Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business

Chris Ducker 

Entrepreneurs often suffer from ”superhero syndrome”—the misconception that to be successful, they must do everything themselves. Not only are they the boss, but also the salesperson, HR manager, copywriter, operations manager, online marketing guru, and so much more. It’s no wonder why so many people give up the dream of starting a business—it’s just too much for one person to handle.

But outsourcing expert and ”Virtual CEO,” Chris Ducker knows how you can get the help you need with resources you can afford. Small business owners, consultants, and online entrepreneurs don’t have to go it alone when they discover the power of building teams of virtual employees to help run, support, and grow their businesses.

Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business is the step-by-step guide every entrepreneur needs to build his or her business with the asset of working with virtual employees. Focusing on business growth, Ducker explains every detail you need to grasp, from figuring out which jobs you should outsource to finding, hiring, training, motivating, and managing virtual assistants.

With additional tactics and online resources, Virtual Freedom is the ultimate resource of the knowledge and tools necessary for building your dream business with the help of virtual staff. Shop Amazon - Audible Books that Inspired a Feature Film

Author -

Chris C. Ducker has helped thousands of entrepreneurs around the world implement successful virtual staffing strategies into their businesses, releasing them from the shackles of the over-worked, over-stressed lifestyle that most business owners endure on a daily basis. His approach to leveraging time, as well as maximizing business systems and processes – all with a focus on running businesses from a distance – has earned him the title of the “Virtual CEO.”

Ducker is also a popular speaker, podcaster, and video marketer.

BLOG: www.chrisducker.com
BOOK: www.virtualfreedombook.com

Known as the 'Virtual CEO' and regarded as the number one authority on the subject of virtual staffing and personal outsourcing, Chris Ducker is a serial entrepreneur who owns and operates three businesses in the Philippines, amounting to almost 300 employees - including a call center, a recruitment consultancy and a co-working space to support local startup entrepreneurs.

An advocate of virtual team building and as a result, smarter, faster business growth, Chris is also a popular international keynote speaker, business blogger and podcaster.

SAMPLE CUSTOMER REVIEWS –

1) If you own a business you NEED to read this book (even if you think it doesn't apply) - This book is THE authoritative guide to finding and managing a virtual staff. If you have never done it before Chris Ducker will walk you through step by step - it is easier than you think! If you are like I was for so long and putting off the idea of building a virtual team let this be your wake up call.

What makes this book extra special is not only is it a good guide for someone starting out, but even for those who have been managing some or all of their team online Virtual Freedom will show you how to take that to the next level. There were several tips I picked up even after several months of working with a virtual assistant.

The format of this book is super simple to read with bullet points and headings. And examples! Every section has an example of someone putting the strategies into practice.

Even without a virtual team on a full time or regular basis this book will help you hire and manage for one off projects, and even improve your own productivity.

The biggest surprise in the book was the final section about content creation. Not too concerned about giving yourself more free time? Then you should still hire a virtual staff so that you can have more time to create content and continue to grow. Your impact and meaning as a business should never be limited by what you alone can do.

Bottom line? Go buy this book! It will change your life.

By Rivka Kawano on March 16, 2014

2) I'm Getting So Much More Done! - In full disclosure, Chris and I are extremely good friends. Best friends in fact. But, he also knows that I'm always completely honest with him about what he's doing, and he's always been the same with me. Friendship aside, this review completely reflects the information in this book, which is spot on. I've suffered from Superhero Syndrome for the longest time, and after meeting Chris a few years back and being introduced to virtual staff, it has completely changed how I've been able to get things done. I'm getting more done, in less time, and although my team has allowed me to spend more time doing the bigger thinking in my business, which is what all entrepreneurs should be doing (not the repetitive day-to-day stuff that can be handed off, which is what I was doing myself), but I've been able to spend more time with my kids at home while also watching my business grow. I've been able to focus on only what I need to focus on, and having my business work for me, instead of me working for my business.

I've read the book and everything I learned from Chris these past few years is in here, plus a lot more. I highly recommend it. Thanks Chris for being a great friend, but for also helping others see the power in letting go of certain parts of your business - something, like I said, I struggled with for the longest time.

By Pat Flynn on March 19, 2014

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Click –Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business

The Rosie Effect: A Novel

The highly anticipated sequel to the New York Times bestselling novel The Rosie Project, starring the same extraordinary couple now living in New York and unexpectedly expecting their first child. Get ready to fall in love all over again.

Don Tillman and Rosie Jarman are back. The Wife Project is complete, and Don and Rosie are happily married and living in New York. But they’re about to face a new challenge because— surprise!—Rosie is pregnant. 

Don sets about learning the protocols of becoming a father, but his unusual research style gets him into trouble with the law. Fortunately his best friend Gene is on hand to offer advice: he’s left Claudia and moved in with Don and Rosie. 

As Don tries to schedule time for pregnancy research, getting Gene and Claudia to reconcile, servicing the industrial refrigeration unit that occupies half his apartment, helping Dave the Baseball Fan save his business, and staying on the right side of Lydia the social worker, he almost misses the biggest problem of all: he might lose Rosie when she needs him the most. 

Graeme Simsion first introduced these unforgettable characters in The Rosie Project, which NPR called “sparkling entertainment along the lines of Where’d You Go Bernadette and When Harry Met Sally.” The San Francisco Chronicle said, “sometimes you just need a smart love story that will make anyone, man or woman, laugh out loud.” If you were swept away by the book that’s captivated a million readers worldwide, you will love The Rosie Effect.


Author -

Graeme Simsion is a former IT consultant and the author of two nonfiction books on database design who decided, at the age of fifty, to turn his hand to fiction. His first novel, The Rosie Project, was published in 2013 and translation rights have been sold in over thirty-five languages. Graeme lives in Australia with his wife, Anne, and their two children.

SAMPLE CUSTOMER REVIEWS –

1) DIFFERENT THAN THE FIRST? "CORRECT." ANY LESS WONDERFUL? "INCORRECT," AS DON WOULD SAY. - Having worked with a number of students and adults with Asperger's Syndrome, I fell completely in love with THE ROSIE PROJECT and its perfect representation of the logos, ethos, and beautiful pathos of Professor Don Tillman. This sequel, aptly named THE ROSIE EFFECT, is a very different story, but no less interesting to tell or rewarding to read.

Rosie and Don are living in NYC, where Rosie is elbows deep in the challenge of a joint MD-PhD program at Columbia University, where Don is a visiting professor and researcher. Once again written in first-person limited point of view, we only know Don's side of the story, and what a story it is! His shenanigans are as complex and convoluted as we came to expect in THE ROSIE PROJECT, and author Graeme Simsion once again displays his brilliance at weaving crazily-cascaded series' of events as only Don Tillman could possibly create them. Don's true troubles begin when Rosie announces that she's pregnant. It's been hard enough for Don to adjust to his role as husband and defender, particularly when Rosie expects him to face down neighbors with whom she argues, and Don is struggling to handle multiple issues and avoid a personality "meltdown"...his greatest fear, which rears its head when he is at the end of his ability to cope. Whatever Rosie's expectations were (when she announced her pregnancy to Don) we never actually learn, since she does not articulate them. We watch as poor Don falls down the rabbit hole, trying to understand why Rosie is becoming more and more aloof. Their communication breaks down so miserably that there is more lie than truth, and eventually they retire to separate bedrooms. Don engages the help of a ragtag band of brothers--his three male friends (he's making progress!)--in his efforts to win Rosie back, and the hijinks ensue.

What makes THE ROSIE EFFECT so different from its predecessor? First of all, it cannot have the charm of a boy-meets-girl story, because it is not one. Surely we can all agree that a married relationship is an entirely different type of story to tell...so this book is quite different from the first. A new, married status, a new country, new jobs, new home (in fact, two)...and a pregnancy...imagine the strain on Don and Rosie's relationship, then add Don's Asperger's...and you can imagine the wild ride this story is. Sometimes hysterical, sometimes heartbreaking, other times frustrating and disappointing...but at all times, just like in the first book, Don is Don...every single line, every single moment of this story. That is the brilliance of Graeme Simsion...he writes a character so true, so himself, that he is Don Tillman in every word and action; never for a moment does Don do anything out of character, until he learns, analyzes, adapts, and chooses to act differently.

Like some reviewers, I must say that I am disappointed in Rosie's behavior in EFFECT. Rosie displays a new level of selfish here...admittedly getting pregnant by intention, without even discussing with Don. She displays a marked lack of interest in communicating with Don about the imminent change in expectation of him and their lifestyle, and basically is concerned only with her own needs. In PROJECT, Rosie was essentially self-absorbed, but we saw regular moments of concern for and appreciation of Don's many efforts, even sacrifices, for her. Though I wondered a few times in this story just what Don was getting out of his relationship with "the most beautiful woman in the world," I have so terribly much respect for Don that if he feels, as he tells us, that she is the thing he wants most in the world, then that's good enough for me.

PLEASE give us more, Graeme; we are not nearly done with Don Tillman. I can't wait to hear from him again. Do we want another sequel? CORRECT.

By The Literacy Advocate on December 30, 2014


2) The second Don and Rosie novel (4.5 stars) - Considering that I laughed all the way through The Rosie Project, it didn't surprise me that I started laughing on the first page of The Rosie Effect. Don Tillman, the narrator of the Rosie novels, is now a familiar character. In this case, familiarity breeds glee. This novel might not be quite as funny as the first, if only because the character of Don is less startling in this second encounter, but I still enjoyed it.

The Rosie Effect begins after Don and Rosie have been married for ten months. They are living in New York. Don is teaching at Columbia and Rosie is pursuing her doctorate. Don has managed to make new friends (he now has six), has abandoned the Standardized Meal System, and has agreed that sex should not occur on a fixed schedule. His otherwise orderly life is nevertheless unsettled by an unscheduled pregnancy that makes Rosie's emotions even more impossible for Don to predict.

The pregnancy also raises yet another problem that Don finds perplexing: Is Don fit to reproduce? Opinions are mixed. To address the issue, Don embarks on The Baby Project (i.e., he prepares for "baby production and maintenance"). His efforts are hampered by an interfering social worker who is offended by Don's lack of social skills. His life is further complicated by Gene, one of his six friends, a philandering psychology professor who comes to live with Don after his wife boots him out of the house.

As readers of The Rosie Project know, Don possesses the intellectual rigor of a dedicated scientist but has a shortage of empathy. Rosie has plenty of intellect but usually balances her left brain with her right. In pregnancy, however, Rosie is all about emotion despite her unwillingness to concede that the pregnancy might challenge her. Don's desire to understand Rosie's behavior in terms of its evolutionary origins and to offer "helpful" solutions is, like the rest of the novel, hilarious -- to the reader, but not to Rosie.

Much of Don's thinking makes perfect sense (to me, at least). For instance, having told Rosie that he loves her, why should he ever need to tell her again? After all, love is a "continuous state" and only a change in that state would produce relevant information that needs to be conveyed. The Rosie Effect has some insightful things to say about relationships (and some good advice for men), particularly relationships that might lead to reproduction.

While the novel makes a number of serious points about relationships and the value of truth versus deception, its most important lesson concerns the need to be true to oneself -- even if you are socially maladapted. I value The Rosie Effect and The Rosie Project for the lighthearted approach they use to make serious points, but I value them more for the consistent laughter they provoke. If I could, I would give The Rosie Effect 4 1/2 stars.

By TChris TOP 100 REVIEWER on December 31, 2014

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Click –The Rosie Effect: A Novel

How Asia Works

Named by Bill Gates as one of his Top 5 Books of the Year
An Economist Best Book of the Year

In the 1980s and 1990s many in the West came to believe in the myth of an East-Asian economic miracle, with countries seen as not just development prodigies but as a unified bloc, culturally and economically similar, and inexorably on the rise. In How Asia Works, Joe Studwell distills extensive research into the economics of nine countries—Japan, South Korea, Taiwan, Indonesia, Malaysia, Thailand, the Philippines, Vietnam, and China—into an accessible, readable narrative that debunks Western misconceptions, shows what really happened in Asia and why, and for once makes clear why some countries have boomed while others have languished. Impressive in scope, How Asia Works is essential reading for anyone interested in a region that will shape the future of the world.

SAMPLE CUSTOMER REVIEWS –

1) Outstanding! - Author Studwell argues that there are three critical interventions that governments can use to speed up economic development. Used in Japan, South Korea, Taiwan, and now China, they have produced the quickest progressions from poverty to wealth that the world has seen.

The first and most overlooked is to maximize output from agriculture. The second is to direct investment and entrepreneurs towards manufacturing exports. Machines can easily be purchased on the world market, and successful east-Asian governments promoted technological upgrading through subsidies conditioned on export performance. (Exporters were almost invariably better businesses than firms that sold only at home.) The third is to focus capital on the fastest possible technology learning and the promise of high long-term profits, not short-term returns and individual consumption. This tends to pit the state against many businessmen and consumers with shorter-term horizons.

Thus, economic development is as simple as one, two, three. Unfortunately, wealthy nations and their economic institutions (the World Bank, the International Monetary Fund) have provided contradictory advice to poor states, despite the fact that no significant economy as ever developed successfully via free-trade and deregulation from the beginning - including the U.S. and Great Britain. Positive intervention has been required in agriculture and manufacturing that fostered early accumulation of capital and technological learning.

Brazil is the only major economy outside east Asia which has grown more than 7%/year for over 25 years. But it crumbled after the 1982 Latin American debt crisis - currency depreciation, inflation, and years of zero growth. Too much of Brazil's earlier growth came from debt that did not translate into a more productive and competitive economy.

Studwell excludes east Asia's failed states - North Korea, Laos, Cambodia, Myanmar, and New Guinea. Their one common characteristic is a failure to trade and interact with the world. He also ignores Asia's two main offshore financial centers - Hong Kong and Singapore because of their lack of an agricultural sector. Micro oil state Brunei and east Asia's gambling center, Macau, are also omitted.

Another key finding is that a large working-age population and proportion increase the possibilities for fast growth. Rapidly declining death rates, especially for children and a rapidly rising work-age population have been a big part of east Asian development success since WWII. Mao boosted population growth in China, telling people there was strength in numbers, while Deng Xiaoping and successors put a stop to that.

The evidence of a positive correlation between total years of education and GDP growth is much weaker than most imagine. The Philippines have the highest levels of tertiary-educated students in southeast Asia, but because more important policy choices were flunked, the country is on the verge of becoming a failed state. Cuba has the world's second-highest literacy rate for children over age 15, and the 6th highest rate of school enrollment. It has inadequate employment opportunities for university graduates, however - one reason 25,000 Cuban physicians take state-subsidized work overseas. Another problem with education - there is too much of the wrong kind - eg. liberal arts. Asian education not only creates a much higher proportion of engineers than most, it also includes a considerable vocational component conducted inside firms and not elite universities.

Political pluralism, rule of law, and democracy are also outside Studwell's scope - again, because the evidence is contradictory. He also ignores geography/climate - most believe colder climates are more conducive to economic success - Studwell, however, points out that the Arabic world's ascension in the early 8th century began in the hot areas of today's Iraq and north Africa, while the famous Tang dynasty operated out of the 'boiling hot Xian' area.

Studwell then goes on to detail the rationale for his thinking - its both interesting and invaluable reading.

By Loyd E. Eskildson HALL OF FAME on June 19, 2013

2) Industrial policy works - This book argues among other things that that protectionism and industry policy are important policy tools for countries at an early stage of development, and that Asian governments have adopted this model with varying degrees of success. Heretical as this claim may be to some, in my opinion it is not even worth debating whether or not the most advanced economies achieved success under "Smithian" conditions.With the possible exception of a few, small trading entrepots, there is not a single example of a country that did. There are rich countries that were "Smithian" (like, laissez-faire Haiti -- if you don't count slaves of course -- in the late 18th Century), but their wealth was unsustainable and they were in no way "advanced" economies.

You can find it all in the works of the brilliant Alexander Hamilton. The "American System" of the early 19th Century was the basis of the economic writings of the German Freidrich List and which went on to influence Germany, Japan (in 1872 one of the leading proponents of the American System, E. Pechine Smith, moved to Tokyo and became the leading adviser to the Mikado on Japan's economic restructuring), and a host of other countries. The three pillars of the American System were infant industry tariffs and subsidies, internal improvements (i.e. infrastructure provided by state and local governments) and a sound system of national finance, with the state playing a leading role.

These are the same pillars that supported the growth of every country that has developed rapidly, and the fact that this is even debated in economic circles suggests to me how unreal academic economics has become and how divorced from historical understanding. I agree with the authors that to debate whether or not industrial policy can work is silly. Of course it can. The real interesting question is to figure out under what conditions it is wealth enhancing and under what conditions it is wealth destroying. This is why the debate is so important for China. The Chinese growth model clearly "worked", I would argue, in the 1980s and 1990s, although in part simply because it involved a rejection of the insanely inefficient polices of the 1950s, 1960s and 1970s. Today, in my opinion, it clearly no longer "works". So why did it sometimes help and sometimes hinder Chinese development?

Unfortunately it is very hard to debate this question because most economists are either ideologically committed to the idea that it is almost always a bad idea (the consensus in economics) or to the idea that it is always the right approach (perhaps the consensus in political economy or economic history). The truth, however,may be that sometimes it works and sometimes it doesn't. Although I don't always agree with Joe Studwell's conclusions. this book does a great job of teasing out the important and relevant issues.

By Michael Pettis on July 11, 2013

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Capital in the Twenty-First Century

What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality.

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Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality―the tendency of returns on capital to exceed the rate of economic growth―today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again.

A work of extraordinary ambition, originality, and rigor, Capital in the Twenty-First Century reorients our understanding of economic history and confronts us with sobering lessons for today.

Author -

Thomas Piketty is Professor at the Paris School of Economics.

SAMPLE CUSTOMER REVIEWS – 

1) A truly unique work for this generation - EDIT: I would like to point out that it is ridiculous that literally all of the 1-star reviews (except for one that I counted) for this book are from people who did not purchase the book or even read it. It looks like there was some kind of invasion from April 22nd of right-wingers who were told this book is "communist" or something to make a 1-star vote just to bring down the rating of the book. Amazon should not allow this kind of manipulation, and should limit reviews only to those who are verified customers that purchased this book.

If I could give more than 5 stars I would. As a former Libertarian who realized the path quickly leads to oligarchy with such an ideology, Piketty's book is a wonderful reminder of just how wrong I was back then.

The empirical work he has done in assembling the income and wealth concentration for countries is simply invaluable. We have some data like gini and labor vs. capital income, but to meticulously collect and analyze specific percentiles of income and wealth in many nations is truly groundbreaking. No longer can people who deny the inequality we have in the United States. No longer can people deny that we are in a new gilded age. The regulatory capture in our wild west capitalism has led to outright corruption being "legalized", and the politicians merely keep deregulating, cutting taxes, cutting spending on public programs.

Piketty not only provides the important data, and the historical context and analysis, but makes some very clear policy prescriptions. Tax inheritances, get some sane corporate governance standards to stop the insane overpaying of executives, and strengthen public institutions that provide opportunity to the masses.

Remember, the r in r>g is AFTER TAX. We can reverse this if we change the incentives that allow the American oligarchs to use accounting shenanigans, tax havens, and lobbyists to rig rules in their favor.

I recommend this book to anyone who has irrational anti-government tendencies or liberals who still defend Obama and other corporatist Democrats. It is time for this generation to get radical and reform this disgraceful system.

By Aguadito on April 24, 2014

2) An important book (in both the English and French senses of the word) - This is a monumental work about inequality. Despite the title's allusion to Marx's classic (a point emphasized by the dust jacket design), it's neither a primarily theoretical nor a primarily polemical work, though it has elements of both theory and advocacy. Nor is its author (TP) a radical: he taught at MIT, and is thoroughly at home in the concepts and categories of mainstream neoclassical theory. Nonetheless, I think even many who hold less orthodox views about economics will find this book stimulating, valuable and sympathetic in many respects. And all readers ought to find it disturbing.

In the ultra-long comments below, I begin with the book's audience and style (§ 1); then turn to some of the book's main arguments, which are more nuanced than usually reported (§§ 2-6); then to some things that are unclear or missing (§§ 7-8); and I end with some comments about the book's production (§ 9) and some concluding remarks.

1. In the original French edition, TP says that he intended this book to be readable for persons without any particular technical knowledge. In principle, it could be read by a broad, college-educated audience. TP's prose is very clear and direct, with a low density of jargon and a high density of information. (I read the French edition, but Arthur Goldhammer's translation seems to preserve these qualities very well.) The discussion is enlivened by well-chosen references to literature and a sprinkling of sarcastic barbs, both of them techniques that French scholars have developed into art forms (if not as elegant as John Kenneth Galbraith's irony). The allusions here range from Balzac, Jane Austen and Orhan Pamuk to "The Aristocats," "Bones" and "Dirty Sexy Money;" and the sarcasm hits both university economists and The Economist (@636n20), among others.

But: this is a long and demanding book. It talks relatively little about current events or the policies of particular governments, unlike, say, Joseph Stiglitz's "The Price of Inequality" (2012). I wouldn't say Stiglitz's is an easy book, but it was written more with of a popular audience in mind (picking up 270+ Amazon reviews in less than 2 years). TP's presentation is far more methodical and meticulous than Stiglitz's. It helps for the reader to be interested in the fine points of data series and categories, and in the sources of uncertainty in data. Occasionally the discussion will focus on concepts from academic economics, such as Cobb-Douglas production functions, elasticities, and Pareto coefficients; while TP uses words rather than math on these occasions, he generally assumes you pretty much know what he's talking about. Finally, if, as I did, you make it through the whole thing while reading with some attention, I bet dollars to donuts you'll come out of the experience feeling very, very down, on account of TP's message. Actually, that mood will hit you long before the end. Despite its felicities of style, this is an arduous read.

2. The "capital" in the title includes not only farms, factories, equipment and other means of production, but also assets typically owned by individuals, such as real property, stocks and other financial instruments, gold, antiques, etc. -- what's sometimes called "wealth". TP excludes so-called "human capital," because it lacks some features of true capital (ability to be traded in a market, inclusion in national accounts as investment), unless it's in the form of slaves.

The distribution of capital is far more unequal than that of income. Even the Scandinavian countries have a Gini coefficient for capital of 0.58 -- comparable to that for income inequality in Angola and Haiti, among the 10 worst in the world (World Bank figures). For Europe and the US in 2010, the coefficient is at 0.67 and 0.73 respectively, worse than any country on the World Bank income inequality chart. (Of course, the worst countries on that World Bank list have hair-raising capital inequality, too.)

The book's main thesis is that economic growth alone isn't sufficient to overcome three "divergence mechanisms" or "forces" that are in many places returning inequality in income and/or capital to pre-World War I levels. The main mechanisms are:

(A) the historical tendency of capital to earn returns at a higher rate ('r') than the growth rate of national income ('g'), which typically sets a constraint on how workers' salaries grow, symbolized by the mathematical expression, "r > g".
(B) the relatively recent (post-1980) widening spread between salaries, not only between the wealthiest 10% or 1% and the mean, but even within the top 1%.
(C) an even newer inequality in financial returns, which correlates r with the initial size of an investment portfolio -- i.e., different r for different investors.

A point to keep in mind is that g relates to national income, not to GDP. National income = GDP - depreciation of capital + net revenue received from overseas. Among other benefits, this measure corrects for the reconstruction boosts in GDP after wars, hurricanes, earthquakes, etc., since the depreciation term takes the destruction of property into account. Also, an increase in national income usually has two different sources: part of it is truly economic, coming from productivity growth (output per worker), and part is due to population growth. Historically, it's the latter that has dominated.

3. The r > g argument has received the most attention. It's to be seen "as an historical reality dependent on a variety of mechanisms not as an absolute logical necessity" (@361). TP finds that this condition has held throughout most of the past 2,000 years. As long as it does, he says, it's the natural tendency of capitalism to make inequality worse -- and the bigger the difference (r - g), the worse that inequality will be. Many commentators about this book make it sound as if this is an obvious mechanism. But if you play with it on Excel, using reasonable values for r and g, it turns out to be slower and more sensitive to initial conditions than you might expect.

Here's a toy example: Let's suppose r = 4%, g = 1.5%, and that salaries rise as fast as g (a very idealistic assumption!); and let's assume these rates are net of taxes or that no taxes apply. I'll compare the situations of three people in Silicon Valley: X, an engineer who made $8.5 million by exercising stock options when the company she used to work for had an IPO; Y, the same company's former HR manager, who made $6.0 million from her options; and Z, a young lawyer at a local law firm, who has a $200,000 salary when we first meet her.

After a year, X has $340K in disposable income, Y has $240K, and Z gets a raise to $203K. Suppose X and Y spend all their income from their capital every year. Eventually, Z can earn more than each of them: it will take her about 37 years to exceed X's annual income, but only 13 years to make more than Y. Now suppose X and Y each save the equivalent of 1.5% of their capital. Then Z will never overtake either one in gross annual revenue, but the situation as to disposable cash is a bit different. After saving, X will always have more cash to play with than Z, but it will take more than 15 years for her to have just 50% more than Z does. As for Y, she'll actually start out with less annual cash than Z, and it will take her 13 or 14 years just to catch up -- even though she's a multi-millionaire.

The true potency of the r > g mechanism comes from its working in conjunction with other circumstances. For example, according to TP's historical data, I've been way too conservative in my assumptions about X's and Y's advantages over Z.

From the 18th through the early 20th Centuries, the people who earned money from capital had proportionally a lot more than they do today: e.g., in 1910, the wealthiest 1% in Europe held > 60% of all European wealth, about triple the share they hold today (see Fig. 10.6). The US was not so extreme, but still very unequal: From 1810 to 1910, the share of the top 1% grew from 25% of American wealth to 45.1% (Fig. 10.5), compared to 33.8% today. So to set our example 100-200 years ago, the endowments of X and Y could plausibly be much bigger relative to Z's wages (especially if we chose, say, Wilhelmine Germany instead of Silicon Valley).

More recently, since the 1980s, most folks with a lot of capital also earn salaries -- and having a lot of capital tends to be correlated with having a salary well above average. So in a more realistic modern example, we should consider that X and Y have moved on to new companies where they receive hefty salaries, which would give each in total a healthy and growing excess of annual spendable cash versus Z. This is the realm of the second divergence mechanism, which is especially formidable in America. In 2010 the richest 1% not only held more than 33% of American wealth, but they earned between 17x and 20x the mean American income (depending on whether capital gains are included). Even the wealthiest 0.1% of Americans work, for average incomes roughly 75x the mean (or 95x, if capital gains are included) (see Table S8.2). At the other end of the spectrum, I was shocked to learn that the purchasing power of the US Federal minimum wage peaked in *1969* -- what was $1.60 an hour back then would be worth $10.10 in 2013 dollars. In those same dollars, the current statutory minimum hourly wage is $7.25 or a bit less (see Fig. 9.1 and nearby text).

On top of these trends, succession to family wealth is becoming important again today, even if not to the full degree it was in 19th Century novels. TP frames this in terms of the dialogue of the worldly Vautrin and the young, ambitious Rastignac in Balzac's "Père Goriot" (1853). Rastignac aspires to wealth by studying law. Vautrin counsels him that unless he can claw his way to become one of the five richest lawyers in Paris, his path will be easier if he simply marries an heiress in lieu of study. Cut to the present: judging by TP's Fig. 11.10, law school might have been the better choice for Baby Boomers, but if you're a Rastignac in your 20s or 30s when you read this, consider marrying up. Maybe you think you'd rather found the next Facebook or Google -- but why work so hard, and against such long odds? TP shows that when Steve Jobs died in 2011, his $8 billion fortune was only 1/3rd that of French heiress Liliane Bettencourt, who has never worked a day in her life.

4. There's another way that "r > g" is inadequate as a summary of TP's argument: TP calculates that during the past century (1913-2012), we've seen r < g, the opposite of its usual polarity (Chapter 10).

High rates of growth -- or at least, what we're accustomed to thinking of as high rates of growth, 3%-4% or more -- aren't a sufficient explanation. In fact, such rates of growth aren't sustainable in the long term, and were not sustained in most countries; they're mainly a catch-up mechanism lasting a few decades, according to TP. During the period from 1970-2010, the actual per capita growth rate of national income averaged about 1.8% for the US and Germany, 1.9% for the UK, and 1.6%-1.7% for France, Italy, Canada and Australia. The wealthy country with the highest per capita rate was Japan, at 2.0 (Table 5.1). (Think about that, next time you're tempted to swallow what Paul Krugman and other pundits pronounce.) Nonetheless, growth rates in this range appear to be what TP calls "weak" (e.g., @23).

Rather, the main reasons for the flip are the tremendous destruction of capital in Europe due to the two world wars, and the imposition of very substantial taxes on capital, at an average rate of about 30% in recent years. These greatly reduced r.

Despite these trends, inequality has been getting worse during the past few decades. This isn't a paradox, but rather the impact of the other divergence mechanisms, especially the rise of the "working rich" and the spread of inequality in salaries. So we should be quite alarmed by TP's assertion that we'll flip back to r > g during the 21st Century. His explanations for this seem rather more speculative than most of the rest of the book, though it's clear he expects g to remain low. I return to this a bit more in § 7 below.

In any case, it's clear that r > g isn't a necessary condition for inequality to get worse.

5. TP reserves his most anxious prose ("radical divergence," "explosive trajectories and uncontrolled inegalitarian spirals") for the third mechanism, inequality in returns from capital (@431, 439). Those with a great deal of capital are able to earn higher returns on it -- such as 6%-7%, or even 10%-11% in the case of billionaires like Bill Gates and Bettencourt -- compared to those with only a few hundred thousand or millions of dollars, who may earn closer to 2%-4%. This results from two types of economies of scale: the ultra-rich can afford more intermediaries and advisers, and they can afford to take on more risk.

Unfortunately, public records don't provide adequate information on this point, and while TP does look at Forbes's and other magazines' lists of the wealthy, those present many methodological issues. So TP corroborates his findings by looking at the more than 800 US universities who report about their endowments. Most spend less than 1%, or even less than 0.5%, of their endowments on annual management fees. Harvard University spent around $100 million annually (ca. 0.3%) on management of its $30 billion endowment, and earned net returns of 10.2% annually during 1980-2010 (not counting an additional 2% annual growth from new gifts). Yale and Princeton, each with a $20 billion endowment, earned a similar rate. A majority of universities have endowments of less than $100 million, and so obviously can't fork over $100 million to managers; they earned average returns of 6.2% during that period (still better on average than you or me).

TP of course doesn't worry that universities will own most of the world, nor does he find it plausible that sovereign funds from Asia or oil-producing countries will either. The bigger danger, he contends, is private oligarchs, and he believes this process is already underway. Since the officially documented ownership of global assets comes up slightly negative, TP calculates that either the rich are already hiding the equivalent of at least 8% of global GDP in tax havens, or else that our planet is owned by Mars (@465-466).

6. In Part IV of the book, TP considers policy approaches to deal with the three forces of divergence. In short, the answer for all three is a progressive, annual global tax on capital, to be set at an internationally agreed rate and its proceeds apportioned among countries according to a negotiated schedule (@515). This will also need a global real-time reporting system for transactions in capital assets. Many will attack these ideas, but it seems that TP's main intention is to get a serious conversation going. His admits his approach is utopian, but maintains that utopian ideas are useful as points of reference.

What interested me most was that TP doesn't see pumping up g as a viable approach to preventing r > g from returning. For one thing, demographics create some limitations in how far g can be pushed, especially in countries whose populations will soon be declining (or Japan, where that's happening already). For another, the same forces that pump up g can also increase r, at least in theory, so (r - g) wouldn't necessarily change much. The more practical answer then, is to bring down r.

In his final chapter TP turns to the very topical question of public debt, which he sees as an issue of wealth distribution and not of absolute wealth. He reminds us about two of its important aspects: One is that public debt takes money from the pockets of the mass of citizens, who pay taxes, and puts it in the pockets of the smaller group of people who are wealthy enough to make loans to the state. The other point is that nations are rich -- it's only states who are strapped for funds. He calculates that in many countries, a one-time progressive capital tax of up to 20% on property portfolios worth more than 1 million Euro could bring the national debt to zero, or nearly so.

Actually, TP doesn't believe that such a drastic reduction in debt levels is urgent, any more than he believes that such a gigantic tax is politically feasible. But his observation puts the lie to the notion that one must raise consumption taxes or income taxes (or, for that matter, experience economic growth) to reduce debt levels.

7. There were a couple of rare instances where I didn't feel the text was sufficiently clear. TP very graciously replied to my emailed inquiries about these matters, but without that input, I'd have remained quite confused by them.

(a) The first arose in Chapter 1, where α (alpha) is defined as designating the "share of income from capital in national income." According to the perhaps intemperately named "first law of capitalism," α = rβ, where β is the ratio of the stock of capital to the flow of national income (and r is as above, the rate of return on capital).

But an important category of income from capital is capital gains, the profits you make when you buy assets cheap and sell them dear. Unrealized capital gains make up a substantial part of the fortunes of Bill Gates, Steve Jobs and other billionaires mentioned in the book. And capital gains are *not* included in national income, according to the algorithm for computing that quantity. (Nor are they included in GDP.) This makes the use of the preposition "in" confusing -- does it mean that capital gains aren't considered as income from capital?

This issue seems to have its root in academic economics, where α appears as a parameter in the neoclassical growth model developed by Robert Solow. The model represents an economy that produces one type of good -- i.e., it's all about making and selling stuff that gets consumed, so capital gains aren't considered. (In a sense, this model supplies a lot of the motivation for Part II of the book: the academic debate over the relative shares of capital and labor in the national income, i.e., the size of α and whether it changes with time, is a long and at times contentious one. But you can still benefit from reading Part II without knowing that.)

The answer I got from TP is that because capital gains don't seem to be very important in the long term (>100 years), netting out to roughly zero over such periods, he didn't consider them when discussing α. The subject of capital gains does come up later in other contexts, though, and TP does consider them important in the short-term (which in some contexts can mean a timescale of several decades).

(b) The second issue relates to TP's prediction that our current condition of r < g will flip back to r > g later this century. TP mentions that for the past 100 years, wartime destruction and, later, an average 30% tax rate on capital have brought r below g, despite currently weak growth rates in many countries. The data in the book, though is rather opaque about the relative contributions of these factors. Also, the book's clearest explanation of why matters might reverse rests on the possibility that countries will compete to attract capital by a race to the bottom in capital tax rates, allowing r to edge back up. This sounded rather too speculative to warrant such definite conviction about the return of r > g.

I checked the online material, and found the Excel file (not the pdf file) of supplementary Table S10.3, which mentions some of TP's assumptions. Among other things, this makes it clear that TP factors in destruction of capital from WWII in calculating r even for the most recent 50 years. It seems plausible that this will be less important going forward, so that even a 30% average tax rate on capital might not be sufficient in and of itself to prevent r from popping above g again ... maybe. I'm still not entirely convinced that TP's argument about the future of r is among the strongest in the book; but I'd be even less so if I hadn't consulted the online information.

8. No book can talk about everything pertinent to its theme, so it's all too easy to think of things one wishes had been included. Still, I was disappointed that the book was conventional both in its thinking about economic growth, and in its thinking less about growth's environmental consequences.

TP tells us that part of "the reality of growth" is that "the material conditions of life have clearly improved dramatically since the Industrial Revolution" (@89). Its main benefits include its roles as a social equalizer, and as a "diversifi[er] of lifestyles" (@ 83, 90). "[A] society that grows at 1 percent a year ... is a society that undergoes deep and permanent change" (@96).

Growth's equalizing effect, though, comes largely from population-based growth, whereas "a stagnant, or worse, decreasing population increases the influence of capital in previous generations" (@84). So is a country already in that condition, such as Japan, supposed to open its doors to immigrants? As an immigrant to Japan myself, I can appreciate that there are many social, cultural and political reasons why this could be a bad path both for country and for many of the immigrants as well. How about focusing on productivity-led growth instead? Maybe, because "in a society where output per capita grows tenfold in a generation, it is better to count on what one can earn and save from one's own labor" (@84), instead of relying on an inheritance. The problem is, this takes for granted that gains from productivity improvements will be shared with labor, rather than shareholders. Yet Part II shows that labor's share has been flat or declining. In Japan, productivity improvements nowadays tend to come from using temporary employees instead of higher-paid permanent ones, and from using robots in lieu of employees at all. These have worked out to be more methods for enhancing inequality, than for abating it.

Both population growth and productivity growth have other costs, too. The rapid growth of output TP alludes to could only be of the transitory, catch-up sort, such as China has been experiencing since the 1980s. The environmental consequences of that haven't exactly been benign. Nor does the book give any consideration to the environmental consequences of population growth, when the population in question aspires to a wealthy country's per capita environmental footprint.

So are countries with declining populations doomed to oligarchy until all the other countries in the world can agree on a global capital tax? Obviously there are better ways to proceed. Such as examining whether growth truly is necessary for further improving health and other material conditions of life, even in an already-wealthy country. And inquiring whether deep and permanent change is a virtue in itself, or whether good sorts of changes can be achieved without following policies obsessed with growth. Exploring such questions thoroughly would certainly have been outside the scope of this book, but failing even to hint at their existence was either a missed opportunity or a lapse of imagination.

9. In addition to the good translation, some other aspects of the book's transition to English succeed. The US hardcover has sewn signatures; my closely-read and much-shlepped French copy, which comes in at nearly 1,000 pages in a perfect binding, is already showing signs of loose leaves. The US edition has a pretty good index, whereas the French lacked one entirely. It's not quite complete, though: e.g., you won't find the above-mentioned references to Mars, "Bones" or The Economist in it, and I noticed a few references to Japan that were missing, too. On the other hand, the notes didn't fare as well. The notes in this book are long, discursive and informative; you really should read them. The French original used footnotes, but Harvard opted for endnotes, which means you'll either be doing a lot of flipping back and forth, or else ignoring a lot of good material.

A mixed blessing in both editions is that the technical appendix has been punted online. The package is generous, and includes files for the book's tables and figures in both pdf and Excel formats. The expository appendix (evidently translated by someone other than Dr. Goldhammer) includes hyperlinks to pertinent scholarly articles. Downloading the 2013 paper TP wrote with Gabriel Zucman, "Capital is Back," along with its own humongous technical appendix, might be a good choice: the present book's technical appendix refers to this often. If you want all relevant Excel files (including, e.g., some UN data and TP's comments to the Angus Maddison historical data), be sure to scroll through the pdf of the appendix and click on appropriate links, since several such items are absent from the website's "Piketty 2014 Excel files" folder.

Unfortunately, no one can know if this website will be maintained a few decades from now, or how easy it will be to read .pdf and .xls files by then. Just as is the case today with books by leading mid-20th Century economists, this is the sort of book that scholars will still want to read in future, even after it's out of print. They'll be very frustrated by the many cross-references to the technical appendix (at least 100-200 times by my eyeball count) if the information has vanished. I hope that in the not-too-distant future TP will freeze and publish a hard copy of this supplemental material for archival purposes.

It's also surprising that not even the website provides a comprehensive bibliography. The technical appendix includes a number of references, but these are spread out over a list at the beginning and more references embedded into a chapter-by-chapter commentary. Even this fragmented resource doesn't pick up many of the books and articles mentioned in the printed book's endnotes/footnotes. Again, I hope TP or the publisher will remedy this soon.

===

Among its other accomplishments, the book demolishes a couple of abstractions from the 1950s that economists have cherished for decades. One is the "Kuznets curve," according to which income inequality first rises, then peaks and thereafter declines as per capita GDP (or earlier, GNP) continues to rise. Another is the Modigliani "life-cycle" saving theory, which posits that the people save for their retirement and then spend pretty much everything by the time they die. TP's long runs of data show that both of these theories were plausible, if ever, at best only during a brief era around the time they were formulated, when both capital and income were distributed in a more egalitarian way.

How will the economists of today react to this book? Paul Krugman didn't provide an encouraging sign in his blog a few days after the US edition appeared. First thing he did was to try to "understand" it by plugging TP's data into another abstract 1950s-era mathematical model. The vast majority of mainstream economists didn't see the 2008 crash coming, but after it happened they insisted that their models weren't defective. If an historical event of that magnitude couldn't make a dent in their worldview, one has to be a great optimist to believe that this book will. More realistic may be to hope that this book's impact can be political. Luckily, that isn't up just to economists, but to readers like us.

By A. J. Sutter on March 17, 2014

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