Piketty for Progressives -- Part 5

Thomas Riggins

This posting will cover sections 11 and 12 in Piketty's introduction to Capital in the 21st Century.

11. The Fundamental Force for Divergence: r > g

This formula, r is greater than g, where r is the  average annual rate of return on capital and g is the rate of annual economic growth “sums up the over all logic” of Piketty’s arguments regarding growing inequality under capitalism.

Piketty thinks the outlook for the 21st century is that r will be much greater than g and this means that inherited wealth will be greater than output or income. Under the rule of r > g it follows that people with wealth need save only a small fraction of their income and it will accumulate faster than the economy does thus increasing inequality. A real possibility exists that the increase in inequality will undermine the principles upon which bourgeois democracy is based. Billionaires, for example, could be able to sink so much money into elections and lobbying that they will basically control the electoral process and the government and people’s democratic rights will honored in name only if at all.

Piketty thinks that this scenario is a real possibility but it is not inevitable. Besides this powerful D-force there are also C-forces at work that could delay or even completely counteract it. He thinks, however, that the decrease of g in the coming decades is very likely.

His view is, he says, less “apocalyptic” than Marx’s view. But I think he mischaracterizes Marx’s outlook. He says Marx has a principle of “infinite accumulation and perpetual divergence” because he thinks g will be 0  due to 0 growth in productivity. Because of this there will be a revolution to overthrow capitalism (the Apocalypse). But this isn’t Marx’s view at all. His view, somewhat simplified, is that  capitalism will eventually run out of markets due to a crisis of over production and will breakdown because it won’t have the profits needed to sustain itself.

Piketty says his theory of r > g has nothing to do with any “Imperfections” in the market. It is not inevitable but is a likely occurrence and we should be aware of it. He stresses that the “more perfect” the capital market the more likely is r > g. Does this imply that the “better” the capitalist system is the more inequality it will create? This would make it incompatible with any kind of democracy and logically implies that some sort of fascist anti-democratic state is its natural outcome.

Piketty thinks the capitalist state will have to intervene and manipulate the outcome of the “more perfect” capitalist market to counteract the negative effects of r > g. He suggests “a progressive global tax on capital.” He doesn’t think this will be a real world solution to the problem and whatever the different nation states end up doing will be “less effective.” Does this mean that, after all, in the real world r > g is actually unstoppable? Is the Apocalypse destined to be our fate?

12. The Geographical and Historical Boundaries of Piketty’s Study

The upshot of this section is, that while Piketty will use information from many areas of the world to bolster and develop his views, he will rely “primarily on the historical experience of the leading historical countries: the United States, Japan, Germany, France, and Great Britain.”

He thinks the UK and France are particularly  important because they have the best economic records kept from the 19th century and they were the leading countries of the “first globalization” (1870-1914) of international trade and finance. This, by the way was the period analyzed by Lenin in his Imperialism: The Highest Stage of Capitalism. This first globalization was, Piketty says, “prodigiously inegalitarian.”

Piketty notes that the “first globalization,”  is “in many ways similar” to the second one which has been going on “since the 1970s.”  It is so similar that Lenin’s book on Imperialism is still largely relevant for understanding it. One of the weaknesses of Piketty’s book is that neither “Lenin” nor “Imperialism” appear in its index — a strange omission in a work trying to explain the origins of, and remedies for, inequality.

One of the similarities Piketty notes is the fact it was not until beginning of the 21st century that the leading imperialist countries attained the level of stock market capitalization  vis a vis GDP as the UK and France had at the beginning of the 20th century.

He next explains why he spends so much time on France. The first reason is that it has records going all the way back to the late 1700’s. The second reason is he thinks France is more typical than the US and its future will more likely be what most states will experience rather than that of the US. This is because the US population went from 3 million in 1776 to 300 million today. That quantitative leap has had its qualitative accompaniment  and the US “is no longer the same country it was.” France meanwhile has only doubled its population from 30 to 60 million over two hundred years not increased it a hundred fold. It is still basically the same country. Piketty doesn’t see the world population increasing 100 fold in the next two hundred years so French development is more likely representative to the future.

He means the trends in inequality seen in French history are more useful to predict future developments than are those seen in US history. This is another example of “American Exceptionalism" as the US experience “is in some sense not generalizable” and social class and inequality in the US are “so peculiar” when contrasted with other countries.

The third reason is that France is “interesting” because its revolution was more “bourgeois” than the English (1688) or the American (1776). The English kept their nobility and the Americans their slaves while the French actually established “ the ideal of legal equality [of men]  in relation to the market.”  This has important implications in discussing the growth and future development of inequality. Piketty also says that the concentration of wealth was  the same in Britain as in France so even though the French had legal equality for all and the British did not this was not enough to “ensure equality of rights tout court.”

We will finish the introduction to Piketty's book in the next posting.

Lenin: State and Revolution: Chapter 5 - Withering Away the State (Part Three) -- Review

Thomas Riggins

Chapter 5 of State and Revolution  has a brief introduction and four sections. Part Three of this review covers section four. 

4. Higher Phase of Communist Society

This is a very important section and should dispel many incorrect notions about the nature of socialism, the level of development towards communism in the former and current socialist states, and the possibility of creating any kind of society that brings freedom and justice to humanity as long as capitalism exists and a state is necessary to regulate social life.

This section is an extended commentary by Lenin on the following quote from Marx’s Critique of the Gotha Programme: “In the higher phase of Communist society, when the enslaving subordination of individuals in the division of labour has disappeared, and with it also the antagonism between mental and physical labour; when labour has become not only a means of living, but itself the first necessity of life; when, along with the all-round development of individuals, the productive forces too have grown, and all the springs of social wealth are flowing more freely— it is only at that stage that it will be possible to pass completely beyond the narrow horizon of bourgeois rights, and for society to inscribe on its banners: from each according to his ability; to each according to his needs.”

Lenin says that in light of this quote we can understand why Engels mocked those who conjoined the notions of “freedom” and “state.” Lenin frankly remarks that: “While the state exists there is no freedom.” There can only be relative degrees of repression. 

Today we are faced with the issue of increasing inequality between the citizens in the various states that presently exist on the world stage.  A recent book by Thomas Piketty (Capital in the 21st Century) has brought this issue to the forefront of political discussion. But nowhere in his discussion  does he deal with one of the major causes of social inequality. This is, Lenin points out “the antagonism between mental and physical labour” which is “one of the principal sources of modern SOCIAL inequality.” 

Under capitalism, as a matter of fact, inequality can never be eliminated. Some will always be “more equal than others.” This is because under capitalism the division of labor cannot be abolished. Nor can it be removed simply by eliminating the capitalists. It is “impossible to remove immediately by the mere conversion of the means of production into public property, by the mere expropriation of the capitalists.”  No one should be surprised  that social inequality existed in the former socialist states and still exists in countries today calling themselves socialist.

These states only provided or still provide the foundations for the possible future social conditions whereby this division could be eliminated. The development of industrial technique must attain a level where a super abundance of social wealth will be available for social distribution and universal education will eliminate the separation between physical and mental labor and the inequality that it breeds. Capitalism retards this growth in technique but the elimination of capitalism presents the possibility for its growth. 

How this future possibility will eventually present itself and exactly when such industrial growth will ever become so developed that all human beings can equally share in its benefits, Lenin informs us “we do not and cannot know.” But we do know there will be no “withering away of the state” before this time comes. One of the points of this  for us is that all criticism of socialist states, past and present, for not bringing about some sort of equalitarian worker’s paradise is based on ignorance of the actual social realities the founders of Marxism discussed  concerning the prospects of a future communist society.

Lenin points out that those bourgeois critics of socialism who sneer at its claims of liberation and label as Utopian dreams the ideals of a society of complete social equality in which people create social wealth according to their abilities and share it according to needs only display “their ignorance and their-self seeking defense of capitalism.”

Lenin calls them ignorant because while this highest stage of Communism has been discussed  by the founders of Marxism as a theoretical possibility “it has never entered the head of any Socialist to ‘promise’ that the highest phase of Communism will arrive.” This phase would require people quite unlike the common run of humanity today— people raised and educated to share and live lives of unselfish devotion to their common humanity as well as developing their individual

talents and abilities with no desires to do so at the expense of other human beings. They would be living in a society capable of producing and sharing social wealth unlike any society of the past or present. Foreseeing this possibility is not the same as “promising” it will ever come about but it is a possible future to keep in mind and for which we can strive.

Until that day comes, when the state as we know it has “withered away,” Lenin says that “Socialists demand the strictest control, by society and by the state, of the quantity of labour and the quantity of consumption.” But this control has to begin not in the present society but with the overthrow of capitalism and the capitalist state— “a state of bureaucrats”— and its replacement by “a state of armed workers” (the Second Amendment will have some use after all).

Lenin has in mind soviets of  workers and soldiers as they appeared in Russia in 1905 and 1917. He thought of these soviets as models of real democracy (and by a dialectical inversion as a “democratic dictatorship”— a term which confounds many socialists today who have forgotten what is “dialectical” in dialectical materialism).

This new post capitalist state will turn all the citizens into workers of one gigantic syndicate or monopoly — “the whole state” — controlled and governed by the workers themselves by means of the soviets. The reality, however, turned out differently from Lenin’s ideas expressed here in chapter five. No actually existing socialist state was ever capable of existing as a state based on the “armed workers” and they all ended up with professional standing armies and administered  by bureaucrats. 

These states were handicapped by developing in industrial backwards, or devastated, areas and were never able to create enough social wealth to advance beyond the most rudimentary socialist beginnings  even though they brought about giant leaps forward in education, economic and social well being, literacy, and health to the populations living in them. The surviving socialist states are still grappling with many of these problems while simultaneously furthering the well being of their citizens.

Lenin wants to be clear on the scientific difference between Socialism and Communism. Socialism is the first and lower phase of Communism-- but it is not full Communism. Socialism has succeeded in turning the means of production, formerly owned and controlled by capitalists, into socially owned public property. This is technically "Communism" but it is not completely evolved mature Communism, hence this lower phase is best dubbed Socialism and the term "Communism" reserved for the more advanced and higher phase into which Socialism will hopefully evolve. 

Marx, basing himself on materialist dialectics, sees Communism evolving out of capitalism via Socialism. The Socialist stage still has many capitalists "taints" associated with it and retains, in Marx's words, "the narrow horizon of bourgeois rights." Bourgeois rights still predominate in the creation and distribution of wealth-- goods and services are dished out, in the main, to each according to his/her work. 

There must still be a state apparatus to ensure that rights are preserved and recognized. In the beginning of the establishment of Socialism then the new state will be charged with defending bourgeois rights-- it will be, in fact, a bourgeois state administered by workers. Lenin puts it this way, "for a certain time not only bourgeois rights but even the bourgeois state remains under Communism [i.e., the first phase--tr], without the bourgeoisie!" Capitalism without the capitalists!-- or least without them in control. There are "socialist" countries today still evolving along these lines.   

Lenin says this view of a bourgeois state without the bourgeoisie may look like a paradox but Marx held that it was inevitable “in a society issuing from the womb of capitalism.” Nevertheless, democracy is absolutely necessary for the working class but it is only a stage along the road from feudalism to capitalism and on to Communism.

Democracy is seen by the workers as leading to equality and ''equality'' is “a useful slogan” as long as we remember that we mean by it “the abolition of classes.” But we get only formal not real equality under democracy. We get real equality only under Communism when distribution is ruled by needs not work. 

Lenin admits that“we do not and cannot know” how Socialism will transform itself into this future higher state but it will come after the workers have smashed to bits the current form of the bourgeois state and substituted a higher form of state (still a state) based on a people’s militia of “universal participation.”  [Bill of Rights Socialism based on the Second Amendment ?]

 At this stage quantitative changes will lead to qualitative changes. By this Lenin means that the vast numbers of the formerly oppressed are now directly involved in ruling and administering the economy and the state and this changes the way democracy functions— no longer a tool of the bourgeoisie to control the people but a tool used by the people to take charge of their own lives. The recent midterm elections in the United States, giving control of the Senate to the right wing reactionary Republican party, serves as a reminder of how democracy serves as a tool of the bourgeoisie (not that a Democractic victory would have changed this relationship but it would have appeared less sharply). 

All this depends on the advanced stage that capitalism has reached where universal literacy has been attained (“already realised in most of the advanced capitalist countries”) and the workers and been “trained” in how to operate the vast

complexities of the capitalist industries and factories already “socialised” put presently still owned by the capitalist class. The specialized workers—i.e., trained economists, agronomists, scientists and engineers will, Lenin says, work “even better” for the workers than for the capitalists. 

 I am not so sure how the “specialists” would have reacted to getting “equal” pay with the workers under the new system as Lenin says everyone will be a state employee all of whom will “do their share of work” and “should receive equal pay.”  It is moot anyway as this program never got off the ground as it required revolutions in the advanced capitalist countries to succeed as well as what was going on in Russia. I don’t think Lenin, at this time, thought the Russian Revolution was going to be left high and dry on its own.

Nevertheless, it is interesting to see what he thought the first stage, the socialist stage, would be like after the revolution. The new socialist state would convert the capitalists into employees and the workers themselves would run all the economic institutions in the state— everyone would be a state employee. The result of this would be that: “The whole of society will have become one office and one factory, with equal work and equal pay.” If this is the practical realistic outlook for the lower stage, the socialist stage, of Communism it is just as well the founders did not engage in “Utopian speculations” concerning what the “higher stage” would be like.

Lenin says that this lower stage of “‘factory’ discipline” is not the ideal goal of the revolution but a necessary foothold to overcome “all the hideousness and foulness of capitalist exploitation in order to advance further.”  Once this first stage has been achieved and the human collective of the new order has learned to work and share without the selfishness, greed, and alienation from its humanity that capitalism fosters and practicing human decency has become a habit, then and only then will it be possible to begin to transition to the higher stage of Communism and the withering away of the state and our motto can truly be Novus ordo seclorum.

Coming up: the sixth and last chapter of State and Revolution—“Vulgarisation of Marx by the Opportunists” ( plus ça change, plus c’est la même chose.)

The Death of Klinghoffer: Reflections

Thomas Riggins  All the recent fuss at the Metropolitan Opera over John Adams' 1991 opera The Death of Klinghoffer led me get the DVD from Netflix to watch. The DVD gave me the opportunity to start and stop and replay parts of the opera and the subtitles (even though the opera is in English) allowed me to follow the exact wording that was being used to express the ideas and emotions of the singers. The DVD is of the Penny Woolcock film version made for British TV in 2003 and is generally considered faithful to the staged version of the opera. I think I can safely say there is nothing anti-Semitic or anti-Jewish or pro-terrorist about this opera. I can also say that those who claim that it is so have not seen it, or not understood it, or have a personal agenda to espouse having nothing to do with the merits of the opera. In our political context in the US the main objection to the opera is that it is not anti-Palestinian either. The objectors seem to be of the opinion that you cannot be against anti-Semitism  unless you are also for anti-Palestinianism. The opera takes a stand against terrorism qua terrorism  and shows the futility and horror of trying to solve social and political problems waging terrorist actions against unarmed civilians. The opera highlights three species of terrorism-- it sympathizes  with none of them. It highlights the terrorism waged against the Jews of Europe by European Christians who formed the core of the fascist movements in World War II and led to the concentration camps and the Holocaust.  It also shows the terrorism unleashed against the civilian Arab population in Palestine by the Zionists after the independence of Israel when tens of thousands were driven from their homes and land and had their houses and fields turned over to Jewish settlers without recompense and many Arab men, women, and children were murdered by terrorist groups such as the Irgun led by future Prime Minister Menachem Begin: this was the Nakba. And it shows the terrorism elicited by the Nakba in which the Palestinians engage. The high jacking of the Italian cruise ship the  Achille Lauro and the cold blooded murder of wheelchair bound senior citizen Leon Klinghoffer is the subject of the opera and it makes no excuse or attempt to glorify the action of the terrorists involved: members of the Palestine Liberation Front. The Germans and the Israelis have made peace and the Germans have paid reparations to try and make up for the unforgivable and impossible to make up for actions of their terrorist forebears. Perhaps Israel can do the same for those who were the victims of the  Nakba and more recent acts of terrorism such as the killing of over two thousand civilians (including 500 children) in Gaza. Perhaps the Palestinian terrorists would reciprocate by stopping the killing of Israeli civilians including peaceful women and children. If this opera has any message it is that terrorism breeds terrorism and is never justified as it diminishes the humanity of all who engage in it. The root cause of terrorism (one group's cruel and inhumane treatment of others) must be addressed without evasion and excuses.

Piketty for Progressives-- Part 4

Thomas Riggins

9. The Major Results of Piketty's Study

Piketty says his study has arrived at two major results. First, that economic determinism is not  the answer to why we have inequality in wealth and income between people. But no economist worth his or her salt has ever been an economic determinist, so this is not a very startling conclusion. 

Any Marxist would ready agree with this observation by Piketty (it is commonplace in the writings of Marx, Engels and Lenin): inequality results from the interplay and conflict of forces between people in the economic, political, and social institutions in which they find themselves and the relative power they have at their disposal to enforce their values and choices; inequality "is the joint product of all the relative actors combined." Marxists might be a little more concrete about who these actors are (classes and social strata) and what the power relations rest upon (ownership of the means of production, ability to create surplus value and such) but the first major result of Capital in the 21st Century echoes one of the major results of Capital in the 19th Century. 

But, "the heart of the book" Piketty says, is his second major result. This is that there are major forces at work that push both towards increasing inequality (divergence) and decreasing inequality (convergence). I will call these D-forces and C-forces.

What is important, and will be rejected by all apologists of the Ann Rand version of laissez faire capitalist hokum (surely there are no intelligent Randists left after Greenspan's The Age of Turbulence) as well as mainstream bourgeois economists, is Piketty's findings that there is no internal mechanism within capitalism itself that can regulate and control the D-forces and prevent them from increasing "permanently."

Marxists would say the internal contradiction within capitalism between the C- and D-forces is certainly not permanent. Ultimately the build up of the pressure from the D-forces will explode the system (there cannot be infinite inequality). Piketty's language is not the language of Marxism, but in his own way he has restated, in the language of neoclassical economics, the objective reality of Marx's Apocalypse.

The D-forces are heading in that direction and Piketty wants to find a program that can bolster the strength of the C-forces and drag  back the D-forces, if not to a stop, at least to a non-critical mass. This won't be done within the capitalist system qua capitalist so the energy required by the C-forces must come from outside. There's the rub.

The above states the main points of this section. However, Piketty mentions two theories which have been put forth to counter the D-forces from within the system without extraneous help for the C-forces. Both of these theories are logically possible but their practical implementation as a solution to growing inequality is "largely illusory" if the history of capitalism has anything to tell us about them. I will only mention them in passing as Piketty doesn't put much stock in them.

The first is the  "human capital hypothesis." As technology advances workers need more and more skills and hence have to be paid more so capital will be transferred from the money bags to the working class increasing the C-forces and leading to greater democratic control of society. A pipe dream. 

The second is that "class warfare" will be replaced by "generational warfare" because science is making people live longer. This type of "warfare" is more benign since all young people will end up old people (all workers won't end up capitalists on the class war model).  Young people will begin saving up for old age so they will have enough to mitigate the effects of the D-forces. The young will be ants and not grasshoppers. Another pipe dream. 

It says something about "economics," as taught in bourgeois educational establishments, that capitalism's existential threat (unsustainable D-force pressure) can produce solutions that amount to pipe dreams.

The real counter to the D-forces, Piketty says, as revealed by history has been "the diffusion of knowledge and skills."  This "diffusion" must be an external factor independent of the capitalist system because Pitketty has said capitalism  has no

internal mechanism to prevent run away D-forces, or if it is an internal factor then it cannot prevent the Marxist Apocalypse. 

10. Forces of Convergence, Forces of Divergence

Piketty says that while the diffusion of knowledge and skills is the main source for the C-forces, it is nevertheless a fact that the D-forces can overcome it and increase in power. This is because the C-forces need to be reinforced by social policies that are not sufficiently built into the mechanism of capitalism to counter the the D-forces (which are built in) on their own. 

Presently there are two major D-forces  independently at work in the world economy. The threat, Piketty says, is that these two forces may merge and become unified thus creating a new and super powerful motor driving inequality.  From what would this Super D-force be composed? From the current D1-force which is the ability of top-earners to “quickly separate themselves from the rest by a wide margin” and the current D2-force which is itself an amalgamation of forces that bring about “an accumulation and concentration of wealth when growth is weak and the return on capital is high.” The D2-force is the “principal threat’’ to income equality.

Piketty uses the example of the United States from 1910 to 2010 to show how the D1-force has been developing. What has happened is an explosion in the income of the top managers of the large capitalist enterprises that dominate the economy. Gigantic inequality gaps separate this capitalist elite from ordinary workers and citizens. Piketty says the most likely explanation of this inequality gap is the power these capitalists have of setting “their own remuneration”  and to do so independently “of their individual productivity.”

This, by the way, this could never have come about in a properly functioning democratic society. It suggests that capitalism is incapable of creating such a society and that the problems of inequality cannot be solved within the parameters of such a society.

Bad as this D1-force is, it is the D2-force that Piketty considers the main threat to equality and the growth of the C-forces under capitalism. It is this second force that we will deal with in the next installment of “Piketty for Progressives.” 

Lenin: State and Revolution: Chapter 5 - Withering Away the State (Part Two) Review

Lenin: State and Revolution: Chapter 5 - Withering Away the State (Part Two)

Thomas Riggins

Chapter 5 of State and Revolution  has a brief introduction and four sections. Part Two of this review covers section three. 

3. First Phase of Communist Society

To avoid confusion it must be pointed out that Marx speaks of two phases of "Communism"-- a lower and a higher. By convention the first or lower phase has become known as "Socialism" and the higher or advanced stage as "Communism"

proper. Except for direct quotations, I shall use the term "Socialism" to denote what Marx calls the first phase of Communism and "Communism" to refer to what Marx calls the second phase of Communism.

In this section Lenin presents  Marx's remarks on the misguided views of Ferdinand Lassalle, one of the early leaders of the German working class, some of whose opinions he thought pernicious. Specifically, he wanted to disprove Lassalle's view that workers living under Socialism would get "the full product of their labour."

The idea here was workers would not be exploited because under Socialism: “to each according to his work’’ meant if  I created $100 of social wealth that’s what society would give back as part of my disposable income. Not so, according to Marx. The Socialist state has to deduct from wages money to put aside as a “reserve fund” to make improvements in production and maintain infrastructure. It also needs to deduct money for a social consumption fund to pay for schools, hospitals, pensions, aid to people who are sick or can’t work, salaries for public employees,  etc. If each fund got $10 then for every $100 of social wealth I created I would get back $80 for my disposable income.

The state, just as the former capitalist, would be taking $20 of the surplus value I created. This accounts for the “social” in Socialism. The difference is the capitalists would not be taking the wealth I created and using it for themselves and living high on the hog while I just made do; the State would be using it to do things for me that I really need but could not provide for myself— medical services, rent subsidies, price controls so that food was cheap and available, the secret police to keep the capitalists from making a comeback, etc. 

In Marx’s words: “What we are dealing with here is not a Communist society which has developed on its own foundations, but on the contrary, one which is just emerging from capitalist society, and which therefore in all respects — economic, moral and intellectual — still bears the birthmarks from the old society from whose womb it sprung.” This is the lower phase, right after the revolution, of “Communism”, AKA “Socialism.” Socialism covers this whole first phase out of which the second phase true Communism will hopefully emerge. Unfortunately none of the revolutions of the 20th century succeeded in even establishing the first phase, let alone the second phase of this project— although some countries are still trying to figure out how to get the first phase going.

Now, Lassalle thought that there must be a “just distribution” of the social wealth under Socialism— “the equal right of each to an equal product of labour.” There would be no inequality under Socialism (and nothing for Piketty and others to complain about). Marx is interested in this idea of “equal right.”  He agrees that we have in Socialism “equal rights” but we must understand that “rights” presuppose inequality.  I can demand the right to vote only if I don’t have it. What is the point of demanding what I have?

To demand a “right” is to demand equal standards be applied to all people and people are not really all equal to one another.  In the real world some are smarter, some are richer, some are better educated, some are stronger, etc. In the words of Blake:

Every night and every morn

Some to misery are born,

Every morn and every night

Some are born to sweet delight.

Some are born to sweet delight,

Some are born to endless night. (Auguries of Innocence)

Socialism wants to change these morns and nights, but only Communism will bring sweet delight. Marx says we are still haunted by the bourgeois order when we demand rights because rights are under the regime of “bourgeois right.”  As a good dialectician Marx says that equal rights violates the concept of equality and is actually a form of injustice. Lassalle is wrong and under Socialism justice demands “unequal rights.” Huh?

Suppose under Socialism we get equal pay for equal work. Laura and Judy both get paid the same. Laura is single and saves up some of her pay so she has money to go on trips or to buy extra goodies. Judy is a single mother of two and can’t save up money for trips and extra goodies as three people have to live on her pay. Equal pay results in an unequal outcome. This is the regime of from each according to his/her ability to each according to his/her work. 

While there is no capitalist exploitation of human beings (private property in the means of production having been abolished) Lenin nevertheless points out that Socialism “still cannot produce justice and equality.”  This is because under Socialism distribution is governed by  “work performed.”  Real “justice” and “equality” must await the second or higher form of the transition— Communism where distribution will be governed by need.

 “No justice, no peace” is therefore really a temporary slogan limited to the capitalist era since, while under Socialism there is still “no justice” ( in an absolute sense) there is nevertheless peace because “bourgeois right” is completely enforced and people understand that they are working together to achieve a future Communist society in which the bourgeois notions of justice and equality will have no meaning.

In the words of Marx: “These defects are unavoidable in the first phase of Communist society [Socialism], when after long travail, it first emerges from capitalist society. Justice can never rise superior to the economic conditions of society and the cultural development conditioned by them.” Critics of the 20th century failures and successes of the Socialist revolutions and their successor states still pursuing their goals in the 21st should be mindful of this insight given by Marx.

Lenin points out that Marx was aware (not being a Utopian) that with the initial overthrow of capitalism and the beginning of Socialism the only standard of fairness and the sense of what is “right” is what was learned under the old system— “a fair day’s wage for a fair day’s work”, “equal pay for equal work,” “a living wage,” etc. “Bourgeois right” is the only standard they will initially have and “a form of state will be necessary, which while maintaining public ownership of the means of production, would preserve the equality of labour and equality in the distribution of products.” 

The Socialist state, even as it sets in motion its own withering away, functions at this level to protect bourgeois right and enforces actual inequality. Even under Socialism we understand a better world is possible and that world is explained in the last section of Chapter 5: “Higher Phase of Communist Society.”

This will be discussed in part 3 of our review of Chapter 5 of State and Revolution.

Piketty for Progressives -- Part 3

Thomas Riggins

5. From Marx to Kuznets, or Apocalypse to Fairy Tale

As we have seen, Piketty rejects Marx's views about the future of capitalistic inequality, which  he called "Apocalyptic", and in this section he will also reject the views of Simon Kuznets (1901-1985) which he finds too optimistic.  Kuznets engaged in empirical studies and arrived at the view that as capitalism became more advanced income inequality would decrease-- on the principle (mis-attributed to President Kennedy) that "a rising tide lifts all boats."

Although Piketty does not accept Kuznets’ conclusions, he credits him with being the first to empirically utilize two sources of information which must be used in conjunction to be able to meaningfully study income inequality and its evolution__ i.e., growth of national income for a country and the distribution of that income to individuals. It was using such information that Kuznets arrived at his views regarding the decrease of inequality. The question is--  did the data reflect universal trends within advanced capitalism or just an historical fluke? If the latter then Kuznets’ theory was a "fairy tale"-- as Piketty suggests by this section title.

6. The Kuznets Curve: Good News in the Midst of the Cold War

In this section Piketty says that Kuznets admitted his statistical discovery of a decrease in inequality in the US (the period covered was 1913 to 1948) was “largely accidental.” In his 1953 book Shares of Upper Income Groups in Income and Savings he even admonished his readers not to jump to conclusions based on his data. But that is just what he did himself two years later in a famous lecture where he proposed a bell curve to explain the relation between capitalism and
inequality. As capitalism begins to develop inequality increases between the capitalists and the general population and peaks just as capitalism becomes mature and widespread, thereafter it begins to decline as the benefits of the capitalist system begin to be shared by all.

Even in this lecture Kuznets says his statistics reflect unique historical circumstances, but also suggests that, despite the historical specificity that shaped his curve, the inherent nature of the capitalist system itself would also work to produce the curve. This was simply cold war propaganda posing as science.
Piketty points out that in the lecture Kuznets told his audience (it was a speech to the American Economics Association) that he was giving an optimistic twist to his theory to, in his own words,” keep the Third World “within the orbit of the free world.”

Nevertheless, despite this lecture and other papers, Piketty says that Kuznets showed the true “scientific spirit” in his big 1953 book (the supposed first use of meaningful statistical analysis) even if the Kuznets curve is a fairy tale. It was the two world wars and the Great Depression that brought about a decrease in inequality not the inherent tendency of capitalism.

7. Putting the Distributional Question Back at the Heart of Economic Analysis

Piketty thinks the question about how wealth is distributed is important. He says there has been a big increase in economic inequality since the 1970s— in all the developed countries, but especially in the U.S. In the Third World it is possible that economic development may decrease inequality— especially the development of China. All of this, he says, is a cause “of deep anxiety.” He does not make clear why this should be so— whether it is the growth of inequality, the development of China, or both.

Also, markets that are supposed to exhibit “balanced growth” according to Kuznets and others ( real estate, oil and financial) are showing remarkable “disequilibrium.” Piketty asks who will be running the show in 2050 or 2100 (i.e., controlling the world as it were). He lists several possibilities, one of which is the Bank of China. I can see the origin of “anxiety.” The Bank of China is ultimately under the control of the Chinese Communist Party (it is state owned).

In any case, the distribution of wealth becomes, for Piketty, the most important area of study if we are to understand the growth of inequality. To determine this we must collect data on the economic history of many countries and forecast future developments by a scientific understanding of past and present trends.

8. The Sources Used in Piketty’s Book

Piketty says his work is basically an extension of the work begun by Kuznets in his study of the period 1913-1948 in the U.S.  Kuznets’ statistical methods were extended to France, the contemporary U.S., and to other countries. But “the primary source of data” for the book comes from the World’s Top Incomes Database (WTID). [Google: The World’s Top Incomes Database]

Piketty says there are TWO components of income— from labor and from capital.
He says labor income consists of wages, salaries, bonuses, non-wage labor, and income “statutorily classified” as such [tips?]. Capital income consists of rent, interest, dividends, profits, royalties, capital gains, and “other income” from land, real estate, financial instruments, industrial equipment, etc. [!]. It is obvious that this is an un-Marxist way of treating income but Piketty can define his categories anyway he chooses since he is not a Marxist economist. We shall see later how useful, or not, his definitions are.

Piketty says his book “stands out” from those before it because he has “made an effort to collect as complete and consistent a set of historical sources as possible”
for the study of the distribution of income and wealth “over the long run.”

We will resume the fourth installment  of this commentary on Piketty’s introduction with the 9th section :“The Major Result’s of Piketty’s Study.”

Lenin: State and Revolution, Chapter 5 (Part One) Review

Lenin: State and Revolution: Chapter 5 - Withering Away the State (Part One)

Thomas Riggins

Chapter 5 of State and Revolution  has a brief introduction and four sections. Lenin opens by telling us that Marx’s major discussion of the withering way of the state is to be found in his Critique of the Gotha Program. The Gotha Program was the founding document of the SPD in 1875. Although Marx wrote it in 1875, it was not published until 1891, eight years after his death.

1. Formulation of the Question by Marx

Lenin makes some very interesting comments in this section-- relevant to our understanding of socialism and the transition from capitalism in the twenty-first century. First, as opposed to those who maintained that Marx and Engels had different views on the nature of the state, i.e., that the Letter to Bebel and the Critique of the Gotha Program are incompatible, Lenin says that they were actually in complete agreement on the state. The two works dealt with different aspects of the state and it is only by misinterpreting these works that any so-called incompatibility arises. Engel's letter dealt with the issue of what the state is under capitalism and the incorrect notions held of its role after the socialist revolution. Marx was interested in discussing  the transition from socialism to communism. Marx was dealing with the evolution of communism. "The whole theory of Marx," Lenin says, is an application of the theory of evolution ... to modern capitalism." This raises a couple of interesting points. 

For instance, Herbert Spencer (1820-1903) has been criticized for trying to apply the theory of evolution to modern capitalism and developing what came to be called "Social Darwinism" (although this term was not used to describe Spencer's views until the twentieth century).  Darwin's theory is based on "natural selection" as applied to biological organisms and Social Darwinism has been attacked for making a category mistake, applying language appropriate to one group of things (e.g., biological organisms) inappropriately to a different group of things (e.g., non-biological social institutions.)

This critique basically did in Spencerism and so, it would seem, Lenin's characterization of Marxism as the theory of evolution applied to modern capitalism should also be rejected. But Lenin did not, as Spenser did, use Darwinian terminology (natural selection, survival of the fittest - coined by Spenser) when he discussed evolution. He did not see Marxism as a subdivision of Darwinism. He used the term "evolution" in a more general sense to describe systematic changes in any type of organization such that any time 2 could be understood as a result of causative factors at work at time1 for any system biological or social. Darwinism and Marxism would both be species of the genus "evolution." The terminology of one could not be mechanically applied to the other, hence Lenin did not, while Spencer did, commit a category mistake.

So, what was the question formulated by Marx? Lenin said it was, "On the basis  of what data can the future evolution of future communism be considered?" Lenin's answer is most important as it contains (although not obviously) the seeds of understanding why the twentieth-century socialist experience has been partially set back and may be temporarily in stasis.  "On the basis of the fact," Lenin wrote, "that it has its origin in capitalism, that it is the result of an action of a social force to which capitalism has given birth."

Marx and Engels had no use for thinking up Utopias based on speculations about a future society. Unfortunately Lenin uses a biological analogy-- Marx is working like a biologist studying a new organism and explaining it in terms his knowledge of other organisms out of which it developed. This is an analogy, however, and not a category mistake.

Lenin also mentions that the concept of a "people's state" was being bandied about by the SPD leadership at this time. This notion was used to justify ideas about keeping the state around under socialism. Marx thought the notion of a "people's state" was ridiculous once one understood what the role of the state was historically and that it had no function to play after the establishment of socialism. Perhaps Khrushchev's views on the USSR as a "state of the whole people" put forth at the 22nd CPSU Congress can be better understood in light of these passages from Lenin. Subsequent events seem to suggest that the concept of "a state of the whole people" was indeed ridiculous considering the actual conditions in the Soviet Union at the time.

2. Transition from Capitalism to Communism

Given Capitalism, Marxists want to end up with Communism— its negation. Marx says there will have to be a long period of transition separating these two systems. What is the role of “democracy” during the transition? Lenin says we can have “more or less complete democracy in the democratic republic.”  But under capitalism the bourgeois democratic republic puts limits on the extent of democratic rights i.e., “democracy is always bound by the narrow framework of capitalist exploitation.” Only the rich fully enjoy democratic freedom while the majority of the population  have the illusion of freedom; it is Lenin says, almost the same as it was in Ancient Greece “freedom for the slave owners.”

Marx held that the workers (“wage-slaves”) are so crushed down by debt and poverty under capitalism that “democracy is nothing to them” and “politics is nothing to them.” Lenin gives examples from his day to back up Marx’s comments. Here are some examples from our own time. Well, there has been some advance in our consciousness since Marx wrote those words (1875). Many working people have become aware of the possibilities of using the limited democratic possibilities of the capitalist state to somewhat improve their conditions of servitude. But many are still in the condition that Marx described. In the US for instance, in midterm elections such as we have in 2014, traditionally only about 40% of the voters bother to cast ballots. 

The working people and their allies have the power in this year’s election to rout the ultra right and put in place less reactionary politicians under whom it is possible to make some gains for the majority in terms of economic and social rights. We will see how well socialists, progressives, and union activists  have succeeded in making the oppressed aware of their stake in elections by the percentage of voters who go to the polls and the extent of the possible rout. I should think we have to have a greater turn out than 40% or we are doing something wrong. [UPDATE 2016: The turn out was 36.8% the lowest in 70 years -- evidence that the center-left tactics are not working: will we learn from this or just muddle along?]

Lenin, following Marx and Engels, understands that wars, human exploitation, and poverty can never be ended until capitalism itself is ended. We have to fight for real democratic change, i.e., worker’s democracy, in order for this to happen. Thus Lenin maintains that the way forward is NOT to start here where we are and fight for “greater and greater democracy”— this is the delusion of “liberal professors and petty-bourgeois opportunists” — the way forward is to fight to establish workers democracy [AKA the dictatorship of the proletariat; this particular choice of words can be debated: "worker's democracy" is a fine substitute as long as the concept is kept -- abolition of the bourgeoisie] which enacts laws that end the exploitation of working people and that deny to the capitalists democratic rights that they now presently enjoy which enable them to exploit other people. 

Lenin stresses the fact that the first REAL democracy, democracy for the poor and oppressed, democracy for the people, is also the restriction of democracy for the rich, the exploiters, the capitalists. Freedom for the 99% can be gained only by restraining the 1%. This is the only way, Lenin says, freedom can  be attained by the masses of people, by using force to destroy the power of the exploiter. This is just the way of the world. Lenin calls it “the modification of democracy during the transition period from capitalism to Communism.”  For those who are less concerned with words than the concepts behind them, the term “dictatorship of the proletariat” can be replaced by “modification of democracy,” or “worker’s democracy” without any change of meaning as long you are clear about  what Lenin thinks is the role of the state in the transition period. Once Communism is reached democracy will fade away along with the state structure itself since democracy is a concept relating to the form of a particular sort of state.

What Lenin means can be understood by examining the logic of a common progressive slogan in use today— i.e., “No Justice, No Peace.” People have an almost innate feeling for justice and fairness (although socially conditioned) and understand quite well when they are not being treated fairly. They will eventually fight back if the unfair treatment becomes too much for them. Since all class societies are based on the the ill treatment of the vast majority by a tiny minority a state is created which keeps the majority in check. Since there is no justice there are many incidences of no peace—  strikes, revolts, riots, uprisings, civil disobedience, rebellions, boycotts, civil wars, colonial wars, wars for economic dominance, demonstrations, marches, revolutions, etc. all of these are more or less calibrated to reflect the level of injustice being imposed by the ruling minority. 

A successful state must keep the majority in check and (with a few exceptions in small societies) “the greatest ferocity and savagery of suppression are required, seas of blood are required, through which mankind is marching in slavery, serfdom, and wage-labour.” With the establishment of socialism a transitional period ensues with a new kind of state, one representing the majority which puts down the exploiting majority and eliminates it as a class, enabling the creation of conditions of justice for all, and thus peace. The end of the transitional period ushers in Communism “which renders the state absolutely  unnecessary  for there is no one to be suppressed”— in the sense of a class trying to exploit others. There will of course be ornery individuals no matter what kind of society you have but they will be dealt with by the people themselves living in communal arrangements.

In the next part of this review we will deal with what Marx thought these two stages of post capitalist society would be like— without being Utopian Lenin says. We will resume with section 3 of chapter 5: “First Phase of Communist Society.”

The Three Stooges of the NYPD Police Unions Should Resign

Thomas Riggins

The heads of the three police unions in New York City are on the warpath against the head of the United Federation of Teachers because his union was in a civil rights march led by Rev. Al Sharpton on Staten Island Saturday August 23.

The March was to protest police brutality and the killing of unarmed suspects by out of control police officers -- in this case the killing of a Black man, Eric Garner, who was put in a chokehold the medical examiner declared  a homicide.

This has brought out the worse in the union leadership who have  issued inflammatory statements attacking the motives of Rev Sharpton and Michael Mulgrew,  head of the United Federation of Teachers.  It seems that these  leaders (for policemen, sergeants, and detectives) have become stooges of racism and reaction and should resign for the good of their members and the people of NYC.

 Pat Lynch, head of the Police Benevolent Association said in The New York Times (8/23): "What the Rev. Al Sharpton is trying to do is take due process from a New York police officer. Every demo with Al Sharpton becomes an anti-police rally."  Sharpton said it was NOT the police he was protesting but "a chokehold."  He also called for a federal investigation. Calling a protest against an illegal chokehold, one forbidden by the NYPD, and federal involvement is NOT trying to take away anyone's "due process." It is a bigoted stereotype of Rev. Sharpton to say that all his demos are anti-police, unless you think brutality and murder are what the police are all about. If Pat Lynch thinks his members are all about that, he should resign.

Rev. Sharpton, one of the leaders of the civil rights movement in NYC and nationally, is slandered by Pat Lynch who told The Chief (8/23), "Sharpton's goal is never to start a dialogue, or teach the community to understand police, or bring the police and the communities together. His role is always self-serving, always to stir the pot, always on the shoulders of police officers.” Sharpton is protesting brutality and Lynch is protesting Sharpton. It is obvious who doesn't want to bring the police and the communities together. Lynch should resign.

Lynch asks this about  Mulgrew and the UFT (New York Times 8/23): "How would he like it if police officers lined up with the activists who oppose his efforts to shield bad teachers and undermine effective charter schools?" This quote indicates that Lynch sees his job as shielding bad cops and undermining effective civilian control of the police. We all know that one rotten apple in the barrel will spread that rot to the other apples. The members of the PBA and the public don't need a leader of Lynch's ilk. He should resign.

I don't want to pick on Pat Lynch. His fellow stooges also need to resign. Edward D. Mullins is the leader of the Sergeants' Benevolent Association-- he claims to lead a union. He says the head of the UFT should resign, yet Mullins is a politically active Republican. It is no secret to working people that the Republican party is actively hostile to unions and to the interests of working people in general. If you want to be a Republican fine, that's your business, but don't bring your anti-working people prejudices to the fore and try and fool people into thinking you really care about the class you have sold out by working for a party of big business laborphobes.  

Mullins says "Without law and order there is no education." He accuses Mulgrew of "aligning himself with overriding the judicial system" (The Chief). The evidence is just the opposite. Mulgrew is reported as saying the march is not anti-police. He wants to bring the community and the police together. The Three Stooges however are more interested, it seems, in protecting the rotten apples than in protecting their members and the public. Mullin is the one who should resign and let a real representative of workers lead his union.

The last stooge, but not the least, is  Michael J. Palladino, leader of the Detective's Endowment Association who proclaims "The UFT is aligning themselves (sic) with extremists like Al Sharpton"  (The Chief) What civil rights leader in this country hasn't been called an extremist. We don't have to spend much time on this stooge, just remember if you believe all people should have the same rights, that the police are just as subject to the law as anyone else, and if there is no justice there will be no peace, then in Palladino's book you are an extremist. He too should resign for the good of his members and the people of New York City.

Eleanor Marx: A Life [Book Note]

Thomas Riggins

Rachel Holmes' new biography of Eleanor Marx (1855-1898) is coming out in the US early next year  and can be pre- ordered at Amazon.  Here I am posting some notes from "Troubles of Tussy" by Elaine Showalter (TLS August 22 & 29 2014). "Tussy" was the Marx family's nickname for Eleanor.

Ms. Holmes calls EM "the foremother of socialist feminism." EM was the fourth child of Karl and Jenny Marx and thus a member of the world's original set of red diaper babies. She was home schooled by her father and could quote passages from Shakespeare when she was three years old. She became a avid socialist at a young age (hanging out with Marx "one of the greatest minds in Europe" and Engels her "second father" may have unduly influenced her!) At sixteen she became her father's private secretary and he took her with him to meetings and congresses both at home and in Europe.

Eleanor also became a leading proponent of feminism. It seems that even Marx and Engels, who were champions of women's rights had difficulty putting into practice what they preached-- the nineteenth century was not noted for being very open to the rights of women.  Jenny Marx,  AKA Mrs. Karl Marx , once wrote, as quoted by Showalter,  regarding the activities of the male socialists that "in all these battles we women have to bare the hardest, i.e., pettiest parts. In the battle with the world the man gets stronger ... we sit at home and darn socks."

But EM did not stay home and darn socks. She became super-educated for her time and helped her father in the researching and writing of Das Kapital. She also organized workers and gave speeches to large crowds: "Karl Marx was the theory," Holmes says, "Eleanor Marx was the practice."

Some of her noted accomplishments: she translated the first English edition of "Madame Bovary" as well as several plays by Ibsen-- and performed the first staged reading of his "A Doll's House" playing Nora. She also translated Edward Berstein's book on Lassalle from German into English (she was, naturally, fluent in French, German and English among other languages-- Ibsen wrote in Norwegian). She also translated a history of the Paris Commune from French to English, as well as Georgi Plekhanov's Anarchism and Socialism.

Unfortunately she hooked up with a genuine cad in the form of Edward Aveling (he co-authored with her the very important Marxist work "The Women Question") ["the founding text of socialist feminism"]who, after many years of living together, secretly married a young actress of 22 [typical male menopausal action] which made her so despondent she killed herself at the age of 43. Aveling died four months later of kidney disease (aged 49). This very last action of hers was unMarxist but her biographer still thinks her life was inspiring and indeed exemplary. The reviewer concurs, writing that "With the infectious conviction of her narrative, Rachel Holmes has restored her to history." Personally, however, I don't think EM was ever lost to history.

One caveat: the portrait of Eleanor Marx at eighteen published in the TLS along with this article is actually a portrait of her sister Laura Marx (who also committed suicide!). At least it appears as such in the book Marx's General and also on the internet as Laura.

Don't Write Stupid Stuff

Thomas Riggins

While "Don't Do Stupid Stuff" may not have the cachet of "Speak softly and carry a big stick" it is nevertheless sound advice for the conduct of foreign policy, even sounder than the latter. It has more general scope as well. When it comes to writing, for instance, the constraint of "Don't write stupid stuff" would be well to implement. You could also save a lot of time if you applied the rule "Don't read stupid stuff." You can't always follow the latter because it may only be post facto that you realize the author you have read  did not comply with the former.

Here is a recent example. I have learned, as a general rule, that the oped pages of The New York Post are populated by writers who specialize in writing stupid stuff. Every once in a while, however, I check out the Post to make sure I am not over generalizing. 

I had never read a column by Andrea Peyser before I read her Post oped piece of 8 August 2014, "Al Sharpton just isn't my type." I wasn't surprised to find that it was full of really stupid stuff. Peyser says that Sharpton "is a bigot and a race-baiter who would sacrifice his most ardent fans-- people of color [a racist assumption on Peyser's part since Rev. Sharpton has many ardent fans of civil rights in all ethnic groups] in pursuit of personal fame and glory.] Her evidence? She has none. It's just her personal feelings at work. This is however the reason she gives for her statement: "it's old news." Really stupid.

She also maintains that Sharpton is "a private citizen who's been handed unprecedented influence over New York City's police by his ideological twin, Mayor Bill de Blasio" [is  the mayor also a bigoted race baiter?] What is this "unprecedented influence?" As far as I can tell the NYPD does whatever it likes and it doesn't pay much attention to what Sharpton wants it to do at all[ except for token public relations]. That is why he has to lead rallies and demonstrations to demand changes. 

Peyser thinks he has been granted this "unprecedented influence" because Mayor de Blasio invited him to be part of a round table discussion with himself and Police Commissioner William Bratton concerning the recent homicide of Eric Garner on Staten Island (July 17) allegedly  perpetrated by a member of the NYPD. Garner was killed allegedly as a result of an illegal chokehold while being arrested for selling loose cigarettes for chump change. During the discussion Sharpton told his "ideological twin"  that he would be his "worst enemy" if the police target minorities for arrest. "Unprecedented influence", "ideological twin"? Really stupid.

The real purpose in attacking Sharpton is to deflect attention from the actual issues. The medical examiner has declared Garner's death a homicide (who is going to argue with Quincy?) The NYPD has disproportionally made arrests in and harassed minority communities and is in need of more civilian control. The Post and other right-wing media prefer to attack personalities than to deal with the issues. Really stupid.

Peyser's article stems from a phone conversation she had with Sharpton a few days before in which he told her, among other things, that he did not take attacks against him personally and that someday he and Peyser might even be friends.

That olive branch was quickly brushed aside. Peyser thought he was "vain" and "obsessed" and "wants to be liked" -- "Even by me."  She says he isn't her type. Slow down Andrea. The man was just trying to be polite. He definitely doesn't go for your type. He's not really stupid. 

Piketty for Progressives 2

Thomas Riggins

“Introduction” to Capital in the Twenty-First Century— Part 2

2. Malthus, Young and the French Revolution 

This section is not particularly enlightening as it is mostly just descriptive. We are informed that Thomas Malthus (1766-1834) wrote his 1798 work "Essay on the Principle of Population" based on few sources, one of the most important of which was a travel diary that the British agronomist Arthur Young (1741-1820)  published of his trip to France (1788-89) where the extent of poverty he saw led him to fear a revolution was in the offing. Malthus was led to believe the social troubles facing Europe as a result of the French Revolution and the changing economic conditions of the day were caused by overpopulation. Too many poor people were being born and not enough food could be produced to feed them. His solution was to advocate the end of any kind of welfare aid to the poor (let nature take its course) and to discourage their procreative activities. Piketty says we cannot understand the extreme views of Malthus without understanding the role that fear played in a Europe experiencing revolution, fast economic changes, and the rapid increase of population and poverty occasioned by the Industrial Revolution. He stress that the theoretical work of the time was based on limited sources due to scanty record keeping by modern standards. 

3. Ricardo: The Principle of Scarcity 

Piketty says in retrospect we might make fun of the dark prophecies the nineteenth century  thinkers made concerning the dire consequences that the development of the class nature of capitalism and the consequent unequal distribution of wealth seemed to indicate.  He seems to think “these prophecies of doom” did not happen  but were justified by the “traumatic” changes the development of capitalism and the Industrial Revolution engendered. David Ricardo (1772-1823) and Karl Marx (1818-1883) “the two most influential economists of the nineteenth century” both had apocalyptic views of the future. Ricardo thought the wealth of society would be monopolized by the owners of land, Marx by the industrial capitalists. In this section Piketty discusses Ricardo’s views. 

Ricardo's interests were in the price and rent of land and were expressed in his 1817 book "Principles of Political Economy and Taxation." He had few statistics to work with, Piketty says, but he understood contemporary capitalism and further developed the theories of Malthus. As population grew the demand for land (for agriculture especially) would go up and so would its price and consequently the amount that could be charged as rent.  

Eventually the landowners would be getting the lion's share of the wealth expressed as income and the rest of the people would be getting less and less. Unless taxes on land were radically increased to readdress this income imbalance social stability would collapse and the spectre of the French Revolution would arise to haunt Europe. 

Piketty points out that Ricardo was wrong because of technological and industrial developments that took place after his time that diminished the role of agriculture in the economy. Nevertheless, Ricardo's views on the role of "scarcity" were insightful as they indicated that the prices of certain commodities (goods and services) could get out of hand and disrupt society, especially in the present age when the global economy is coordinated and kept in balance by an international pricing system.  "The problem is," Piketty says, "the price system knows neither limits nor morality." 

Here is a classic example of the problem of reification discussed by Marx in the first volume of Capital in the chapter on the fetishism of commodities. Something created  by human beings takes on an "independent" existence and enthralls its creators who treat it as as some kind of  self-subsistent entity whose laws we are subject to and incapable of changing or abolishing. 

Scarcity could still be a problem in our century. But there is a way to contain problems of scarcity-- namely supply and demand. Piketty says if prices get too high because of lack of supply, then people will not buy  and the demand will lessen causing the prices to fall. But what about a problem with the food supply? Not enough food, sky high prices, people can't buy-- but will the demand for food lessen? It would not. It's possible that food purveyors would end with a wholly disproportionate and unequal share of social wealth in their control.  Piketty thinks in this sort of situation a Ricardian Apocalypse is theoretically possible. However, he doesn't think it will ever come to this but will put off further consideration of this problem until later in his book where his treatment "will be more nuanced.” 

4. Marx: The Principle of Infinite Accumulation 

By the time we get to Marx in the second half of the nineteenth century (Capital Vol. I came out in 1867) the main problem was understanding how industrial capitalism actually worked and what was responsible for the immiseration of the  industrial working class [and not just it alone]—“the most striking fact of the day.”

 During this period, right up to World War I, Piketty says, the evidence indicates that there was growing income inequality with the ruling class expropriating more and more of the social wealth created and leaving less and less for the working people and others in society to share. He says this “endless inegalitarian spiral” only came to  an end due to the shocks of the World War and only these shocks could have halted the growing inequality let loose by the Industrial Revolution. [One of the biggest shocks was, incidentally, the Russian Revolution and the forces of social consciousness it unleashed on the planet— still somewhat reverberating throughout the world.] 

Piketty dates the birth of  the “first” movements of socialism and communism to the 1840s (actually there were even earlier movements dating back to at least the seventeenth century) when people began noticing that while capitalism was working for the capitalists, enriching them, the working people were not benefiting from the system and were subjected to the same kind of miserable living conditions as they had in the pre-capitalist past.  

Enter Karl Marx who sets himself the task of explaining how capitalism works and why it keeps the working people is such miserable conditions (relatively speaking). Piketty says Marx built his system (expressed in Capital ) on two principles he took from Ricardo— the principles of the price of capital and of scarcity. It is true that Marx had great respect for Ricardo but he actually rejected Ricardo’s price theory, and replaced it by his own original theory developed out of his concept of labor power and surplus value based on socially necessary labor time. I don’t see how Ricardo’s views on “scarcity” played any positive role in Marx’s system as Ricardo’s theory was developed in the context of his misconceived theories of agricultural rent. 

Pekitty also says that Marx developed a “principle of infinite accumulation” in which he showed “the inexorable tendency for capital to accumulate and become concentrated in ever fewer hands, with no natural limit to the process.” Piketty then says this is the foundation of his “prediction of an apocalyptic end to capitalism.”  Either the capitalists will fall into violent conflicts over their inability to keep accumulating (it isn’t infinite after all) OR the workers will revolt because “capital’s share of national income would increase indefinitely.” 

Yes capital must continue to accumulate to survive in Marx’s system, but there are natural limits— namely saturating the market both domestically and eventually world wide. It was these conditions that led to monopolization, colonialism, and imperialism and brought about the apocalyptic twentieth century in which the capitalists managed to set off, two world wars, ignite both the Russian and Chinese revolutions, destroy the lives of hundreds of millions of people and usher us into the present century in which they have instigated violent conflicts in Europe, Africa and Asia anyone of which could set off a more general war. The instability of capitalism is as great as it ever was and poverty is spreading everywhere (except mostly in those countries still maintaining communist governments). Therefore, Piketty’s conclusion that  “Marx’s dark prophecy came no closer to being realized than Ricardo’s” is considerably premature— the game is still afoot. 

This introduction has a strange reading, I think, of twentieth century history— it improves later in the book. He doesn’t see World One I as part of Marx’s Apocalypse but admits a communist revolution did break out in Russia “the most backward country in Europe.” However, “fortunately for their citizens” the advanced European countries “explored  other, social democratic, avenues.” I don’t know how advanced Spain and Portugal were after the war (WWI) but I don’t think Franco or Salazar qualify as social democrats, nor do Hitler, Mussolini, or Pétain. By and large I don’t think the citizens of the “advanced” countries had a very fortunate century. 

There are two other comments on Marx in this section which are unjustified. The first is that he “neglected the possibility of durable technological progress and steadily increasing productivity” as “counterweights to accumulation and concentration of private capital.” Marx did not “neglect” either technological progress or increased productivity but he saw them not as counterweights but as the results of the accumulation and concentration of capital.  

The second unjustified comment is that Marx did not devote much time to speculating about how a post capitalist society would be structured. This is meant to be seen as a failing on Marx’s part but that would be an error. Marx did not think it a good use of his time to engage in utopian speculations on the future but he did study the example of the Paris Commune of 1871 and discussed the economic and political actions that would have to be undertaken in a post capitalist society (“The Civil War in France”) and his ideas were elaborated on later by both Engels and Lenin. There is a Marxist literature on this subject to which Piketty could have referred. 

Piketty ends this section by saying Marx is still important to study and that his principle of “infinite accumulation” is still at work in the twenty-first century but not as “apocalyptic” as he thought. But this is faint praise and seems to miss the point of what accumulation is for Marx and why Marx is still important. 

Piketty says too much accumulation of wealth when population and productivity growth rates are low can lead to social disequilibrium. But Marx isn’t talking about accumulation as too much private wealth. When Marx says “Accumulate, Accumulate! That is Moses and the prophets” [Capital I c. 24, section 3] He means that the wealth accumulated is to be reinvested in production because capital must expand itself continuously or perish. By reinvesting the capital people are put to work the economy expands and more accumulation is generated to do it all over again (until a crisis due to capitalism’s contradictions.) Marx is still important because this movement of capital is still going on and still creating crises (we are in one now) and the spectre haunting Europe has not been exorcized. 

Part III of the this introduction will continue with Piketty’s section “From Marx to Kuznets, or Apocalypse to Fairy Tale.”  

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