The Prophet of Inequality

Whatever its shortcomings, Thomas Piketty’s latest book, Capital and Ideology, is a serious attempt to map our social world without resorting to easy abstractions.

Before Thomas Piketty, there was Bernard Sanders. “The American people are angry,” he declared on the Senate floor in 2012. “Angry that the middle class is collapsing because of the Wall Street-caused recession . . . angry that unemployment is sky-high, that 50 million people lack health insurance, and that working families can’t afford college for their kids.” Sanders went on to recite statistics about the skewed income distribution in a country still reeling from a severe recession.

It was another year until Piketty’s magnum opus on the dynamics of inequality in capitalist societies, Capital in the Twenty-First Century, burst onto the scene. Battles for economic redistribution found a new intellectual undergirding. But we still seem a long way from enacting such a program in practice, especially with the electoral defeats of Sanders and Jeremy Corbyn.

Piketty’s long-awaited sequel, Capital and Ideology, might help us understand why. If the goal of his first book was to describe the evolution of income and wealth inequality in the industrial countries, this new work focuses on the persistence and legitimation of such inequalities. Every capitalist society comes up with its own justification for a particular set of property rights. Piketty defines ideology rather straightforwardly as a “set of a priori plausible ideas and discourses describing how society should be structured.”

Capital and Ideology describes at length the ownership regimes in Europe’s eighteenth- and nineteenth-century “proprietarian” societies, where the sacralization of property rights was carried to extremes. The abolition of slavery may have been viewed as a crowning achievement for liberal, enlightenment values, but the slaveholders were — in perfect harmony with prevailing norms — lavishly compensated for their lost property. Haiti spent more than a century paying off its “debt” to the slavers; the West would never forgive its people for being the first nation to decolonize.

Although the French Revolution had proclaimed a formal equality of rights, the right of property was then sanctified as a new religion. Part of this consecration, Piketty argues, stemmed precisely from a lack of agreement over where redistribution might stop if it was to happen at all, and persistent fears that it might go too far. This kind of argument will sound eerily familiar to those who have followed recent attempts to obstruct progressive reforms with vague reference to “unintended consequences” and “moral hazard.”

The constant invocations of nominally socialist regimes as a bogeyman are another modern equivalent of the eighteenth century’s “thin end of the wedge” argument. One prominent example is the idea that garden-variety redistributive measures, such as publicly funded health care — which, in the United States, would amount to a transfer of income from corporate profits to wages — might lead to a Venezuelan-style outcome.

Back to Normal

However, Piketty’s main concern lies not with the inequality regime itself or its legitimacy problem, but with the development of progressive taxation. The book tells the familiar story of how the rise of marginal income-tax rates made the modern state possible. The tax haul of European states rose steadily from a modest average of 1–3 percent of national income in the centuries preceding the Industrial Revolution to 30–50 percent in the postwar era.

Progressive fiscal policies and welfare regimes stabilized capitalism by resolving the problems associated with widening inequalities. Piketty echoes other economists and historians of our time by arguing that the subsequent “neoliberal” period has simply been a case of capitalism reverting back to normal: the old regime of sacralized property rights has reasserted itself after three decades of war-induced fever dreams.

Capitalism’s default trajectory was always unequal. As the forces that had counterbalanced the proprietarian ideology either sold out or dried up — mainly social-democratic parties, who, according to Piketty, have “Brahminized” themselves into exclusively middle-class layers and are now hemorrhaging support outside of ethnic-minority working-class constituencies — the “hypercapitalism” of the last thirty years has emerged triumphant.

Piketty follows up his diagnosis with a prescription. The solution, he argues, lies in the restoration of a progressive tax regime, now at a global level, allowing for a peaceful, policy-driven transition to a kind of “participatory socialism,” in which everybody will enjoy “a universal right to education and a capital endowment, free circulation of people, and de facto virtual abolition of borders.”

But Piketty’s socialist vision goes further than this call for permanent redistribution through the tax system. His plan openly questions bourgeois property rights, and thus, it reaches well beyond the proposals of the Bernie Sanders campaign. This is — from a prominent, mainstream economist — a straightforward guide to transcending today’s capitalism.

Specters of Marx

It’s surprising, then, that most commentary on Piketty’s work from the socialist left has been dismissive — insofar as there has been any serious engagement with it at all. The most common response has been to accuse Piketty of being insufficiently Marxist, irrespective of the homages in his book titles.

However, there is a legitimate question as to how far socialists should follow Piketty. Capital and Ideology promised to correct the shortcomings of his previous work, whose quantitative focus on equality left the issue of how elites justify those inequalities unaddressed. As with his previous volume, the most impressive aspect of Piketty’s work is empirical: he brings together a medley of sources — inheritance documents, census lists, tax receipts, cadastral maps — to form massive quantitative data sets.

Some Marxist economists might complain about Piketty’s seeming inability to grasp some of the more esoteric concepts associated with their tradition. Where he plainly outclasses most of them, however, is in sheer empirical curiosity: here is a serious attempt to map our social world without resorting to easy abstractions. Piketty loves a good graph, and it’s often a joy to behold.

But data sets are ultimately no substitute for a theory of history. Too often, Capital and Ideology feels like a form of structuralism for the TED Talk age. Though Piketty has read the literature and mastered the statistics, his analysis lacks the glue needed to tie all these facts together.

There is, after all, some merit to the “Marxsplaining” criticism of the great economist’s work.

As the French philosopher Frédéric Lordon noted, Piketty is effectively “playing the Marxist” without having learned the instruments, Auto-Tuning his way into an established discourse without a proper grasp of the notes. When asked whether he had read Karl Marx’s Capital at all, Piketty replied that he found the work “too difficult.”

In the end, Piketty’s notion of capital is too rigidly economic, lacking the rich social context in which Marx embeds it, caught on the surface level of balance sheets and inheritance sums. Piketty’s methodology is quantitative, after all. Mesmerized by numbers, he barely explores the question of how certain forms of wealth differ across historical periods.

Modern Times

Even so, Marxists can learn a lot from Piketty’s work. What it lacks in synthesis, it makes up for in sheer sophistication and scope. No society is destined to be unequal, he insists. Sweden was formerly one of the most unequal countries in the Western hemisphere — only after a decades-long struggle waged by the country’s labor movement did it become an exemplar of social mobility. Inequality declined, not because of culture or nature, but through the political will to replace one dominant ideology with another.

Piketty summarizes his book’s central argument near the beginning: “Every society must attempt to answer questions about how it should be organized, usually on the basis of its own historical experience but sometimes also on the experiences of other societies.” In this context, “ideology” is a way of justifying social arrangements that might disproportionately benefit certain groups. Each society will one day have to come up with its own intellectual justification for how it is organized.

But Piketty also overstates the importance of ideology — in his sense of the term — as an explanation for the stability of modern capitalism. That stability probably owes far more to a mood of resignation, as people make peace with a world that is hostile to their flourishing. They know this world to be a product of human agency, but they cannot control it.

Our everyday relationship to markets is a perfect example of this dynamic at work. Although we know that the action of human beings is what establishes prices in a market, we can’t simply decide collectively to change those prices. We depend on markets for survival, and we have to accept them as if they were an immutable product of nature. “Ideology,” here, is not so much a matter of conscious elite manipulation as it is a fate to which we resign ourselves.

In the end, it’s easier to rationalize our own suffering than to imagine that things could be different. The Bernie Sanders campaign asked Americans to make a bet on “political revolution”: many of them found that bet too risky.

Economic WikiLeaks

Piketty himself found resignation to be an obstacle for his political endeavors in recent years. Despite Corbyn and Sanders’s best efforts, union density is still plummeting across the developed capitalist world, and a new round of quantitative easing is turbocharging inequality. In this landscape, Piketty risks becoming a political equivalent of WikiLeaks.

WikiLeaks played a courageous role, exposing the crimes that were being committed by governments all over the world: mass surveillance, extrajudicial killings, and illegal wars. Yet the public impact of such revelations was limited. In the absence of a credible social agency that could challenge the status quo, whistleblowing alone can’t rouse people out of their complacence. Sure, things may be bad, but what difference does that knowledge make if we see no way of ever improving them?

Over the last ten years, we have witnessed an explosion of empirical scholarship on inequality, driven partly by a data revolution in econometrics and increasingly digitized archives. Political movements challenging these inequalities have wielded Piketty’s data sets as intellectual weapons. But without a practical strategy and the organizational weight to bring it to fruition, these movements struggled to win the broad popular support they needed to effect change.

In the end, “inequality” becomes a problem once we’ve decided to make it one, and not a moment before. And, as Machiavelli reminds us, the only prophets to have emerged victorious were the ones who armed themselves.

End Mark

About the Author

Anton Jäger is is a doctoral student at the University of Cambridge, working on the history of populism in the United States. Together with Daniel Zamora, he is currently working on an intellectual history of basic income.

Dominik A. Leusder is an economist and writer. He is currently a graduate student at the London School of Economics.

Filed Under