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On Our Troubled Times
Thomas Piketty
Penguin Viking


From Preface

This book brings together many of my published monthly newspaper columns, with no subsequent updating or revi­sion. Some of these pieces have aged a bit, others less so. Taken together, they represent one social scientist's effort to under­stand and analyze the day-to-day world, to get involved in the public debate; an attempt to reconcile the rigors and responsibilities of scholarship with those of citizenship.

The years during which these columns were written were deeply marked by the world financial crisis that began in 2007—8 and is still ongoing. On several occasions, I tried to understand the new role of central banks as they sought to avert a collapse of the world economy, or to analyze the simi­larities and differences between the Irish and Greek crises. Not to mention traditional domestic topics, still vital for our common future. But toward the end of the period, one ques­tion began to eclipse all the others: Will the European Union be able to live up to the hopes that so many of us have placed in it? Will Europe manage to become the continental power, and the space for democratic sovereignty, that we'll need in order to take control of a globalized capitalism gone mad? Or will it once again be no more than a technocratic instrument of deregulation, intensified competition, and the subjection of governments to the markets?

At first glance, the financial crisis that began in the sum­mer of 2007 with the collapse of the U.S. subprime mortgage market and the September 2008 bankruptcy of Lehman Brothers can be seen as the first crisis of twenty-first-century globalized patrimonial capitalism.

Let's review. Starting in the 1980s, a new wave of financial deregulation and an outsized faith in self-regulating markets descended on the world. The memory of the Great Depres­sion of the 1930s and the cataclysms that followed had faded. The 'stagflation' of the 1970s (a mixture of economic stagna­tion and inflation) had showed the limits of the Keynesian consensus of the 1950s and '60s, hastily constructed in the specific context of the postwar decades* Naturally, with postwar reconstruction and high growth rates coming to an end, the continual growth of taxes and expansion of govern­ment that characterized the 1950s and '60s could no longer be taken for granted.f The deregulation movement began in 1979—80 in the United States and United Kingdom, where there was rising unease as the economies of Japan, Ger­many, and France caught up with - and, in the British case, surpassed — their own. Riding the wave of discontent, Ron­ald Reagan and Margaret Thatcher explained that government was the problem, not the solution. They called for escaping a welfare state that had made entrepreneurs soft, a return to the pure capitalism of the pre-World War I era. The process accelerated and then spread to continental Europe after 1990— 91. The fall of the Soviet Union left capitalism without a rival, and a new era began in which many chose to believe in an 'end of history' and a 'new economy' based on permanent stock market euphoria.