Reflections on “Capital in the 21st Century” Some thoughts after slogging my way through Thomas Pickety's Capital in the 21st Century (577 pages), some of which have to be read three or four times in order to achieve even a modicum of comprehension. Despite this, the book is a best seller, and references to it keep showing up all over the place. His major premise is that as long as the rate of return on capital ( r ) is greater than the rate of growth ( g ) (economic and/or demographic) economic inequality will keep increasing (divergence) until a relative handful of people own 90% or more of all capital (Real Estate, financial assets, gold, diamonds and other natural resources – especially oil and gas, etc.). Disruptions in the 20th Century (wars and the confiscatory taxes to pay for them) temporarily reduced the divergence that had been typical for most of recorded history. As an aside, note that Reinhold Niebuhr, in Moral Man and Immoral Society, wrote that complex societies always create a privileged minority. Pickety provides voluminous data as evidence that this divergence is rapidly increasing yet again. He correctly places much of the blame for this on what he calls Reaganism and Thatcherism (I call it the Reagan/Thatcher Devolution), which began a process of slashing the taxes on excess income that had limited outsized, income demands by the 1% and created a healthy middle class in most of the developed world (now rapidly disappearing!). The present levels of excess income are truly obscene. His preferred solution (which is politically unfeasible, to say the least) is a progressive tax on world-wide wealth. Of course, if it were not world-wide, the wealthy could simply continue to move their assets from country to country. Such a tax would necessarily require total International transparency, aka no cheating on taxes. Good luck with that, Mr. Pickety; but the following quote is worth repeating (if not shouting): “The most plausible reason why tax havens defend bank secrecy is that it allows their clients ot evade their fiscal obligations, thereby allowing the tax havens to share in their gains.Obviously, this has nothing whatsoever to do with the principles of the market economy. No one has the right to set his own tax rates. It is not right for individuals to grow wealthy from free trade and economic integration (globalization) only to take off the profits at the expense of their neighbors. THAT IS OUTRIGHT THEFT [my emphasis].”