Dear Mr. Denning,
Thank you for your interesting review of What Thomas Piketty Got Wrong. This comment is a continuation of my comment "I guess that the attention Piketty is receiving will lead to the new economics," posted under your article Is The Creative Economy Also In Trouble? We should hope that such attention continue.
At the beginning of the month he and 14 others wrote the article Our manifesto for Europe, which was published on The Guardian. That manifesto says that "The central issue is simple: democracy and the public authorities must be enabled to regain control of and effectively regulate 21st century globalised financial capitalism." However, I believe they are jumping to conclusions with three proposals that need to be reconsidered based on what follows.
I guess the most important issue with his book refers to the future, as you have been pointing out both in the article and in the comments. This starts with the same error of Ricardo's extrapolation, under the assumption that the future is a continuation of the past. That assumption is integral to the restriction of his macroeconomics tools. But today, it is possible to learn from the emergent future. In addition, such learning is leading increasing returns based on positive feedback.
While positive feedback is behind virtuous circle growth, it is also behind vicious circles induced by good (mediocre) management, as Jim Collins (and his research team) empiric evidence suggest in the book Good to Great. See chapter 8, "The flywheel and the doom loop." Only 11 out of 1,435 companies selected from the Fortune 500, from 1965 to 1995, made the leap from good to great. On the back of the book there is a quote by Peter Drucker that says:
This carefully researched and well written book disproves most of the current management hype – from the cult of the superhuman CEO to the cult of IT to the acquisitions and merger mania. It will not enable mediocrity to become competence. But it should enable competence to become excellence.Like Eamonn Kelly in his book Powerful Times, I believe that "the stakes are too high: our era is too complex, its challenges too significant, its promises too great, and its velocity to fast for us to simply react. Rather, we must amplify the power of our brains, individually and collectively, to match our new circumstances." A bit later he adds "the lucky news is that we have never, as a planet, been more equipped to make sense out of utter complexity..."
While Piketty is concentrated in learning from the past on the financial system, I have been concentrated on the electricity system to help learn from the emerging future. The difference is that instead of growing inequality, we should expect most countries to become egalitarian. Please take a look at the first paragraph of the summary of the paper A complete and fully functional electricity restructuring proposal, where I suggest that we should enter a different civilization that has been emerging as predicted by Alvin Toffler in his book The Third Wave:
Adequate electricity system restructuring is a key subsystem component of the adequate global society system restructuring needed to enter the Golden Age of the first technological revolution of what this author conjecture is a systemic civilization. From a heuristic system architecting perspective that Golden Age will be the result of the design of the value creation generated by the highly complex socio economic system that none of the subsystems by themselves is able to provide. Such value is the result of the relationships among global society subsystems.