Piketty blows whistle over widening disparity

格差拡大に警鐘を鳴らす   ベストセラーとなったピケティの「21世紀の資本」


“Capital in the 21st Century,” written by French economist Thomas Piketty, has captured the people’s hearts all over the world. Its Japanese translation that came out late last year has sold 130,000 copies so far, rather rare for a treatise on economics. The author points out that capitalism has a mechanism where wealth concentrates on rich people and that disparity between the rich and the poor widens as a result.


Disparity or inequality is not a new perception in Japan. “Unequal Society” ranked among the top ten “buzzwords of the year” in an annual contest in 2006. Explaining the background, UCAN! Ltd., the correspondence education and publishing firm that sponsors the contest, said at the time, “They say the country’s bipolarization has progressed and inequality has widened in wide areas such as income, education and occupation following the collapse of the once-popular idea that ‘all 100 million Japanese are middle class.’ Some call it a negative legacy left by the (Junichiro) Koizumi administration which pushed ahead with reforms and deregulations by making too much of the market principle.”


There is the reason why Piketty’s book is so popular in today’s Japan. That is the Abenomics, a policy mix pursued by the government of Prime Minister Shinzo Abe with the aim of halting the prolonged stagnation and deflation. It consists of what he calls “three arrows”: monetary easing, fiscal stimulus and growth strategies. His government has so far released the first two arrows. They have begun stimulating the flagging economy.


The third arrow of growth strategies is primarily aimed at reviving private investment. It is based on the theory that the growth of private businesses will eventually lead up to higher wages. Forming the core of the theory are the “white color exemption” or the so-called “no overtime pay” legislation and a corporate tax reduction. It is obviously aiming to bring about the “trickle-down effect,” an economic theory that when high-income persons become richer, their benefit will naturally spill over into low-income persons, making all people richer.


However, there are persistent criticisms about the trickle-down effect that the rich become richer and the poor become poorer. This coincides with what Piketty contends. That is perhaps why his book sells well in Japan.


The Nikkei stock index closed at 19,754.36 on March 23, coming closer to the 20,000 mark which it lost back in October 1990. Few Japanese may doubt that Abenomics is helping the Japanese economy pick up. However, the question here is whether his government will come out with a policy that will prevent the disparity between the rich and the poor widening in the process of economic recovery under its growth strategies.


Anyway, Piketty has sounded a warning over the expanding inequality, triggering a lot of arguments among Japanese people. That being said, his book published by Misuzu Shobo is priced at 5,940 yen. Students cannot readily afford to pay that much. A sarcastic price, isn’t it?


(Written by: Masashi Takinose)