The Economist on Piketty May 6, 2014
Posted by Tomboktu in Books, Capitalism, Economics, Inequality, Journalism, Marxism, Taxation Policy, The political discourse, The Right.trackback
I bought the Economist because the cover said it has an article about Piketty. (Reading articles about his book, Capital in the Twenty-first Century, is quicker than reading the book!)
The headline on the actual article is weird: “Bigger than Marx”. That is true neither of the physical heft of the book nor, if everything I have read about it so far is valid, of the contents.
And then the content of the Economist’s review: 13 paragraphs: two are neutral; four approving; seven critical of the book. The Economist cites five critics of his thesis or aspects of it and zero supporters.
Not that I’m terribly surprised at their overall view, but they might have been subtler. Or maybe I should applaud their transparency.
The Cedar Lounge Revolution 
I’ve carefully gone through his theses and I have to say that I am surprisingly well-disposed to what he proposes. I’d go further and say that if we follow his prescriptions, we will a create a fair and equitable society where … from each according to his or her ability to each according to his or her needs… that kind of thing.
AND NOW FOR THE PUNCHLINE.
Yes, if we do what he suggests then everything will be just Piketty boo.
I WILL GET MY COAT.
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The Piketty book is the most important progressive text on capitalism which has appeared for decades. His conclusions are tough and very challenging for the left – so much of which has made its peace with capitalism or retreated to a blinkered nationalism.
Needless to say I particularly agree with his conclusions on beginning with the European Union to secure the introduction of what eventually must become a world wide tax on capital. His incredibly well researched conclusions may not mirror the narrow orthodoxy of the French Trotskyist Lutte Ouvriere (in which his parents were militants) but they have stunned and frightened the ideological enemies of the left and should boost the confidence of socialists
everywhere. From the mountain of data his book provides, one figure struck me like a hammer blow: between 2010 and 2012, no less than 98.5 per cent of increased income in the United States went to just one per cent of the population.
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I agree with you on all this except for the point about the European Union. For it’s difficult to see how one could obtain unilateral agreement on tax harmonisation of any kind (my understanding is that this area is still subject to a national veto), let alone a sweeping pan-continental capital tax. Someone would need to convince the ultra-liberal Balts, the Brits, and the likes of Noonan and Bruton in this country that this was the right thing to do. And that is a very fat chance indeed!
Ironically, the country best-placed to adopt egalitarian tax policies is the US and maybe the massive interest over there will have some impact in the long run. Ideas have an impact; as Keynes put it: “The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”
All this raises the question of whether there is any way the policies proposed by Piketty can be pursued by smaller individual nations and at what cost. Would an egalitarian siege economy be preferable to an inegalitarian open one? The former option may not represent the best of all possible worlds but, in absence of any international consensus, maybe it would be preferable.
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That is a compelling question Pasinario. I’m also wondering if individuals and/or small groups can somehow opt out of the current miasma?
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Well there have always been communes and autonomous spaces. Capitalism is robust enough to tolerate them because they don’t seem have much of an effect on wider society.
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There is a memorable passage on this theme at the end of Alisdair MacIntyre’s After Virtue — something about how we need a mixture of Trotsky’s lucidity and Saint Benedict’s passion to construct a new moral order on the margins on society at large (which he considers unreformable). I find MacIntyre’s shift from the Socialist Workers’ Party to the Tridentine mass to be bewildering but he’s an extremely powerful writer nonetheless.
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Anyone with a further interest in Piketty interviews should note there’s one on the New Republic site. Not great to be honest but it’s interesting that he professes to have little interest in or knowledge of Marx.
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Tom Palley has a review here.
“There is little attention to issues of economic institutions and structures of economic power because these are not part of the neoclassical framework. That substantially explains progressive economists’ diffident embrace of the book. Furthermore, even if technically feasible, Piketty’s tax prescriptions are politically naïve given capital increasingly controls the political process.”
http://mrzine.monthlyreview.org/2014/palley240414.html
And Krugman’s response here.
http://krugman.blogs.nytimes.com/2014/04/24/on-gattopardo-economics/?_php=true&_type=blogs&_r=0
What Palley, Krugman and Piketty fail to grasp is that neoclassical marginal productivity theory, used by Piketty, was developed by John Bates Clark, for ideological reasons,-to counteract institutional and marxist analysis of growing income inequality. This irony lies at the heart of Piketty’s effort.
Palley makes reference to Lampedusa’s ‘The Leopard’, in which the main character says: ‘In order for things to remain the same, things must change’. This reactionary strategy explains the rise and fall of social democracy; for a relatively brief period in the history of capitalism, a conjuncture of circumstances necessitated that capital make concessions to labour and attenuate capitalism’s long-term tendency towards inequality. These circumstances,-the Great Depression, and subsequent reform efforts, 2 world wars and their aftermath, a militant labour movement putting pressure on social democratic parties, the existence of the soviet union as perhaps an alternative-no longer exist.
A sustained ideological and political offensive has resulted in the triumphant hegemony of neoliberalism. The gains of social democracy in the de-commodification of labour power are being constantly rolled back.
The inequality engendered by capitalism has given the capitalist class control of political economy. Really existing capital has the power to prevent the progressive tax reforms proposed by Piketty.
So many reviews, so little time to read the book….
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Interesting review by Robert Skidelsky in the current issue of the New York Review of Books of a what sounds like an important book called Mindless by Simon Head which examines the current ruling corporate paradigm in the likes of Amazon and Wal Mart and sees it as an industrial version of Bentham’s Panopticon among other things. The argument appears to be that increasingly sophisticated technology is lessening the number of jobs which require any human input from workers, they are instead effectively functioning as robots. Computer technology has enabled the perfection of Taylorist surveys of productivity.
He points out the advantage this gives a country like China where governmental control over workers is much greater than it is in most Western democracies. (Our native neo-liberals can talk all they want about reducing costs for multi-nationals but this is a race to the bottom and one we can never win.)
It strikes me you could call this development, ‘The Road To Serfdom.’ Anyway, I must get hold of the book, it sounds very interesting.
I’ve always felt that a line had been crossed when instead of a few people at reception in newspaper offices and the like who had time to say hello to you and ask what you want, you had a single person, plugged into a console who could only signal to you that they were juggling various calls. This seemed to happen round the end of the nineties and was a glimpse of the future.
Incidentally I didn’t realise until reading this that academic life in England to a certain degree has to conform to this model with quite arbitrary targets being set, funding being conditional on their fulfilment.
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Incidentally I didn’t realise until reading this that academic life in England to a certain degree has to conform to this model with quite arbitrary targets being set, funding being conditional on their fulfilment.
*Waves*
It is very like that indeed. It is possible to maintain some humane values in the little niches, but the model for managing academics is increasingly becoming that of setting numerical targets and pretending they mean something.
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‘ A World Ruled by Number’-Margaret Schabas
http://press.princeton.edu/titles/4727.html
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Skidelsky’s review of Head is in a previous issue, not the current.
http://www.skidelskyr.com/site/article/the-programmed-prospect-before-us/
The current issue of the NYRB has a review by Krugman of…Piketty.
http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/
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It was current when I bought it you ould stickler you.
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*also waves*
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+1
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I suppose it had to happen. Not only are we in a post-modern, post-nationalist, post-colonial, and post-imperialist period, but now also we’re in a post-current one.
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Is it the same here?
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Is it the same currently or post-currently?
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I’ve a vague hunch that this is part of a much wider process of what might be termed ‘algorithmisation’, and it includes the trend towards government by unelected technocrats, in those parts of the capitalist world that have pretensions towards a smidgeon of representative democracy.
The algorithm, once culturally embedded and given value, becomes that to which there is no alternative.
Or it might just be an updating of that old Frankfurt school ‘instrumental rationality’.
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To go off on a tangent I wonder if this updated Taylorism has also bled into the culture. Hence the plethora of list programmes and articles and those 1001 somethings to do before you die books. The notion being that there is a specific list of books, for example, which you can consume to educate yourself instead of doing this by your own reading. And then there’s the fact that more and more newspaper articles are along the lines of, “five reasons Shatter had to go,” or “seven things we learned from last night’s match.” It’s the false belief that everything can be tabulated.
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Did you ever read Jean-Marie Brohm?
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No. Though perhaps I should have. I meant to write something on the Marc Perelman sports book last year. Is Brohm along the same lines?
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Dunno – I’ve not read Perelman, although judging by this review I probably should. Brohm is quite dated, but very strong on sport basically being about measurment for the point of measurement, things that have no purpose in and of themselves. (Not that this stops me enjoying sport, but it’s something worth thinking about.) And one can’t help but notice how much, in an increasingly free-market society, the language, rhetoric and methods of sport become prominent in all sorts of places where they don’t belong, as if the whole of society was actually becoming sport.
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Your last point is very interesting. I know what you mean, as someone who’s been a sports fan all his life I nevertheless find the current obsession with sport slightly weird. As my brother says, “Remember when only people who were interested in sport were interested in sport.” Whereas now it seems like a badge of identity. Can never understand lads who didn’t play or watch sport at all as youngsters suddenly developing a love for the five a side game after work and the watching the game in the pub Sky Sports outing with their ‘mates.’
Not that pubs are a great barometer of anything but I recall that back in the eighties and nineties most good pub arguments revolved around politics. Now it’s sport ad nauseam.
A phenomenon I’ve noticed is that there seems to be a growing imbalance in attendance at theatre, musicals, even movies. Loads of young women and not many men. I suspect a lot of lads who’d actually prefer to be in the Abbey have been forced into trooping alongo to watch the ‘footy’ on TV, a suspicion reinforced by the fact that when you listen to many of these Sky devotees they sound a lot like this gent.
I’ll get the Brohm. Thanks ejh. What kind of specific examples did you have in mind. I ask for no other reason than to impress my brother by pretending I thought of them myself.
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What kind of specific examples did you have in mind
About society becoming sport? Well, I guesss you have things like school league tables, but I don’t necessarily mean anything so direct. I suppose it first struck me when Clive Woodward started doing all sorts of City of London seminars. All right, that’s City boys for you, we may think but the weird thing (to me) was how many people didn’t seem to think it odd, as if Woodward wasn’t just a rugby union coach of no small stature but Success Man.
This was about the point when it became impossible to distinguish the sports news from the actual news, because the news people would be obliged to feign interest in what the sports person had to say and to ask them lead-in questions, but again, that’s not necessarily what I mean – it’s much more about how what we used to think of as motivational quackery began being widely acceptd at face value, because of course we’re all competing with one another and trying to succeed. And what I’m really trying to say is that every time somebody reads about a school’s marketing manager and instead of thinking “do what?” they don’t think anything, because of course they have marketing managers, that’s the sort of thing I mean, because that’s when the values of society start becoming indistinguishable from those of sport.
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I was having a conversation about this sort of thing with a friend the other week while watching the Liverpool-Chelsea game in a pub near Finsbury Park (and FWIW, I never agree with my friends who follow League of Ireland clubs that it’s all a sham if you only watch it on the telly; a different experience alright, less intimate to be sure, but how many of us saw Pele or Maradona in the flesh?) When it comes to English football, I’d consider myself a medium-intensity fan at most; my interest has ebbed and flowed since getting started in the early 90s, but never dropped off altogether; I enjoy watching games, but I think most of the hype around the Premier League is laughable, and I rarely get too excited or depressed about the outcome (an attitude that has stood me in good stead as a Liverpool fan this past fortnight). Music has always meant a lot more to me and I’d much rather have a conversation about that than football. That C.L.R James line about cricket comes to mind; I don’t think I’ve ever had an interesting conversation about sport unless it was with a person who could easily hold a conversation about something else if they wanted to.
Anyway, the gist of what I was saying was that my attitude, far from being a contemptible, fair-weather sort of a thing, is actually much truer to the spirit of football nowadays—which is basically an entertainment product—than the Shankly-quoting bores (not that Shankly himself was a bore, but you know what I mean). While I was saying this, we were rolling our eyes at a Scouse Liverpool fan and an African Chelsea fan who were competing to offer the most histrionic performance, yelling, banging fists on the table, getting down on their knees, kicking walls and so on (my friend is a mental health nurse and was tut-tutting at them for narcissistic acting-out and general shite-hawkery).
BTW, I had a glance through the ‘Barbaric Sport’ book, and while I sympathize with his dislike of FIFA, the IOC etc., it seemed a bit too rooted in the kind of haughty left-wing intellectualism that slides into cultural snobbery very easily. When leftists give out about sport, for the most part I think they’re giving out about sport being exploited by capitalism or nationalism or both, which is fine, but if sport didn’t exist, capitalism and nationalism would find something else to bend to their purposes. God knows they use every other damn thing that’s of any value or interest.
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Wow – is there a critical theory as opposed to a sociology of sport?
If not you academics have missed a gap in the market.
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But who does the “sophisticated” technology serve? And is the architecture of the technology configured in such a manner that it drives a narrative of work and labour in a uni-directional manner?
Modern (post; post-post; not yet a glimmer in the sexy eye aperature) information/robotic technology may be viewed as nothing more than an extension of the machine age, whereby the expertise of the artisan is replaced by capital and the tedium of mindless repetition – where pushing paper becomes more attractive than work since work has been reduced to meaningless drudge.
I would also like to suggest that the powers-that-be want to ensure that a certain proportion of the proletariat cannot access the “modernest” technology – hence another use for austerity and workerless factories. Those who then have to endure the another level of mindless control by capital will at least feel they are better than the skanger-proletariat below them.
Queen to King’s castle something or other – TINA!
Or does Ludditism begin to sound like a lifestyle for some of us?
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Queen to King’s castle something or other
Eh?
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Checkmate!
In reference to CL’s comment above as well, it’s remarkable the ability those on the left have to theorise their own futility. Not that I necessarily disagree, only that a more optimistic analysis might take into account the contingency of history and the potential for new movements or factors to emerge unobserved.
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Why? Doesn’t Ludditism provide contingency or potential? It can be argued that Marx and Engels, among many other economic theorists, suggest that following a linear narrative which implicity states that every technological innovation is inherently benefical is often far from optimal for many sections of society. Further to the point, it can be argued that technical innovations have been used by capitalists to re-order society, infrastructure and politics to suit their needs while at the same time hyping the technical innovation narrative as always lending itself to a progression narrative whereby innovation leads to inevitable accumulation, plus social and ecological degradation as by products. It is natural and therefore unstoppable. It just happens that a tie-up between innovation and capital accumulation is a happy coincidence – or so we’re told from an early age.
It can be interpreted, and is often just accepted, as part of the modern narrative that every so-called innovation, technical or otherwise, has a progressive pedigree and therefore cannot be rendered from a different viewpoint. It has become part and parcel of the TINA narrative.
What you call futility might be an alternative and provide possible opportunities to others. Dispensing with optimism or satisfying alternative outcomes doesn’t automatically lead to futility. Nihilism isn’t the only antidote to happy Capital stories. Or Socialist ones for that matter.
Sometimes is just worthwhile to play a different game or change the rules of the existing game. Or stop playing the games altogether. There’s always alternatives – just that sometimes their palatability is merely in that one stops providing the owners of games with pawns.
best
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one stops providing the owners of games with pawns
Eh?
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Obviously an important book. I am wary of condemning it as some do because he does not automatically agree with Marx. Review here http://socialistresistance.org/6177/capital-by-thomas-piketty-a-review-by-eric-toussaint and here http://michael-hudson.com/2014/04/pikettys-wealth-gap-wake-up/
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The impression I have from various reviews is that he is complementary to Marx, who talks about production rather than income or consumption. I’m a bit worried about this though:
In the books of Marx there’s no data.
http://www.newrepublic.com/article/117655/thomas-piketty-interview-economist-discusses-his-distaste-marx
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Sort of related – I think, haven’t read the Piketty book – is Costas Lapavitsas’ Profiting without Producing, which i ploughed through last week. Tough enough if you’re not that economically literate but worth the effort. Makes a strong, and identifiably Marxian case for understanding financialisation, not as capitalism 4.0 or whatever, but as deeply and historically imbricated with accumulation through production. Strong also on the euro disaster and why the periphery suffered as we did. And on the special pain of financialisation in the ‘developing’ world.
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I’ve just entered the kindle world and got Piketty’s as one of the new books. Very engagingly written I must say. Only a few pages in so far so not so much meat on the bones but I think a very accessible book and if you want to change mindsets then not a bad tool at all. Yes some might feel that its too social democrat and I suspect that criticism is not going to be unfair at all but I think if you weight up the trade offs its not the worst approach to reverse the flow of liberalism.
By the way kindle for 60 euro is a fantastic investment. I’ve down loaded several books at very low prices and economically it will pay itself off in quick order and also facilitate me reading with greater ease a good thing but part of me still misses the feel of paper in hand.
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By the way kindle for 60 euro is a fantastic investment. I’ve down loaded several books at very low prices and economically it will pay itself off in quick order and also facilitate me reading with greater ease a good thing but part of me still misses the feel of paper in hand.
Plus books can’t be retroactively withdrawn from circulation, as Amazon have done in the past when the publishers have declined to come to heel for this modern monopolist.
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And Amazon (who hosts
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…. whoops…to continue….
… who gets paid 600 M$ pa by the CIA to host some of their IT infrastructure knows just what you buy and even how often you read it, and how far you’ve got.
They’ll file a report to the usual suspects if you don’t finish it, and you’ll be given detention!
Other ePub readers are available and the wonderful Calibre allows you to extract any Kindle books you may have bought (yes I did – mea culpa), and read them without big brother recording your reading habits.
I have an ePub reader with the same screen as the Kindle from Thalia in Germany, and frankly find the screen uncomfortably small – but it’s usable, providing the book doesn’t have diagrams or illustrations.
To my knowledge there is no digital equivalent to Abe Books – a marketplace for small secondhand booksellers – the lobbying of Amazon has seen to that!
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WBS etc. – would it be worth asking someone to review the Piketty book for the site? (I’m not volunteering – far too much marking to do)
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There’s a short review by Morgan Kelly in the IT. He praises Piketty’s analysis of contemporary trends in inequality, but criticises the longer-term view as being historically inaccurate, at least as far as the nineteenth century goes:
‘Although the central concern of the book is that western society will return to this world centred on inherited wealth, beyond synopses of Mansfield Park and Père Goriot Piketty is pretty vague about the olden days, in particular how inequality changed in the 19th century.’
http://www.irishtimes.com/culture/books/how-the-rich-got-richer-capital-in-the-twenty-first-century-by-thomas-piketty-1.1786787
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Eh you just taking the pish?
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For Marx capital was “the power that capital gave to capitalists, namely the authority to make decisions and to extract surplus from the worker.”
” neoclassical economics dumped this social and political analysis for a mechanical one.”
Piketty, ” explicitly (and rather caustically) rejects the Marxist view. He is in some respects a skeptic of modern mainstream economics, but he sees capital (in principle) as an agglomeration of physical objects, in line with the neoclassical theory. ” James Galbraith.
The neoclassical marginal productivity theory of distribution was developed by John Bates Clark with the ideological purpose of countering the social and political analysis of Marx and the institutionalists
Piketty dismisses Marx and is using a neoclassical marginal productivity framework. His effort must be treated with some skepticism.
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I haven’t read Picketty’s work …yet but if he doesn’t fit into some Marxist box-ticking exercise….so what? If his work can be used to raise consciousness-good. If his work gets inequality into the mainstream media-good. If his work can be used as weapon, however imperfect, against unbridled capitalism-good.
I’m no Marxist- I do not see the steam engine and the consequent concentration of industrial production as the ultimate factor in human history. Proudhon’s faith in the self-governing workshop and Kropotkin’s concern with decentralisation of production and its combination with horticulture speak to me much,much more.
It’s the latter tradition which corresponds more closely to the actual experience of our grandparents and of our grandchidlren.
The left can’t afford to be refrigerated into authoritarian collectivist attitudes that belong to the past.
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(reply to fergal), I just think its a good idea to be skeptical of any study which uses neoclassical economics,-the pseudo-scientific legitimation of capitalism,-as its conceptual framework.
As for Marxism and steam engines… well its all been said before:
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I’m calling bullshit on using Utah Phillips in defense of Marx. In fact I would say that the wobbly tradition is closer to what fergal describes.pragmatism over defense of orthodox conceptual framework.
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to yourcousin. I’m certainly not defending any conceptual framework, either neoclassical or marxist. And James Connolly was a Marxist, and a Wobbly.
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My history is rusty on this one but I believe Connolly split with the IWW after his return to Ireland and feud with Deleon. I would say the IWW would embrace Picketty’s text based upon its thesis that inequality is inherent in the capitalist system, not a byproduct of rigging the game so to speak. Though no one I know has really said anything other than, ” I could of told ’em that”. I would also argue that the way that Connolly and those of his ilk understood socialism and Marxism would be infused with such a syndicalist tint that it would be utterly alien to most Socialists today. And again citing people doesn’t inherently prove an argument, regardless of whether it was Connolly, Lincoln, or MLK.
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“the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.”-George Will
http://www.newsweek.com/will-why-liberals-love-trains-68597
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CL- anybody who can include a Utah Phillips clip in a reply has to be sound, the good old wobblies 🙂
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“In reference to CL’s comment above as well, it’s remarkable the ability those on the left have to theorise their own futility. Not that I necessarily disagree, only that a more optimistic analysis might take into account the contingency of history and the potential for new movements or factors to emerge unobserved.” Hardcorefornerds, comment above in 7.
Well I was just paraphrasing Piketty, not theorizing.
In one of the first reviews of Piketty some months ago, the reviewer refers to the same Piketty argument
” the six-decade period of growing equality in western nations – starting roughly with the onset of World War I and extending into the early 1970s – was unique and highly unlikely to be repeated. That period, Piketty suggests, represented an exception to the more deeply rooted pattern of growing inequality.” -Thomas Edsall.
In other words social democracy was an interlude.
And what’s left of it continues to be destroyed. Witness Burton’s Thatcherite ‘welfare reforms’.
Certainly there’s always potential for new movements etc.
Since Edsall’s review in the NYT, several months ago now, a longue durée of reviews threatens to continue into the indefinite future. Personally, I’m waiting for Dan O’Brien’s before making up my mind.
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Never mind the Economist On Piketty; Chairman Ganley has a whole column On Piketty in today’s SBP. Needless to say he is not convinced.
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A review which might be of more interest given that it comes from a Left point of view is Doug Henshaw’s in Bookforum. Henshaw has published books with both Pluto and Verso and this struck me as a very well written review which seemed to have a slightly different emphasis from the other ones I’d read. Bookforum is always an excellent read by the way.
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EC, I hate to be picky. I know a hawk form a Henshaw, but you probably mean Doug Henwood.
http://www.bookforum.com/inprint/021_01/12987
” Several times, Piketty disavows Marx—just a few lines later he credits “economic growth and the diffusion of knowledge” for allowing us to avoid “the Marxist apocalypse”—but he also concedes that those prophylactics have not changed capitalism’s deep structures and the tendency for wealth to concentrate. It seems, in other words, that Piketty’s own research shows that the old nineteenth-century gloomster had a point….
serious trouble—demonstrations, strikes, insurgent political movements—is what it will take to derail capitalism’s inevitable tendency toward concentration. Short of that, it looks like we’ll be continuing our journey along the road to a new serfdom.”-Doug Henwood.
‘
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I find it hard to get this guy out of my head.
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