Piketty and Marx's Rising Organic Composition of Capital: Review of Capital in the Twenty-First Century by Thomas Piketty

Piketty's Capital in the Twenty-First Century is a factual masterpiece, carrying out an extremely important task in establishing beyond doubt the rapid increase in global and national inequality in the last three decades. But Piketty's own theoretical framework cannot adequately explain his factual findings. In fact, Piketty's findings are easily accounted for by Marx's analysis of the rise in the organic composition of capital-that is, the increase in the percentage of the economy devoted to investment. Marx's findings were in line with his predecessors Smith and Ricardo, and later also with Keynes, and are confirmed by modern econometrics. Marx's analysis grounds Piketty's findings on rising inequality in not only economic distribution but also production. Piketty's critique of Marx is based on misrepresentation-although this may be due to insufficient study. Piketty's findings on wealth distribution confirm, from another angle, modern findings on production which similarly correspond to Marx's theoretical framework.