Red-hot political economist Thomas Piketty on inequality in the 21st century. And Economist Gregory Mankiw responds.

This undated photo provided by Harvard Press shows French economist Thomas Piketty. In his new book, Piketty, who helped popularize the notion of a privileged 1 percent, sounds a grim warning: The U.S. economy is beginning to decay into the aristocratic Europe of the 19th century. (AP)

Capitalism had a pretty great story in the twentieth century. The giant inequalities of the past receded. Wages rose. Democracy triumphed. And economists told us, by in large, this is what capitalism does. Now comes a new voice with a roaring bestseller, a ton of new data, and a very different story. Economist Thomas Piketty is the hottest thinker on the planet right now. And his message is that the twentieth century was an outlier. That capitalism is now pulling us back to inherited wealth and punishing inequality. If he’s right, what do we do? This hour On Point: Thomas Piketty, and "Capital in the Twenty-First Century."

-- Tom Ashbrook

Guests

Thomas Piketty, author of the new book, "Capital in the Twenty-First Century." Director of studies at the École des hautes études en sciences sociales. Associate chair at the Paris School of Economics.

N. Gregory Mankiw, economics professor and chairman of the economics department at Harvard University. Former chairman of the Council of Economic Advisers under President George W. Bush. Author of "Principles of Economics." (@gregmankiwblog)

From Tom's Reading List

New York Review of Books: Why We’re in a New Gilded Age — "Still, today’s economic elite is very different from that of the nineteenth century, isn’t it? Back then, great wealth tended to be inherited; aren’t today’s economic elite people who earned their position? Well, Piketty tells us that this isn’t as true as you think, and that in any case this state of affairs may prove no more durable than the middle-class society that flourished for a generation after World War II."

Greg Mankiw's Blog: First Thoughts on Piketty — "The bottom line: You can appreciate his economic history without buying into his forecast. And even if you are convinced by his forecast, you don't have to buy into his normative conclusions."

The Economist: Le French touch — "The French seem almost bemused by the sudden international fame of their home-grown economist. 'Thomas Piketty, une star américaine,' ran the headline of an article in La Tribune, a business newspaper. Le Monde ran a story pointing out that Mr Piketty was referred to 'only five times' as French in a piece in the New Yorker, as if this were proof of his being taken seriously."