If you follow current events at all, you have certainly heard the buzz about French economist Thomas Piketty and his book Capital in the Twenty-First Century. Briefly stated, the main premise of the book is this: Classical economists back to Adam Smith wrote that there was a problem with capitalism: With unregulated capitalism, wealth tends to flow upward and creates expanding inequality, and action is required by governments to prevent this inequality from becoming destructive to society. Marriner Eccles demonstrated that the Great Depression was caused by this inequality.
This classical theory lost favor for several decades because of the work of Nobel prize-winning economist Simon Kuznets. From his vantage point in the 1950’s and 1960’s, the data demonstrated that income and wealth inequality had decreased over the previous decades, and he developed the theory that the spread of knowledge and technical skills to the greater population was creating a “virtuous cycle” that would automatically suppress the forces that created economic inequality.
With the benefit of another half-century of hindsight, and based on over a decade of extensive research into economic data from Europe back to the early 1700’s, Piketty has shown that the trends observed by Kuznets were only temporary, that they were the result of the huge destruction of capital during the global disruptions of the 1914-1945 era rather than some “virtuous cycle”, and after reconstruction was complete by the late 1970’s, the forces that drive inequality that the classical economists warned us about have returned. Piketty claims we could be headed back to the same levels of economic inequality that existed before 1914 unless course changes are made.
So why the title of this blog? The main message of the Book of Mormon is its testimony of Christ. Outside of that most important doctrinal role, a main theme is that unless we are vigilant, government will be taken over by the wealthy and the powerful, those who grind on the poor and worship “gold, silver, silks and fine-twined linens” – and when that happens, we are headed for a crash. Is there any argument that what happened in America in 1929 and 2008 was simply a repetition of the Book of Mormon pride cycle?
And I believe Thomas Piketty is the 21st Century’s Marriner Eccles, a prophetic voice, if I may use that term, warning us to change course to avoid economic destruction. The question is: Where is the 21st Century’s Franklin Delano Roosevelt, who can lead us away from the destructive path we are on? And why are the Latter-day Saints, comfortable in their current state of “all is well in Zion” so blind to the danger?