Capital in the Twenty-First Century—in the Rest of the World

Bibliographic Data

ID6232932
AuthorsMichael Albertus (0000-0002-3341-8687, University of Chicago), Victor Menaldo (0000-0002-5663-0322, University of Washington)
Year2016
Volume19
Issue1
Pages49-66
Publication date2016-05-11
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueAnnual Review of Political Science (BOOK_SERIES)
Journal identifiersISSN: 1094-2939 • E-ISSN: 1545-1577
PublisherAnnual Reviews (PUBLISHER • US)
DOI10.1146/annurev-polisci-042114-015008
OpenAlexW2219928400
LanguageEN
Citations received12
References cited69

Recent work has documented an upward trend in inequality since the 1970s that harks back to the Gilded Age: the inegalitarian pre–World War I world. Most prominently, Thomas Piketty argues in Capital in the Twenty-First Century that this is partially due to the fact that capitalism is hardwired to exacerbate the gap between the rich and poor. By critically evaluating recent literature on this topic, this article offers three big contributions. First, we advance an alternative explanation for the long-term U-shaped nature of inequality that Piketty examines. Political regime types and the social groups they empower, rather than war and globalization, can account for the sharp fall and then sharp rise in inequality over the long 20th century. Second, we demonstrate that this U-shaped pattern only really holds for a handful of industrialized economies and a subset of developing countries. Finally, we provide a unified framework centered on two unorthodox assumptions that can explain inequality patterns beyond the U-shaped one. Capitalists and landholders actually prefer democracy if they can first strike a deal that protects them after transition. This is because dictators are not the loyal servants of the economic elite they are portrayed to be—in fact, they are often responsible for soaking, if not destroying, the rich under autocracy

Autocracy · Capital (architecture · Capitalism · Democracy · Development economics · Economic inequality · Economics · Elite · Globalization · Inequality · Market economy · Neoclassical economics · Political economy · Political science · Politics · Rest (music · Sociology · World War II · History · Housing, Finance, and Neoliberalism · Income, Poverty, and Inequality · Law · Social Policy and Reform Studies

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