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No one would have ever thought that a 700-page book on economics like Thomas Piketty's Capital in the Twenty-First Century would hit the best-seller lists and become a lightning rod for political controversy.
Then again, 10 years ago, all of the experts were saying that the price of oil (then $30 a barrel) was unsustainably high.
Clearly, with oil at $100-plus per barrel, the energy experts were wrong. And, as it turns out, the classical economists were wrong about how energy affects the economy.
What does Piketty's Capital in the Twenty-First Century have to do with making money in energy? A lot more than you might think.
You can't make big money investing in energy without understanding how it works…
Thomas Piketty and Investing in Energy
I first met Thomas Piketty over a cup of coffee. It was a particularly disagreeable cold February morning in 2001. Back then he was an up-and-coming visiting professor at MIT who was starting to look at income inequality, one of the most divisive issues in economics, in what he hoped was a more objective way.
I, on the other hand, had already begun the journey to map out a better way of looking at how energy operates in a modern market.
Turns out we had a lot to talk (and disagree) about.
We still do.
I may have retired from my university professor days, but I haven't left those academic debates. Sometimes those debates spill over into broader conversations. And that's certainly true in Thomas' case.
It seems like all of the pundits on both ends of the political spectrum have opinions on Piketty's book and ideas.
By my count, this isn't the first time that economics has become the subject of global debate.
In 1867, Karl Marx published the first volume of Das Kapital, Kritik der politischen Ökonomie ("Capital: Critique of Political Economy"). Most thought the work would never be equaled as a magnet for political, intellectual, and opinion discord… a debate that continues today.
Yet filling that bill these days as a contemporary lightning rod is Piketty's Capital in the Twenty-First Century. Now a professor at the prestigious Paris School of Economics, Thomas has unleashed the latest firestorm in the still unresolved debate over global wealth and inequality.
Rarely has an academic book had such an impact.
And make no mistake: This is a 685-page tome with a thesis that doesn't make for easy reading, even in the comic book version being bandied about by pundits.
And boy, has it ever become the center of a ballooning public controversy. Most of the conversation has been driven by narrow partisan and self-serving assumptions. When complex issues become public discussion, that's usually the case.
So what does all of that have to do with investing in energy?
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.