Thomas Piketty Goes Global  | The New Yorker


Speaking in 1918, with Europe ravaged by the horrors of modern warfare and Russia in the hands of the Bolsheviks, Irving Fisher warned his colleagues at the annual meeting of the American Economic Association of “a great peril.” That peril, which risked “perverting the democracy for which we have just been fighting,” was extreme inequality. “We may be sure that there will be a bitter struggle over the distribution of wealth,” Fisher, perhaps the most celebrated economist of his day, maintained. More than a century later—at another annual meeting of the American Economic Association—the spectre once more loomed over the discipline. “American capitalism and democracy are not working for people without a college degree,” Anne Case, an economist at Princeton, declared in January, as she flipped through slides in a large, windowless conference room. On a screen, charts showed breathtaking increases in suicide, drug overdoses, and alcoholism among less-educated whites over the past two decades. These “deaths of despair,” as she and her husband-collaborator, Angus Deaton, call them, originated in the deep unfairness of American society. When Fisher issued his warning, the richest ten per cent of Americans were taking home forty-one per cent of all domestic income. Today, they take forty-eight per cent.

If inequality has become the subject of intense public attention, a good deal of the credit goes to the French economist Thomas Piketty. In 2014, “Capital in the Twenty-first Century,” a dense tome published in English by an academic press, became an unlikely global best-seller; there are more than two million copies in print. Previously, Piketty, who teaches at the Paris School of Economics, had been an academic luminary but not a public one; the focus of his research, inequality, had long been a niche subject. Timing and talent catapulted him to fame. His book perfectly fit the post-Occupy Wall Street ethos, providing empirical rigor for the upswell in anger. The wounds of the Great Recession had hardly scabbed over; disillusionment with the rich and powerful verged on Jacobinism. The moment was ripe for a grand, iconoclastic theory, and that’s exactly what Piketty provided, with detailed figures and lucid prose. In earlier work, he and a frequent collaborator, the economist Emmanuel Saez, had the innovative idea of framing inequality in terms of the top one per cent’s share versus everyone else’s—eschewing the discipline’s usual formula of Gini coefficients, which are meaningless to the masses, and identifying a clear, common enemy. The problem was inherent in capitalism itself. Over the past century, the rate of return on capital (r) and existing wealth, owned disproportionately by the rich, had exceeded the rate of growth in the economy (g) as a whole. That had created a chasm of inequality comparable to what existed during the Gilded Age, before the gilding was removed by two cataclysmic world wars and the Great Depression. You could distill the core of Piketty’s theory down to three characters (r>g) and emblazon the formula on a T-shirt—something that nerdier subgroups of the population actually did.

Success has launched Piketty into the venerated position of the French global intellectual, like Pierre Bourdieu, Michel Foucault, and Claude Lévi-Strauss before him. Le Monde hosts his blog; he was enlisted as an adviser by a 2017 French Presidential campaign (of the Socialist Party candidate Benoît Hamon; he’d previously advised another such candidate, Ségolène Royal). And now, as if to secure his preëminence in this role, Piketty has published a yet more ambitious book, “Capital and Ideology” (Harvard). It encompasses history, political science, and political theory, and is even more voluminous than its predecessor. This reviewer must report that the eleven-hundred-page work broke an (admittedly unsteady) card table and later caused a carry-on to exceed the weight limit on an (admittedly stingy) European airline.

There’s a reason for the heft. “Capital and Ideology” sets out not only to describe capitalism but also to help us “transcend” it. Piketty both diagnoses and prescribes: he tries to expose the contradictions of the reigning ideology of “hypercapitalism” and its malign consequences (including a populist-nativist backlash), and, to stave off disaster, recommends a breathtaking series of reforms. They include a schedule of taxation on income and wealth that reaches ninety per cent and the elimination of nation-states in favor of “a vast transnational democracy,” which will secure “a universal right to education and a capital endowment, free circulation of people, and de facto virtual abolition of borders.” A serious disease, Piketty believes, calls for strong medicine.

“Capital and Ideology” opens with an arresting pronouncement: “Every human society must justify its inequalities: unless reasons for them are found, the whole political and social edifice stands in danger of collapse.” War, recession, religion—every facet of human existence has its roots in inequality, Piketty tells us. Indeed, he uses “society” and “inequality regime” almost interchangeably. If there are hazards in such a monocausal account, it may be a necessary simplification in the quest to anatomize social organization from the Middle Ages to modernity.

Adopting a theory of the French philologist Georges Dumézil, Piketty writes that early societies were “trifunctional”—in ways largely determined by birth, you were a member of the clergy, the warrior-nobility, or the peasantry. (Something similar, he notes, can be seen in “Planet of the Apes” and “Star Wars.”) During this period of limited mobility, inequality was justified by the notion that the castes were interdependent—like the limbs of the body. If someone gets to be the brains, then someone else has to be the feet. After the development of the central state and later disruptions like the French Revolution, inequality was taken to be a necessary feature of “ownership societies,” premised on individual liberty but also on the “sacralization of private property.”

In the twentieth century, this model fell apart. “The ideology of the self-regulated market in the 19th century led to the destruction of European societies in the period 1914-1945 and ultimately to the death of economic liberalism,” Piketty writes. “We know now that this death was only temporary.” In the postwar era, societies drifted into either social democracy, which Piketty thinks is flawed but closest to his ideal society, or communism, which failed utterly. What ensued was the revenge of the ownership society. The dominant ideology of the modern era, in Piketty’s view, has been one of “neo-proprietarianism,” in which private-property rights are worshipped above all, auguring another disaster.

Spenglerian in scope, Piketty’s critique reaches far back in history and across the globe: he explores the “inequality regimes” in Mughal India, slave colonies in the West Indies, and post-Soviet republics. It’s an admirable corrective to the usual Eurocentrism of Western economists, even if most readers will feel the impulse to skip ahead four hundred pages to the discussion of modern economies. Piketty has modified his thinking since his previous opus. Rather than imply that rising inequality is a problem inherent in capitalism, he now suggests that the levels of inequality we get are the ones we countenance—that they’re entirely a matter of political and ideological choices. His famous formula, r>g, has all but disappeared. In his retelling, the so-called Trente Glorieuses, the thirty years of relative equality between 1950 and 1980, were the result not of two world wars—which played “only a minor part in this collapse,” he has determined—but, rather, of political decisions made “to reduce the social influence of private property.”


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