total output generated by capital also tends to grow mechanically. In Piketty’s universe, then, capital goods and services are neither caused by—nor affected by—entrepreneurship, risk-taking, and individuals’ private investment choices. Economic and social institutions thus have almost no impact on wealth creation. Ditto for economic and fiscal policies. Adam Smith’s 1776 inquiry into how institutions and norms cause the wealth of nations4—Smith’s investigation into how different institutions and norms cause differences in the wealth of nations—must be for Piketty a project wholly sterile and inexplicable.

My best guess is that Piketty is enough of a Marxist to assume that that which “mechanically” generates businesses, factories, tools, and all other productive assets are the historical forces that form society. The toil of physically extracting from capital the outputs with which capital is pregnant is left to laborers, but Piketty’s belief that the value of capital “tends to grows mechanically” allows for only very minor variation over time in the total amount of final output that labor helps capital to birth.

It follows that in Piketty’s universe, any unusually great wealth and income possessed by entrepreneurs, investors, and corporate managers is unearned and, hence, unjustified. Having done nothing to produce their outsized bounties, capitalists will not be incited by near-confiscatory taxation to change their economic behavior in ways that will injure society. How could they be so incited, given that the value of capital under their control “tends to grow mechanically”? Transferring the proceeds derived from this heavy taxation to workers and the poor will simply ensure that everyone in society obtains his and her fair share of what is overwhelmingly the result of inexorable social forces—forces that are in no way explained by bourgeois economic ‘reasoning’ of the sort popularized by the likes of Milton Friedman and F. A. Hayek, and calamitously put into public-policy practice by political rogues, most notably Margaret Thatcher, Emmanuel Macron, and Ronald Reagan.

It’s no surprise, then, that not once in this book does Piketty bother to argue substantively against economists’ familiar prediction that taxing incomes at exorbitant rates discourages income-earning activity. On the few occasions when he acknowledges the existence of such concerns, he breezily dismisses them by asserting that they are unsupported by evidence. For Piketty, bothering to explain why taxing incomes or wealth will not diminish society’s flow of income or its stock of wealth is as pointless as would be bothering to explain why taxing the performance of rain dances will not diminish the amount of rain that falls from the heavens. Just as it’s foolish beyond comment to suppose that rain dancers create rain, it’s equally foolish, Piketty seems to think, to suppose that entrepreneurs and investors create wealth.

You might suspect that I exaggerate or miss important nuances in Piketty’s strange vision of economic reality. I don’t think that I do. Throughout Time for Socialism, Piketty describes cuts in taxes owed by wealthy people as “gifts to the rich”5 or as “tax gifts to the most wealthy.”6 For Piketty, this language isn’t hyperbole; it’s evidence of his sincere belief that human agency plays no role in creating capital and in ensuring that capital is employed productively. Doing nothing to earn their disproportionately large shares of society’s “mechanically” produced wealth, the rich are given “gifts” if and whenever the state reduces their tax burdens.

Any person who believes that the value of capital “tends to grow mechanically” is a person who is either ignorant of economics or who rejects it wholesale. For such a person (and Piketty is indeed one) an ultimate reality of economics—scarcity—applies only to consumption and not to production.

Because wealth isn’t superabundant, Piketty correctly recognizes that, when it comes to consumption, trade-offs are inescapable. Goods and services consumed by Liliane and Alcide are unavailable to be consumed by Adrienne and Jacques. But in Piketty’s universe, because production is largely automatic and mechanical, it occurs independently of human choices and effort and, hence, imposes on humanity no need to make sacrifices or trade-offs. Taxing wealth away from Liliane and Alcide reduces only Liliane’s and Alcide’s ability to consume as it increases consumption opportunities for Adrienne and Jacques. Such taxation, however, has no impact on the amount of wealth that is produced.

Therefore, all effort poured by economists into understanding how incentives and constraints inspire, direct, or discourage entrepreneurship and investment are pointless. Also apparently wasted are the research by the Nobel-laureate economists Ronald Coase, Herbert Simon, George Stigler, and Oliver Williamson into the determinants of the size and scope of firms and the organization of industries. Because the value of capital—and, hence, output—grow mechanically, any suspicion that changes in taxes, legal rules, or regulatory constraints affect the economy’s capital structure or its flow of output is a mere illusion, one that undoubtedly is produced by the distorted lenses worn by bourgeois economists. As far as production is concerned, its mechanical occurrence means that no trade-offs are necessary or even possible.

The above describes the economic universe as understood by Piketty. Only in such a universe would the confiscatory taxation and radical wealth redistribution for which he yearns be ethically justified and economically harmless.

“Given the bizarreness of Piketty’s economic vision, the reader is not surprised to find in his work fatal inconsistencies.”

Given the bizarreness of Piketty’s economic vision, the reader is not surprised to find in his work fatal inconsistencies.

One such inconsistency arrives when Piketty asserts that “long-term economic performance is primarily determined by investment in training.”7 Well. Now that we’re told that improving the training of workers improves the performance of capital, it’s impossible to believe that the value of capital “tends to grow mechanically.” What’s left of the asserted non-role of capitalists in affecting the value of capital once we learn that economic growth is affected “primarily” by the choices humans make regarding how much, and presumably which sorts of, human training to demand and supply? After all, prominent among those who surely have incentives to provide at least some worker training are workers’ capitalist employers.

And so might the amount of worker training currently supplied by real-world employers be optimal? A strong case can be made that it is, especially given that when Piketty measures the growth over time of the value of non-human capital he finds that this growth appears to happen “mechanically.” But if, instead, privately provided worker training is suboptimal, what’s the best way to provide more and better training? Is the answer to entrust government, as Piketty predictably wishes, with more money to supply training? Or might a better way to improve training be through changes in labor law, or increases in the amount of training expenses that employers are allowed to deduct from their taxes? And how about, contrary to Piketty’s demand for a higher minimum wage, lowering or eliminating minimum wages, thus enabling more low-skilled workers to find employment—employment that gives workers valuable on-the-job experience and training?

Questions such as these are naturally asked by economists. Questions such as these are never asked by Piketty.

A second inconsistency is highlighted by Piketty’s insistence that worker training doesn’t merely positively affect economic performance, but that such training is the primary determinant of performance. This insistence, though, is at odds with Piketty’s exclusion of human capital from his measures of capital.

Central to Piketty’s case for confiscatory taxes on the rich is his alleged empirical demonstration that, over the past 40 or so years, the rich have accumulated a steadily growing share of ownership of capital. With the increasing concentration of capital ownership comes, alleges Piketty, increasing economic power exercised by the superrich. But if worker training is really as important as Piketty asserts it to be—and, of course, it truly is important—then the non-human capital owned by the superrich is of little value without the human capital owned by workers.

Because, as it now turns out, non-human capital delivers most of its rewards to its owners, not mechanically, but only by combining with human capital—and because, by Piketty’s admission, human capital is the primary determinant of economic performance—capitalists will compete as fiercely for workers as they do for any other valuable assets. Indeed, if Piketty is correct that there is now a dearth of worker training, today’s competition among capitalists for the relatively few workers who are well-trained must be especially intense, causing wages for such workers to be inordinately high and, in turn, giving heightened incentives to other workers to get more training. You’ll not be surprised to learn that Piketty is oblivious to these implications of his assertions.

Whether or not the amount of human capital that exists is suboptimal, today’s high living standards imply that a great deal of such capital nevertheless does exist. This implication holds even if, contrary to fact, Piketty is correct to assert that nearly all of the fruits of economic growth over the past 40 years have been captured by the undertaxed superrich. Yet Piketty’s measure of capital ownership—and, hence, his asserted demonstration that ownership of capital is becoming dangerously more concentrated—loses most of its meaning as a result of its exclusion of human capital, the “primary” determinant of economic performance. As Deirdre McCloskey explained in her review of Capital In the Twenty-First Century,8

  • The only reason in the book to exclude human capital from capital appears to be to force the conclusion Piketty wants to achieve. One of the headings in Chapter 7 declares that “capital [is] always more unequally distributed than labor.” No it isn’t. If human capital is included—the ordinary factory worker’s literacy, the nurse’s educated skill, the professional manager’s command of complex systems, the economist’s understanding of supply responses—the workers themselves, in the correct accounting, own most of the nation’s capital—and Piketty’s drama falls to the ground.

Piketty’s obliviousness to this major flaw and inconsistency in his work is stunning.

For more on these topics, see

Even to list, let alone to substantively expose, all of the other inconsistencies that Piketty stuffed into this volume would fill a thick monograph. A not-insubstantial book would be necessary to fully document, in addition to the inconsistencies, Piketty’s historical inaccuracies, non sequiturs, and head-scratching pronouncements, including this gem of a conclusion—presented as a regrettable discovery—to a discussion of the trend of “concentration of ownership” over the past century: “The poorest 50% of the world’s population is still the poorest 50% of the world’s population.”

This book isn’t the work of a serious economist. Instead, it’s a tract composed by someone who is blindingly obsessed with differences in monetary incomes and wealth yet has no earthly idea what really causes these differences or what would be the consequences that would curse humanity if his confiscatory piracy were put into practice.


[1] Thomas Piketty, Time for Socialism: Dispatches from a World on Fire, 2016-2021. Yale University Press, Oct. 26, 2021.

[2] Donald J. Boudreaux, “Piketty: A Wealth of Misconceptions.” Mercatus.org. Originally published in Barron’s, May 31, 2014.

[3] Piketty, p. 40.

[4] I refer, of course, to Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations, available online at the Library of Economics and Liberty

[5] Piketty, p. 247.

[6] Piketty, p. 147.

[7] Piketty, p. 76.

[8] Deirdre N. McCloskey, “How Piketty Misses the Point,” a CATO Policy Report, July/August 2015.

*For helpful comments on an earlier draft I thank Veronique de Rugy.

Donald J. Boudreaux is Professor of Economics at George Mason University and Senior Fellow with the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at George Mason’s Mercatus Center. He blogs at Café Hayek (www.cafehayek.com).

For more articles by Donald J. Boudreaux, see the Archive.

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