Piketty’s new book on economic inequality

The French economist Thomas Piketty made a big splash with Capital in the 21st Century (published 2013, translated into English 2014).  He showed why, all other things being equal, the rich will get richer and the rest of us will get less.

In different countries in different historical periods, the rate of return on income-producing property exceeded the rate of economic growth.  This was true whether the income-producing property was real estate, government bonds, corporate stocks or something else.

What this meant was that, in the absence of revolution, war or something else that wiped out the value of their assets, the rich would get richer and everybody else would be left behind.

Piketty’s new book, CAPITAL AND IDEOLOGY  (published 2019, translated 2020), is more ambitious and complicated.  He thinks it is an even better book that its predecessor and I agree.  It is a great work.

He looked at all the forms that economic inequality has taken in the past few centuries and all the different ways that inequality has been rationalized.  While his earlier book was based mainly on data from France, Great Britain and the United States, the new book tries to be global in scope.

He said it is important to understand not only the forms of economic inequality, but the reasons why people accept them.

His book covers several kinds of “inequality regimes”:

• “Ternary” societies in which most wealth is controlled by hereditary kings and aristocrats and an established church or religious institution.
• “Ownership” societies in which property ownership is regarded as a sacred right, superseding everything else.
• Slave and colonial societies.
• “Social democratic” societies, which limit the rights of property owners.
• The hyper-capitalism of today, which is a backlash against social democracy and Communism.

The degree of inequality in any nation or society is not the result of impersonal economic law, he wrote; it is the result of choices that could have been different.  History does not consist of class struggles; it consists of a struggle of ideas and a struggle for justice.

To understand inequality, he wrote, it is necessary to understand the reasons for choices at various “switch points” of history—the French Revolution, the British constitutional crisis of 1911, privatization in Russia after the fall of Communism.

Piketty sees no justification for the degree of inequality that existed in most periods in the past or exists today.

Thomas Piketty

“To the extent that income and wealth inequalities are the result of different aspirations and distinct life choices or permit improvement of the standard of living and expansion of the opportunities available to the disadvantaged, they may be considered just,” he wrote.

“But this must be demonstrated, not assumed, and this argument cannot be invoked to justify any degree of inequality whatsoever.”

He concluded Capital and Ideology with a detailed program for reducing inequality, based on changes in taxation, corporate governance, affirmative action in higher education and international trade policy.

I think the value of his two books is in the extensive research and vast amount of data they represent.  I learned a lot from reading both of them.

I have a fair amount of knowledge about the USA, my own country.  The most valuable thing for me about Piketty’s book for me is his international and historical perspective—the different kinds of wealthy elites, the conflict of the “merchant right” and “Brahmin left,” the rise of left-wing and right-wing populism (although Piketty rejects the word “populism.”)

Critics question details of his research.  I’m not able to judge that.  It is inherently difficult to compare data on different historical periods and different nations that is gathered in different ways.  But unless his figures are off by orders of magnitude (factors of 10), I think his conclusions hold up well.

Some of his policy proposals are questionable, but they are a good starting point for discussion.  As Piketty said of the Forbes lists of the world’s richest people, they may be flawed, but they have “the merit of existing.”

Piketty’s Capital in the 21st Century  is 577 pages long, not counting end-notes.  Many scholars and commentators found it difficult to get through. Capital and Ideology is 1,041 pages.   It is not over-written.  Each of its 17 chapters is like a condensation of a full-length book.

If you lack the stamina or desire to plough through the whole text, I recommend you obtain a copy in a public library, or in a bookstore that lets you sit down, and read the introductory chapter. which is 47 pages long and covers the main points.  Then leaf through the book and look at the charts.

Or read forthcoming posts on my web log.

Interviews

PIketty’s new book explores how economic inequality is perpetuated, an interview for the Harvard Gazette.

Thomas Piketty: Confronting Our Long History of Massive Inequality, an interview for The Nation.

Writings, lectures and charts

Le Blog de Thomas Piketty (in English)

Capital and Ideology, all the figures and tables from the book.

Capital and Ideology, a slide show presentation by Thomas Piketty at the London School of Economics

Inequality, a Global History: Syllabus and Reading List for Thomas Piketty’s lectures at New York University.

Lecture 1 – Development, state formation & inequality in the long run: from ternary to proprietarian societies.

Lecture 2 –  Property rights & development: 18c – 19c European variants (France, Britain, Sweden)

Lecture 3 –  Slave societies, abolitions, colonialisms (Caribbean, US, Brasil, Africa)

Lecture 4 – Colonial societies, state formation and comparative development (India, China, Japan)

Lecture 5 – The Great Transformation of the 20th century: from proprietarian to social democratic societies

Lecture 6 – Post-communist societies (Russia, China, Eastern Europe) and the rise of global capitalism

Lecture 7 – Social inequality and party systems in historical perspective (Europe, US, India)

Inequality in the Middle East, by Facuno Alvarado, Lydia Assouad and Thomas Piketty for VOX and CEPR Policy Portal.

Inequality and property in Russia by Filip Novokmet, Thomas Piketty and Gabriel Zucman for VOX and CEPR Policy Portal.

Reviews

Thomas Piketty Takes On the Ideology of Inequality by Marshall Steinbaum for Boston Review.

The world’s dominant Ideology is breaking | What will replace it? by Ryan Cooper for The Week.

Piketty’s Capital and Ideology: some notes by Matthew McKeever for Medium.

Tags: Capital and Ideology, Thomas Piketty