yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Capital by Thomas Piketty | Macroeconomics | Khan Academy


3m read
·Nov 11, 2024

Thomas Piketty's Capital in the 21st Century has been getting a lot of attention lately because it's addressing an issue that matters a lot to a lot of folks: the issue of income inequality and wealth inequality. My goal here isn't to have a view on the book, to say the book is all right or it's all wrong, but to really use this book as a tool to give you the critical thinking tools you need to make your own judgment.

The one thing that is neat about the book is that he makes all of the charts and figures available on his website. So, all of these screenshots that I got, these are from piketty.pse.ens.fr/en/capital21c2. I encourage you to go there on your own and to browse these charts because there's a lot of interesting charts. But as you do so, always look at them with both an open and a critical eye to see how what might make sense or what might not make sense or what questions start to emerge that you would like to dig deeper on.

Let me just start with this chart right over here because this begins to lay out what might be an issue. This is wealth inequality in the United States between 1810 and 2010. The way that they're measuring wealth inequality is the share of the top decile or percentile in total wealth. Here they're saying the top 1% share of wealth—that's this line right over here—and then you have the top decile, the top 10% share in wealth, so this right over here.

This data point—let me do this in magenta—this is telling us that based on his data, in 1810, the top 1% (the wealthiest 1%) had roughly, it looks like about 25% of the wealth of the country, and the top 10% had about, looks like it's almost maybe almost 60% of the wealth of the country. Then we see how this is trending, and it was trending up as we go through the 1800s all the way until the beginning of the 20th century. So this is the 19th century right over here, beginning of the 20th century.

In particular, we have this period in the last few decades—the last two or three decades of the 19th century, the 1800s—that's often known as the Gilded Age. The Gilded Age is associated with fairly dramatic wealth inequality. One of the questions that this book raises is: Are we entering into another Gilded Age? Now, if you just look at this trend line here, it's clear that the wealth inequality isn't as severe as it was in the, I guess you could say, formal Gilded Age. But it's a question of where is this going, and is this something that people should be concerned about?

So the question is: Is this trend line going to do what it did in the last few decades of the 19th century and do something like this, essentially maybe bringing at least this chart more in line with what happened during the first Gilded Age? Or is it going to do something like this? Or is it going to do something like that? Even if it does do something like this, are we going to have the same realities that we had in the first Gilded Age, where it's maybe disproportionate power associated with that wealth or whatever else?

These are all the types of questions that we should be thinking about. What type of a reality are we going into? What is the data that is making us believe one or the other? And what are the policy decisions on things like innovation or taxation or education that might lead us one way or another? I will dig deeper into all of those ideas over the series, over the next few videos in this tutorial.

More Articles

View All
How to Touch Down on Mars | StarTalk
All right, so let’s back up for a minute, because your specialty was getting the thing there safely. Yes, so that the scientists could do their job. And so, would I remember from Spirit and Opportunity? They preview that the previous round of this, they h…
Gordon Makes Smoked Fish Sausage | Gordon Ramsay: Uncharted
[Music] With one day until Chef James and I battle for the honor of being deemed Yupa, I’m off to meet a man who’s famous for three words you don’t normally hear together: smoked fish sausages. Now, sounds a bit mad, doesn’t it? Smoke fish sausage. But if…
Your Brain on Tech
[Music] Oh hello, technology isn’t just changing our lives; it’s changing our brains. Not just how they think, but how they look. It’s been shown that playing certain video games for hours can improve your memory for details, your ability to navigate spac…
Timur | 600 - 1450 Regional and interregional interactions | World History | Khan Academy
Where we left off in the last few videos, we saw the Empire of the Mongols fragment into the various Khanates. In the East, you have the Yuan Dynasty established by Kublai Khan, and then in the West, you have the Golden Horde, the Chagatai Khanate, and th…
Worked example: Finding the percent ionization of a weak acid | AP Chemistry | Khan Academy
Let’s say we have a 0.20 molar aqueous solution of acetic acid, and our goal is to calculate the pH and the percent ionization. The Ka value for acetic acid is equal to 1.8 times 10 to the negative fifth at 25 degrees Celsius. First, we need to write out…
Mohnish Pabrai SELLS his Alibaba Stock!
All right team, in this video we are talking about Monash Proprietor’s most recent 13F filings. So this gives us an update to what he was doing with his US listed stocks in the third quarter, of which he owns three: Micron’s, Heritage, and Alibaba. And le…