I can think of two reasons it has not received more
attention.  The pessimistic possibility is that readers just
shrug it off, recalling that even Homer nods. The optimistic
possibility is that most readers are more charitable (less
presumptuous) in their interpretation and, as a result,
rely on context to understand what is being said.

The right way to consider a text that appears prima facie
"absurd" is to question one's initial interpretation.  In
this case, we can read Piketty as applying the Le Chatelier
principal to demand, as his adjacent example of oil makes
clear. While OPEC can drive oil prices up in the short run
by exploiting their market power (deriving from the relative
inelasticity of short-run demand), over time users of oil
will shift to other energy sources, oil demand will fall, and
the price of oil that is "too high" relative to the
available substitutes will be driven down. This in fact seems
to have happened (but of course there were also supply responses).
As Piketty says immediately after the part you  quoted,
such changes might take decades.

Alan Isaac



On 5/30/2014 11:31 PM, Steve Kates wrote:
> But Piketty then, in discussing these notions, makes
> a fundamental error in basic economic theory. As can be
> seen from the passage quoted below, he has confused
> a shift in demand with a change in quantity demanded.

> “To be sure, there exists in principle a quite simple
> economic mechanism that should restore economic
> equilibrium to the process: the mechanism of supply and
> demand. *If the supply of any good is insufficient*, and
> its price is too high, then demand for that good should
> decrease, which *should lead to a decline in its price*.”
> (p.6 - my bolding)

> He has here basically stated that insufficient supply (a
> shortage) will lead to a fall in price which you can see
> from the bits in bolding. I find it absurd that Piketty
> cannot tell the difference between a shift of the demand
> curve and a movement along the demand curve. You really do
> have to wonder how much sound economics there actually is
> embedded in the hundreds of pages of stats and data he
> then compiles if he is prone to make such a startling
> error. Even more curious is to me is that no one so far as
> I know has bothered to point this out.