Capital and Ideology by Thomas Piketty review – down the rabbit hole of bright abstractions

Capital and Ideology by Thomas Piketty review – down the rabbit hole of bright abstractions

This article is originally published on The guardian on Sun 1 Mar 2020 on:

To bring a book into the world with 1,065 pages, there has to be a good reason. Thomas Piketty’s reason is that without a detailed account of the ideologies that have sustained inequality in the past, we cannot understand its present form, or how to overcome it.

So Capital and Ideology takes us on a historical grand tour of the hypocrisy of elites, ranging from the punishments meted out to slaves in Mesopotamia to the cruelty of the Belle Époque, which, as French economist Piketty points out, was belle only for a small number of white men.

But the main focus of the book is the present, which is marked by extreme and rising inequality, alongside the breakdown of traditional, class-based politics. The social coalition that drove redistribution in the mid-20th century has disappeared. If we don’t do something radical to reduce inequality, Piketty argues, “xenophobic populism could well triumph at the ballot box and initiate changes that will destroy the global, hypercapitalist digital economy”.

Piketty’s 2014 book Capital in the 21st Century showed how inequality is baked into our current economic model. In a free-market economy, he argues, inequality inevitably rises faster than growth. And as the incomes of the rich become reliant more on asset wealth than salaries, the old forms of redistribution, based on income tax and corporation tax, cease to work.

In this book, Piketty outlines his solution: a “participatory socialism” in which capitalism is gradually abolished via a progressive income tax and a tax on inherited wealth, which are used to finance both a basic income and a “capital endowment” for every citizen.

In a single table, Piketty demonstrates that, in the abstract, it would be possible to finance a radically egalitarian economy if both income tax and inheritance tax for the rich were set around 60-70%. The outcome would be to “make ownership of capital temporary”. Meanwhile, by legislating to enforce power-sharing within firms, between workers and bosses, you could achieve the “true social ownership of capital”.

The problem, of course, is the resistance of the current elites: the phalanx of Super Pacs in the US, the Brahmin-like permanence of the European centrists, the extreme concentration of power alongside wealth, the evisceration of democracy, the culture of secrecy around the taxes paid by rich people and corporations.

It’s a resistance bolstered by the ideology of what he calls “hypercapitalism”: our willingness to believe billionaires have earned their money, that their philanthropy offsets their greed, that most of the poor are “undeserving”, and that any tinkering with the present distribution of wealth will lead to economic collapse.

As the book demonstrates, the task is further complicated by the breakdown of left-right politics. Piketty makes the case that most electorates are now fractured into four parts: the globalist camp is split between egalitarians and anti-egalitarians, but so is the nativist camp. As a result, any movement for economic equality has to include nativists and globalists, who, as the UK general election showed, currently hate each other’s guts.

If there is a case for optimism in this book, it relies on the incoherence of the hypercapitalist ideology, which promises social mobility to the poorest 50% but repeatedly dumps them at the bottom of the pile.

For Piketty, the history of ideologies is autonomous from that of the societies they have been used to justify. Unlike Marx, who wrote that all history “is the history of class struggles”, Piketty believes it is “the history of the struggle of ideologies and the quest for justice”. For the avoidance of doubt, Piketty does not say – as French structuralists did – that ideology is relatively autonomous from the economy: instead he says “the realm of ideas, the political-ideological sphere, is truly autonomous”.

Piketty’s socialism, then, is not just a socialism without the working class. It is a socialism without class struggle, or the need for class struggle. As a result, the intellectual and moral rearmament the left must undergo has to arise out of academia, or the world of thinktanks and NGOs. As for ideologies, they are, in Piketty’s historical scheme, almost never busted open from below, but simply destined to lose their coherence from within.

As he recounts the history of the transition from slave-owning, feudal and colonial societies towards 19th-century modernity, the most consistent actor in the name of progress is the state. By the end of the book, while we have a detailed description of the correlation between forms of inequality and the ideologies used to justify them, there is not a trace of cause and effect. Facts, Piketty states, are untrustworthy because they themselves are socially constructed.

It is as if Piketty, a commanding figure in the economics department, has sauntered across to give a (very long) lecture series in the history department without bothering to engage in the methodological debates that rage there. But his implicit method is that of the Enlightenment philosopher Georg Hegel: human progress exists, the state is nearly always its main actor, and history is driven by supra-historical ideas – above all, the idea of justice.

And that’s what makes his political solutions seem so abstract and unworkable. What happens to the value-creation process in a world where the rich are getting their wealth confiscated and their incomes flattened (ie the actual problem that destroyed the Soviet experiment)? How do you revive the actual democracies we are fighting in other than by giving every citizen a “democracy voucher” to even out political spending by the elite? By the time we get to page 1,027, and Piketty’s design for a world government, we are well and truly down the rabbit hole of bright abstractions.

As for the most pressing problem – how to deal with the rise of nativism and xenophobia among the communities that once voted left – Piketty’s solutions are perfunctory. He rightly slates the French left for becoming “Brahmins” – exclusive representatives of the educated class – and calls for left parties to be less elitist and less hostile to the self-employed.

But electoral experience – in the UK, the US and France – shows that right-voting workers are strongly wedded to inequality. As Labour found out in December 2019, pledging to tax the rich without mobilising those voters with a narrative of self-liberation can backfire. Only recently, a survey of “red wall” seats found they want “modest tax hikes to make the system fairer but outright reject attempts to take money from the modestly well-off and even from billionaires”.

Piketty is right to say that, in moments of transformation, big ideas come first. His big idea is to tax capitalism out of existence, and it has triggered an avalanche of derision among the Davos-going crowd. My objection is not that it is too radical but, lacking any explanation of which social forces might enact it, not radical enough.

Paul Mason is a writer and broadcaster on economics and social justice

• Capital and Ideology by Thomas Piketty is published by Harvard University Press

Share this post

Start typing and press Enter to search

Shopping Cart