Many people join the political left driven by a concern for the poor. But, over the past several years, the Democratic Party has talked much more about the middle class than the poor. Meanwhile, progressive political movements like Occupy Wall Street directed their fervor at the top 1 percent. Progressive movies and books have focused their attention on conspiracy and oligarchy at the top, not "Grapes of Wrath" or "How the Other Half Lives" stories at the bottom.
This is natural. The modern left is led by smart professionals — academics, activists, people in the news media, the arts and so on — who tend to live in and around coastal cities.
If you are a young professional in a major city, you experience inequality firsthand. But the inequality you experience most acutely is not inequality down, toward the poor; it's inequality up, toward the rich.
You go to fundraisers or school functions and there are always hedge fund managers and private equity people around. You get more attention than them at parties, but your whole apartment could fit in their dining room. You struggle with tuition, but their kids go off on ski weekends. You wait in line at the post office, but they have staff to do it for them.
You see firsthand the explosion of wealth at the tippy-top. It really doesn't help that you have to spend your days kissing up to the oligarchs and their foundations to finance your research, exhibition or favorite cause.
The situation is ripe for the sort of class conflict that French sociologist Pierre Bourdieu used to describe: pitting those who are rich in cultural capital against those who are rich in financial capital.
And into this fray wanders Thomas Piketty. His book "Capital in the Twenty-First Century" argues that the real driver of inequality is not primarily differences in human capital. It's differences in financial capital. Inequality is not driven by young hip professionals who arm their kids with every advantage and get them into competitive colleges; it's driven by hedge fund oligarchs. Well, of course, this book is going to set off a fervor that some have likened to Beatlemania.
The book is very good and interesting, but it has pretty obvious weaknesses. Though economists are really not good at predicting the future, Piketty makes a series of educated guesses about the next century.
Piketty predicts that growth will be low for a century, though there seems to be a lot of innovation around. He predicts that the return on capital will be high, though there could be diminishing returns as the supply increases. He predicts that family fortunes will concentrate, though big ones in the past have tended to dissipate and families like the Gateses give a lot away. Human beings are generally treated in aggregate terms, without much discussion of individual choice.
But those self-acknowledged weaknesses are overlooked. And his policy agenda is perfectly suited to his market audience. The problem with those who stress financial capital inequality over human capital inequality is that up until now they have described a big problem but they have no big proposal to address it. Now they do: a global wealth tax. Piketty proposes that all the governments in the world, or at least the big ones, get together, find all the major wealth in the world and then tax capital progressively.