Piketty's '2nd Law of Capitalism': Fundamental?

Thomas Piketty’s recent book Capital in the Twenty-First Century is a timely and important contribution that turns our attention to striking long-run trends in economic inequality. A large part of the book is thus a documentation of historical data, going further back in time, and focusing more on the very richest in society, than have most existing economic studies. This work is bound to remain influential. A central theme in the book, however, goes beyond mere documentation: as the title of the book suggests, it makes predictions about the future. Here, Piketty argues forcefully that future declines in economic growth—stemming from slowdowns in technology or drops in population growth—will likely lead to dramatic concentrations of economic and political power through the accumulation of capital (or wealth) by the very richest. These predictions are the subject of the present note.