On „Fatal Conceit” or the pretence of knowledge in Thomas Piketty’s Capital in the 21st Century

Abstract

The authors provide a critical review of the main argument presented in the book “Capital in the 21st Century” by Thomas Piketty stating that modern economies need to build a legitimate and efficient public power in order to fight inequality and poverty. In this article, we attempt to prove that this book ignores a set of significant developments brought to the economic theory such as the contributions of the Austrian School (Mises and Hayek) and the School of Public Choice (Kenneth Arrow, James Buchanan, Gordon Tullock). Therefore, there is a huge difference between treating people equally and struggling to make them equal. State constructivism based on single models that are imposed as a general rule is another form of state servitude and at the same time the state’s fatal conceit (Hayek, 2016b). It claims, in the name of false science, that it can say what is the general interest and how we may efficiently act to attain it. Also, the state is not a cold calculating machine but is made of people facing the same temptations and mistakes as common people, more exactly, it is neither almighty nor benevolent. Then why would we need more involvement from the state?