In his latest book, “Capital in the Twenty-First Century," Thomas Piketty argues that when the rate of return on capital exceeds economic growth, there is increasing wealth concentration. This dynamic was held at bay during the 20th century by the world wars (which destroyed significant portions of capital stock) and population growth. However, such forces may not occur in the 21st century, which Piketty argues could lead to an explosion in wealth disparity. He projects that this disparity could reach or surpass 19th century oligarchic levels and result in political and social upheaval. He proposes a global wealth tax as the solution to rising inequality.
Kevin Hassett provided a pointed critique of Piketty’s book at an event at the Tax Policy Center on April 15; his slides are posted here.