3 Business Best-Sellers Show Inequality Is Now The Hot Topic
Best-selling business books typically tell you how to get rich — either by becoming a better worker or investor, or perhaps by learning the secrets of successful entrepreneurs.
And in 2014, readers could find plenty of books promoting pluck and hard work, such as MONEY Master the Game and The Innovators.
But three books broke the pattern, generating headlines and big sales by focusing on unfair aspects of wealth creation.
A decade ago, unfairness "was an underground topic; no one cared about it," says Branko Milanovic, a leading scholar on income inequality at City University of New York.
But since the 2008 financial crisis, "that has definitely been changing," he says. Writers now want to explore income inequality and economic unfairness. "It is such a big wave; it's not going away," he says.
These books rode that wave:
Three Business Best-Sellers Show Inequality Is Now The Hot Topic
Capital in the Twenty-First Century
by Thomas Piketty and Arthur Goldhammer
This magnum opus, chosen by the Financial Times as the best business book of the year, documents growing concentrations of wealth over time.
Filling nearly 700 pages, Piketty uses both quantitative economic history and literature to track and illustrate the accumulation of capital over time.
Armed with centuries' worth of data drawn from 20 countries, Piketty says returns on capital will always exceed rates of overall growth. The result is that wealthy investors get disproportionately richer than the average workers whose efforts create goods, foods and services.
Only government policies, such as heavy taxation of wealth, can help redistribute income in ways that allow for a fairer sharing of the economy's overall growth and rewards, he argues.
The Half Has Never Been Told: Slavery and the Making of American Capitalism
by Edward E. Baptist
Baptist's book narrows the focus from global wealth creation to America's rapid economic rise in the late 18th and 19th centuries.
A stinging indictment of slavery, The Half Has Never Been Told argues that U.S. capitalism flourished in the 19th century largely because Southern enslavers and Northern bankers were able to turn stolen labor into massive profits.
Many Americans believe capitalism flourished on U.S. soil because of positive factors, such as technological innovation, high literacy rates, natural resources, strong contract law and so forth. But Baptist says the fundamental advantage was that Southern slave labor camps, known as plantations, were highly productive and profitable.
Enslavers used improvements in transportation and the opening of new markets to produce and sell more cotton, and thereby get richer from the labor they stole. That in turn allowed Northern bankers, manufacturers and merchants to further profit from the cotton industry.
His book shows American economic "exceptionalism" in a very different light: Tales of Yankee ingenuity and all-American gumption may sound good, but it was the crack of whips and clank of chains that accompanied U.S. growth.
by Michael Lewis
Lewis makes a case that the stock market was rigged to allow firms using hyper-speedy advantages to jump in front of "mom-and-pop" investors.
In Flash Boys, he explores the ways Wall Street trading has changed from the days when an investor could "bid" on a stock to buy it, and a shareholder could "ask" for a price to sell. These traditional transactions would help companies raise money to expand their operations and hire workers.
But then the game changed, becoming an unfair race among high-frequency traders using algorithms and new technologies to get milliseconds ahead of each other. Lewis argues this ferocious push to gain speedy advantages helped enrich a few on Wall Street, but did nothing for Main Street companies seeking long-term investors.
Each book sets out to reframe debates about how rich people get ahead. Each argues that a fundamental lack of fairness generated wealth inequality.
Alexander Field, a Santa Clara University economics professor who studies inequality, says that in the wake of the Great Recession, legions of academics and authors have started exploring questions about unfairness of process and inequality of outcomes.
"Tremendous wealth has been created for individuals, but has it contributed to a social gain?" Field says is the question being pondered.
He says the United States enjoyed "a golden age" of rising income equality in the decades following World War II — an era when good factory jobs and corporate expansions allowed average Americans to advance quickly. But in more recent years, factors such as increasing automation and globalization have given rise to more inequality, he says.
"That change creates fertile ground for Piketty and others who want to explore inequality," Field says.
Angus Deaton, a Princeton economist and scholar on inequality, agrees that readers can expect to see far more books on inequality in coming years.
Traditionally, "Americans were less interested in these issues than other people" in Europe and elsewhere, he says. But Deaton says that since 2008, he has seen "a huge surge of interest" in understanding why so many people are falling behind.
"A lot of people, including me, are worried that inequality will lead to bad things."
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