Who is Thomas Piketty? The world's first - and perhaps only - 'rock star' economist, Thomas Piketty has had something of a meteoric rise. Coming from a distinguished academic background, in April, Piketty transcended economic circles, emerging as one of the cultural figures of the year. The reason: Capital in the Twenty-First Century, his 700-page bestseller examining wealth inequality.

It might not sound like the stuff of superstar adulation, but since its translation into English, the 43-year-old has attracted extraordinary levels of attention, and has accepted invitations to address the White House Council of Economic Advisors and give lectures at the United Nations, the International Monetary Fund and the London School of Economics (LSE).

And a German version of Piketty's book has just been published - further evidence of the world's fascination with the author and his views on the distribution of wealth.

What is his book all about? Its central idea is that wealth in our societies is becoming less equally distributed and, over time, the wealthiest are seeing their share increase.

As a thesis, this is nothing new. Growing income inequality has been discussed in countries such as the UK and the US for years, thanks to big increases in rewards for top executives, while average earnings have stagnated in real terms. Piketty's book, however, sets out to look beyond earnings, as it examines how and why inequality rises and falls.
"Making a wealth tax work would be extraordinarily difficult""What my book is trying to do is shift attention from income to wealth," Piketty told his audience at the LSE. "But of course both are important ... To some extent, wealth inequality flows from income inequality."

Piketty and his academic collaborators have assembled a huge database plotting how capital - private financial and property assets net of borrowing - has been distributed across more than 20 countries over periods of up to two centuries. This unique data-gathering exercise has allowed Piketty to claim that he is replacing economic theorising on inequality with verifiable data.

What has he concluded? Some of his conclusions are startling. In particular, he says wealth inequality in some developed economies is returning to levels last seen at the start of World War One, when a very small number of people held a huge share of the capital.

Piketty's argument revolves around rates of economic growth. At the heart of his book is the formula he advances to explain the fundamental process by which wealth inequality rises or falls. This formula, 'r-g' (where 'r' is the after-tax rate of return on capital and 'g' is the rate of economic growth), suggests that where the return on capital is higher than the overall rate of growth in an economy, the wealthy will tend to see their share of the capital increase. The more capital they hold, the faster their share will grow.

For countries experiencing prolonged periods of very slow economic growth, the effect could become marked, because wealth built up by individuals in the past will continue to grow faster than the economy, thereby entrenching inequality.

What is he proposing? Piketty's main suggestion for distributing income more equally is a global tax on wealth. He believes this will prevent the current trend growing to potentially dangerous levels. 

The economist's prescription has been met with a heavy dose of cynicism from some commentators. Paul Johnson, Director of the Institute of Fiscal Studies, holds out little hope of a successful worldwide attempt to tax wealth. "A wealth tax would be some percentage of the worldwide totality of an individual's assets," he says. "Making it work would be extraordinarily difficult. You would need to get every country in the world to sign up to it and that's not going to happen."

So does it follow that nothing can be done? Not necessarily, says Johnson. "We don't do very much in the way of wealth tax in the UK. The only one of any substance is inheritance tax, which is pretty ineffective at getting at that top half per cent," he says. "I don't think we've looked very seriously in the UK at how we might make inheritance tax work better."

Could any of his suggestions work? Even Piketty has acknowledged that a global wealth tax has little hope of being implemented. But Professor Alan Manning of the LSE, who has published extensively on inequality, argues Piketty's other suggestions are more feasible - notably better information on who the holders of capital are and what they own. Given that a big part of the problem in mapping the distribution of capital is, as Johnson says, that "the data isn't marvellous", Manning may have a point.

"We need more democratic transparency," Piketty told the LSE, "and we need adequate democratic and fiscal institutions so that we know better how this is evolving over time, and we can adapt our policies and, in particular, our tax rates in order to democratise wealth and have more diffusion of wealth.

"The point is not to reduce the wealth-to-income ratio per se, but rather to try to make sure that the share going to the middle class and lower groups in society rises rather than shrinks."

What has been the reaction to his book? The book has been divisive, to say the least. It has provoked strident criticism, particularly from right-wing commentators in the US. Piketty, in their view, is an enemy of capitalism. 

Critics have found fault with the title's allusion, claiming Piketty sought to 'revive' Marx - despite the author stating he has no time for the German philosopher.

Capital in the Twenty-First Century has also been derided as the most unread book of the summer.

On a more learned note, Manning cautions that the economic milieu is "a bit more complicated" than the one Piketty draws. Piketty's formula, 'r-g', is perhaps not wholly comprehensive; other factors, such as savings rate and how far fortunes are broken up on death, all play their part in affecting intergenerational wealth inequality. 

For the most part, though, Piketty's work has attracted largely positive comments from the world's top economists. 

Capital in the Twenty-First Century's real value, says Manning, is to show that free-market systems do not necessarily produce stable outcomes and can in fact enable inequality to grow over time rather than decrease. Piketty's attempt to capture the way in which wealth inequality grows seems to have won acceptance among economists, who have praised his impressive data set as the means by which he consolidates his controversial thesis.

The original version of this article was published in the September 2014 print edition of the Review.