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.”

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 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.”

Piketty for Progressives-- Part 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.”  

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 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.

Piketty for Progressives

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

Piketty, The Wall Street Journal, and Rational Conservatives

Piketty, The Wall Street Journal, and Rational Conservatives
Thomas Riggins

Thomas Piketty's book, Capital in the 21st Century, has almost had the effect of a tsunami on economic thinking here in the United States after its translation from French into English washed up on our monoglot shores. In France itself it has been treated as more or less just another economics book-- no big deal.

Its impact on the US is due to many factors, not least of which is the fact that our educational system is woefully inadequate by European standards as well as our lower cultural literacy compared to Europe. Piketty's work appears here as a revelation, but to the educated European he is only providing a fuller historical context for what most people already understand.

Marxists, especially, should have been under whelmed to learn that the capitalist system creates imbalances in wealth with a large pool of poor and exploited workers at one pole and a small group of capitalists hogging the social wealth at the other.

Piketty tells us this system is not sustainable and to prevent the "Marxist Apocalypse" the capitalists have to modify their behavior and moderate the social inequalities their system creates. The thought that capitalism might be replaced is indeed an apocalyptic nightmare for the bourgeoisie but for the working classes it might be more like a Marxist Epiphany come true.

The Wall Street Journal, no friend to the Left, has reviewed Piketty's book ("A Not-So-Radical French Thinker" by Pascal-Emmanuel Gobry, weekend edition May 24-25, 2014). Here we find, implicitly, that not only have some on the Left "lost it" over seeing Peketty as some sort of super progressive, but that many American "conservatives" have, explicitly, also gone completely off the deep end by referring to Piketty as a "soft Marxist."

The conservative movement is the U.S. is, however, overloaded with "thinkers" who are intellectually immature and dishonest, selling their brain power (such as it is) to the Koch brothers, the Murdochs, and their ilk. The WSJ review points out that Piketty is a professional academic economist and his book merits consideration. He is a neo-liberal economist who supports market capitalism and, like many other neo-liberals, he advocates "government redistribution to smooth out some of the market's excesses.".

The WSJ points out that in France you can find "honest-to-goodness actual Marxists [that] are still at large" and Piketty is not one of them. The fact that he has simply described how capitalism is actually functioning and this is enough to send so called conservative intellectuals into a nose dive (one from the American Enterprise Institute is especially mentioned) over "soft Marxism"  is evidence enough that many, I think most, conservatives have no regard at all for the facts or even rational discussion but are only mouth pieces for the corporate interests who support them as paid propagandists.

Piketty is worth reading. Marxists have a deeper understanding, I think, about the functioning of the capitalist system so there will be no surprises here, but readers will find a detailed history of wealth distribution and creation over the last three hundred years that will convince anyone with an open mind that this system is exploitative and is leading towards an implosion that could very well destroy it.

Marxists, of course, think the system must be replaced and is ultimately existentially unreformable. Neo-liberals such as Piketty do not agree and he proposes reforms in his book which he thinks will save the sinking ship (such as an international, or at least a European Union, wealth tax).

The WSJ review suggests that the right wing could benefit from reading Piketty. If the inequality he describes is not remedied "it could undermine the social order" and "for all the huffing and puffing about Mr. Piketty's supposedly revolutionary ideas, that conservative insight might be his most lasting contribution to the American debate." Indeed, it well might.