Piketty for Progressives

Thomas Riggins

"Introduction" to Capital in the Twenty-First Century-- Part 1

Piketty opens his book by telling us the questions he wants to answer are two diametrically opposed queries stemming from the works of Karl Marx on the one hand and Simon Kuznets on the other. From Marx-- does capitalism inevitably lead to the concentration of wealth in fewer and fewer hands ?  From Kuznets -- does the later development of capitalism lead to less inequality and more social harmony between the classes? A third question is what lessons can we learn and apply to our present century from a study of wealth development since the eighteenth century?

Piketty admits that the answers he gives to these questions are "imperfect and incomplete." Now if you write a book whose conclusions are imperfect and incomplete you are inviting a lot critical commentary not only from the Left but  from the Right as well. In this respect the reception of his book has not been disappointing.  He thinks however his research provides a "new" way to understand the inner workings of capitalism. We shall see.

He believes that current bourgeois economic "science" has become so sophisticated  that the "Marxist Apocalypse" can be avoided. This is, however, an article of faith and no argument is advanced to substantiate this claim. He doesn't exactly say what the "Apocalypse" is but I rather think it refers to the collapse of the capitalist system and its replacement with a socialist economic order. Marx did give an argument for this outcome based on his analysis of the inner contradictions of the capitalist system. This analysis is in his work Capital which book Piketty mentions in passing only three times in his own book (according to the index, but I counted more) giving no indication that he read Marx's work.

Piketty admits that if/when capitalism provides a greater return on capital than it does on income and economic growth "then it automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based." This is quite a statement. It assumes we live in democratic societies where a person's social condition is based on merit. This is I think demonstrably false for the politically corrupt oligarchical societies of the West with which Piketty is concerned. Race, ethnicity, family background, wealth, availability of opportunities are the actual factors that determine the social conditions of people living in capitalist democracies not "merit." To say our societies are based on "values" that are plainly non-operative beyond the verbal level is no way to go about understanding reality as if effects most people.

He thinks there are ways democracy can "regain" its power over capitalism. He says "regain" because he thinks these negative features of capitalism were operant in the nineteenth century but were not so dominant in the twentieth (!) but seem "likely" to come into force in the twenty-first century. There are few, if any, people on the Left, I think, who view the twentieth century as a success story for meritocratic democracy (except maybe in a few isolated pockets).

Well, I don't want to jump to conclusions so let’s look more closely at the introduction to his book:

A Debate Without Data?

In this section Piketty points out that previous  theories about wealth and inequality have been based on a narrow set of facts that have been appealed to support many different interpretations. He is going to explain his sources and how he and his associates have expanded the amount of data available to researchers.

He also makes some comments in this section that reveal an interesting set of subtextual assumptions of which progressives  (especially Marxists) should be aware.  For instance, inequality is, he says, visible to many kinds of people and many different theories as to its causes flourish due to inadequate data. He tells us peasants and nobles, capitalists and workers, and bankers and non-bankers  [and we might add “slaves and masters” to the mix as well-tr] all see the world differently. Each group sees different “aspects” of reality and this conditions their outlook on justice and injustice. “Hence there will always be a fundamentally subjective and psychological dimension to inequality, which inevitably gives rise to political conflict that no purportedly scientific analysis can alleviate.”

One of the purposes of Marx’s Capital was to show just what nonsense this is and that class struggle and exploitation have objective roots in external reality and can be scientifically understood. Political conflicts between workers and capitalists (just as slave rebellions and peasant uprisings) are not the result of subjective psychological problems due to feelings of oppression because the “oppressed” group only sees its own “aspect” of reality. They are objective historical facts that can be scientifically studied and remedied by a correct understanding of the relations of production and distribution and the mode of value creation within a given society and Marx presents arguments to support his conclusions rather than just stating them as matters of fact.

All sides are represented in [bourgeois] democracy, Piketty thinks, and since there is no scientific explanation for the resolution of the political problems engendered by the subjective psychological reactions of different groups to their experiences of inequality we can conclude “Democracy will never be supplanted by a republic of experts— and that is a very good thing.” Piketty’s value judgment is, of course, a subjective psychological reaction to his understanding of the nature of inequality.

Piketty does see an important role, however, for the class of “experts” to which he himself belongs. While, he maintains, they cannot provide a solution to the  violent  political conflicts that inequality naturally engenders, they can do research which “will inform democratic debate and focus attention on the right questions.” Piketty says intellectuals such as himself “have the good fortune to have more time than others to devote themselves to study (and even to be paid for it— a signal privilege).” Yes, but who is the paymaster?

Before going into detail on his new methods he wants to present an historical review of how the problems of inequality were dealt with in the past, and so we move on to Part 2 of this review and will resume with the section entitled:

Malthus, Young, and the French Revolution