--- product_id: 16419040 title: "The Economics of Inequality" price: "AR$101938" currency: ARS in_stock: null reviews_count: 8 url: https://www.desertcart.com.ar/products/16419040-the-economics-of-inequality store_origin: AR region: Argentina --- # The Economics of Inequality **Price:** AR$101938 **Availability:** ❌ Out of Stock ## Quick Answers - **What is this?** The Economics of Inequality - **How much does it cost?** AR$101938 with free shipping - **Is it available?** Currently out of stock - **Where can I buy it?** [www.desertcart.com.ar](https://www.desertcart.com.ar/products/16419040-the-economics-of-inequality) ## Best For - Customers looking for quality international products ## Why This Product - Free international shipping included - Worldwide delivery with tracking - 15-day hassle-free returns ## Description NY Times Bestselling Author Explore the Books Review: Short, very important, book on economic inequality in America and Europe - Piketty's other books tend to run 500 pages or more (~700 pages for "Capital in the 21st Century"), tomes that require a significant time commitment to get through. In "The Economics of Inequality", Piketty boils down the data to about 140 pages (plus endnotes), and explains the causes of economic inequality. This book blew my mind, because Piketty showed clearly the problem in America is *not* the billionaires. The diverging wages between average college grads (particularly tech trained ones) and folks with a high school degree and no special skills over the last 50 years is the problem. In 1970, the wages of the top of the middle 80% of full-time workers were about 3.4X higher than full-time workers at the bottom. Today that ratio is 4.8X. In Sweden today, the ratio is 2.4X. Economic inequality in America is caused by lower wage full-time being paid dramatically less than higher wage full-time workers. The pay of full-time fast food workers vs. software engineers, not the wealth of the 99% vs. the 1%, is the cause of economic inequality in America. But don't believe me. Read "The Economics of Inequality" for yourself. Review: Mixes theory and empiricism well - Having read Capital prior to The Economics of Inequality, I expected empiricism to come first and theory second. However, I was pleasantly surprised to find a more palatable balance of the two. Piketty's goal is to determine whether or not "social justice" policies can be justified using economic reasoning, and if so what is the best policy mix. Piketty quickly introduces the reader to Rawls' "Maxamin" social justice theory, the idea that policies should aim to maximize the minimum opportunity available to everyone. In order to satisfy this goal, he offers two broad policy categories: direct redistribution (wage/price/industrial policies) vs. fiscal redistribution (tax and transfer). His aim is to separate the policies that pull economies from Pareto efficiency (pure redistribution), and those that push economies toward Pareto efficiency. Thus, while Marxist political theory is always in the background, political ends are not necessarily placed ahead of economic ends. A constant theme throughout the book involves the role of prices. Are they allocative or simply distributive (between capital owners and laborers)? Supporters of the allocative role of prices note that if the price of labor is lower relative to capital, labor-intensive firms will expand more than capital-intensive firms given the relative cheapness of labor...and vice-versa. Supporters of the distributive role of prices believe that the aggregate workforce is a fixed function of the capital stock, focusing on bargaining power of the laborer relative to the capital owner in wage setting. As long as capital-labor substitution is possible, fiscal redistribution allows for capital income to be shifted to labor without the negative effects on the cost of labor/level of employment that generally accompany direct redistribution (i.e. increasing minimum wage and benefits). In this case, fiscal redistribution does not have an allocative impact on prices, though it may impact saving/capital accumulation. If the elasticity of capital-labor substitution is >1, a 1% increase in wages will result in a >1% decrease in employment. Labor's share of income would fall in this scenario. If <1, direct redistribution may be better. If =0, then prices are arguably purely distributive and not allocative. If the elasticity of capital-labor substitution were to truly equal 0, Marxism would be supported in that the capital owner need not exist. The existing stock of capital must simply be matched to an appropriate workforce and a certain amount of output directed to its maintenance and increase over time (although Piketty acknowledges that this still doesn't fully address the price system's ability to direct production). Regarding the impact of fiscal redistribution on saving/capital accumulation, one must look to the elasticity of the supply of capital. Empirically, the elasticity of the supply of capital is close to zero for individual households, implying that a 1% reduction in the return on capital does not translate into a similar reduction in savings. It actually suggests people save more to achieve desired future income, despite increased attractiveness of current consumption. This applies to interest rate levels as well, in that higher rates may actually lead to less saving since desired future income can be achieved without giving up as much current consumption. For firms, however, even if the elasticity of the capital supply is low, on an international stage firms can shift capital to low-tax regimes, potentially causing domestic unemployment. In the context of bargaining power, Piketty discusses the battle between the monopoly power of unions and the monopsony power of employers. Monopsony power comes from firm-specific human capital and limitations on geographical mobility. If an employer is in fact a monopsony, fiscal redistribution would simply allow employers to lower wages, negating positive effects. He talks about low wage opportunities disappearing (underemployment and lower participation rates) starting in the '70s, offering explanations like incarceration. He also notes increased inequality since 1970 may be due to skill-based technological change, where new technology places a premium on previously untapped skills. However, more broadly, he notes that the standard of living was roughly 10 times higher in 1990 than in 1870, undeniably due to increases in the productivity of labor. Piketty highlights that, due to the inter-temporal nature of credit markets, issues such as adverse selection, moral hazard, lack of borrowing credit data, concentrated ownership, and political risks may impede international capital flows, slowing convergence between poor and rich countries. He says that credit rationing as a solution has often failed for lack of direction on how to allocate, and that granting land and capital (redistribution) has been more successful. Additionally, Piketty attacks the "Kuznets inequality curve," which says that inequality is high when countries are in the early stages of development but then converge thereafter, for the lack of any natural mechanism to support it. Regarding education, Piketty states that compulsory education should have large effects on human capital, but more funding/resources may not impact generational mobility if family well-being is a benchmark for individual success. In other words, if inequality is sourced at the family level, throwing more money at education may be in vain. Towards the end, Piketty touches on Keynesian stimulus, saying tax and spend may be useful for redistribution but as stimulus it's on shaky theoretical grounds. He seems to acknowledge and accept the "stickiness" of wages and prices, but rejects the paradox of thrift, stating that purchasing power is nearly always consumed or invested in some way. Thus it doesn't matter if the wealthy are investing or the poor are spending, tax and spend doesn't logically provide stimulus. However, he points out that the makeup of consumption (i.e. the industries stimulated) may matter, but notes that stimulus tends to be short term. For deficit stimulus, he notes that the return on capital may increase as the stock of public debt grows (presumably from a crowding-out-type effect), potentially resulting in undesirable upward redistribution. Overall, particularly in the first half of the book, Piketty creates an easy to follow flow from theory to empiricism and back. The step-wise process is reader friendly and is helpful for understanding how external effects of policy ripple from one area to another. I really appreciate the fact that he often restated free-market arguments in full, committing serious time to ensuring the reader understands both sides of the discussion...an intellectually honest strategy that my have been lost a little in Capital. ## Images ![The Economics of Inequality - Image 1](https://m.media-amazon.com/images/I/41RHo3vAppL.jpg) ## Customer Reviews ### ⭐⭐⭐⭐⭐ Short, very important, book on economic inequality in America and Europe *by A***E on March 9, 2020* Piketty's other books tend to run 500 pages or more (~700 pages for "Capital in the 21st Century"), tomes that require a significant time commitment to get through. In "The Economics of Inequality", Piketty boils down the data to about 140 pages (plus endnotes), and explains the causes of economic inequality. This book blew my mind, because Piketty showed clearly the problem in America is *not* the billionaires. The diverging wages between average college grads (particularly tech trained ones) and folks with a high school degree and no special skills over the last 50 years is the problem. In 1970, the wages of the top of the middle 80% of full-time workers were about 3.4X higher than full-time workers at the bottom. Today that ratio is 4.8X. In Sweden today, the ratio is 2.4X. Economic inequality in America is caused by lower wage full-time being paid dramatically less than higher wage full-time workers. The pay of full-time fast food workers vs. software engineers, not the wealth of the 99% vs. the 1%, is the cause of economic inequality in America. But don't believe me. Read "The Economics of Inequality" for yourself. ### ⭐⭐⭐⭐ Mixes theory and empiricism well *by D***G on December 11, 2017* Having read Capital prior to The Economics of Inequality, I expected empiricism to come first and theory second. However, I was pleasantly surprised to find a more palatable balance of the two. Piketty's goal is to determine whether or not "social justice" policies can be justified using economic reasoning, and if so what is the best policy mix. Piketty quickly introduces the reader to Rawls' "Maxamin" social justice theory, the idea that policies should aim to maximize the minimum opportunity available to everyone. In order to satisfy this goal, he offers two broad policy categories: direct redistribution (wage/price/industrial policies) vs. fiscal redistribution (tax and transfer). His aim is to separate the policies that pull economies from Pareto efficiency (pure redistribution), and those that push economies toward Pareto efficiency. Thus, while Marxist political theory is always in the background, political ends are not necessarily placed ahead of economic ends. A constant theme throughout the book involves the role of prices. Are they allocative or simply distributive (between capital owners and laborers)? Supporters of the allocative role of prices note that if the price of labor is lower relative to capital, labor-intensive firms will expand more than capital-intensive firms given the relative cheapness of labor...and vice-versa. Supporters of the distributive role of prices believe that the aggregate workforce is a fixed function of the capital stock, focusing on bargaining power of the laborer relative to the capital owner in wage setting. As long as capital-labor substitution is possible, fiscal redistribution allows for capital income to be shifted to labor without the negative effects on the cost of labor/level of employment that generally accompany direct redistribution (i.e. increasing minimum wage and benefits). In this case, fiscal redistribution does not have an allocative impact on prices, though it may impact saving/capital accumulation. If the elasticity of capital-labor substitution is >1, a 1% increase in wages will result in a >1% decrease in employment. Labor's share of income would fall in this scenario. If <1, direct redistribution may be better. If =0, then prices are arguably purely distributive and not allocative. If the elasticity of capital-labor substitution were to truly equal 0, Marxism would be supported in that the capital owner need not exist. The existing stock of capital must simply be matched to an appropriate workforce and a certain amount of output directed to its maintenance and increase over time (although Piketty acknowledges that this still doesn't fully address the price system's ability to direct production). Regarding the impact of fiscal redistribution on saving/capital accumulation, one must look to the elasticity of the supply of capital. Empirically, the elasticity of the supply of capital is close to zero for individual households, implying that a 1% reduction in the return on capital does not translate into a similar reduction in savings. It actually suggests people save more to achieve desired future income, despite increased attractiveness of current consumption. This applies to interest rate levels as well, in that higher rates may actually lead to less saving since desired future income can be achieved without giving up as much current consumption. For firms, however, even if the elasticity of the capital supply is low, on an international stage firms can shift capital to low-tax regimes, potentially causing domestic unemployment. In the context of bargaining power, Piketty discusses the battle between the monopoly power of unions and the monopsony power of employers. Monopsony power comes from firm-specific human capital and limitations on geographical mobility. If an employer is in fact a monopsony, fiscal redistribution would simply allow employers to lower wages, negating positive effects. He talks about low wage opportunities disappearing (underemployment and lower participation rates) starting in the '70s, offering explanations like incarceration. He also notes increased inequality since 1970 may be due to skill-based technological change, where new technology places a premium on previously untapped skills. However, more broadly, he notes that the standard of living was roughly 10 times higher in 1990 than in 1870, undeniably due to increases in the productivity of labor. Piketty highlights that, due to the inter-temporal nature of credit markets, issues such as adverse selection, moral hazard, lack of borrowing credit data, concentrated ownership, and political risks may impede international capital flows, slowing convergence between poor and rich countries. He says that credit rationing as a solution has often failed for lack of direction on how to allocate, and that granting land and capital (redistribution) has been more successful. Additionally, Piketty attacks the "Kuznets inequality curve," which says that inequality is high when countries are in the early stages of development but then converge thereafter, for the lack of any natural mechanism to support it. Regarding education, Piketty states that compulsory education should have large effects on human capital, but more funding/resources may not impact generational mobility if family well-being is a benchmark for individual success. In other words, if inequality is sourced at the family level, throwing more money at education may be in vain. Towards the end, Piketty touches on Keynesian stimulus, saying tax and spend may be useful for redistribution but as stimulus it's on shaky theoretical grounds. He seems to acknowledge and accept the "stickiness" of wages and prices, but rejects the paradox of thrift, stating that purchasing power is nearly always consumed or invested in some way. Thus it doesn't matter if the wealthy are investing or the poor are spending, tax and spend doesn't logically provide stimulus. However, he points out that the makeup of consumption (i.e. the industries stimulated) may matter, but notes that stimulus tends to be short term. For deficit stimulus, he notes that the return on capital may increase as the stock of public debt grows (presumably from a crowding-out-type effect), potentially resulting in undesirable upward redistribution. Overall, particularly in the first half of the book, Piketty creates an easy to follow flow from theory to empiricism and back. The step-wise process is reader friendly and is helpful for understanding how external effects of policy ripple from one area to another. I really appreciate the fact that he often restated free-market arguments in full, committing serious time to ensuring the reader understands both sides of the discussion...an intellectually honest strategy that my have been lost a little in Capital. ### ⭐⭐⭐⭐⭐ Extremely Valuable Book *by S***E on April 29, 2021* Thomas Picketty, as an author, make reading enjoyable. As a scholar, he has an uncanny ability to process large amounts of data, interpret and expand theoretical explanations, and turn complex ideas and problems into understandable written works. ## Frequently Bought Together - The Economics of Inequality - Nature, Culture, and Inequality: A Comparative and Historical Perspective - Capital and Ideology --- ## Why Shop on Desertcart? - 🛒 **Trusted by 1.3+ Million Shoppers** — Serving international shoppers since 2016 - 🌍 **Shop Globally** — Access 737+ million products across 21 categories - 💰 **No Hidden Fees** — All customs, duties, and taxes included in the price - 🔄 **15-Day Free Returns** — Hassle-free returns (30 days for PRO members) - 🔒 **Secure Payments** — Trusted payment options with buyer protection - ⭐ **TrustPilot Rated 4.5/5** — Based on 8,000+ happy customer reviews **Shop now:** [https://www.desertcart.com.ar/products/16419040-the-economics-of-inequality](https://www.desertcart.com.ar/products/16419040-the-economics-of-inequality) --- *Product available on Desertcart Argentina* *Store origin: AR* *Last updated: 2026-05-20*