Thomas Piketty is a French economist and former wunderkind, who obtained his PhD from the London School of Economics at twenty-two. He is also that rarest of things: a bestselling academic author. His weighty 2014 book Capital in the Twenty-First Century was a surprise bestseller, which sparked much commentary and criticism. The book’s primary claim—underpinned by an impressive array of data—is that inequality is increasing in much of the world and that this has deepened social and economic instability because, since the neoliberal attacks that undermined the egalitarian reforms of the Great Society period, the rate of return on capital has exceeded the overall rate of economic growth. The result has been an increasing concentration of wealth at the top, much of it passed down through an inheritance system that has come to rival that of the Gilded Age. While Piketty’s empirical acumen has been broadly praised, some critics claim that he has misinterpreted his rich data set or argue that, even if correct, his conclusions are unimportant, since inequality is not a serious problem. Meanwhile, many on the left have accused Piketty of focusing too much on the economic determinants of inequality instead of the role of power, which has ensured that those at the top have remained where they are. Marxists have also accused Piketty of ignoring the theoretical resources of their venerable tradition.
Piketty’s new book, Capitalism and Ideology, is intended as a rejoinder to these critics. He acknowledges the limitations of Capital in the Twenty-First Century and presents this book as a significant step forward in our understanding of inequality. And it is not hard to see why. Capitalism and Ideology is an epic in every sense of the word. It clocks in at well over 1000 pages, dwarfing the already weighty earlier book. More impressively, its scope is panoramic: it charts the history of inequality across human history and civilizations. The slave societies of Ancient Rome, the pre-emancipation United States, Ming China, feudal Japan and the modern Middle Eastern petrol states, and the rise of nationalist alliances with capital, are all analyzed with Piketty’s signature data-driven fixation. His theoretical claims are even more interesting. Piketty observes that every society has been characterized by inequality and makes the shocking claim that the basis for this is not economic, but political. Consequently, every ruling class has had to develop ideological justifications to dignify its status, most of which have not stood the test of time and would be emphatically rejected by modern citizens. The lesson is clear: if there was nothing natural or necessary about the dramatic inequality of earlier societies, there is nothing requiring the dramatic inequalities in ours. Piketty’s book concludes with an inspiring call for a new international socialist movement to bring about a fairer global economic order.
History and Inequality
Inequality is neither economic nor technological: it is ideological and political. This is no doubt the most striking conclusion to emerge from the historical approach I take in this book. In other words, the market and competition, capital and debt, skilled and unskilled workers, natives and aliens, tax havens and competitiveness—none of these things exist as such. All are social and historical constructs, which depend entirely on the legal, fiscal, educational, and political systems that people choose to adopt and the conceptual definitions they choose to work with. These choices are shaped by society’s conception of social justice and economic fairness and by the relative political and ideological power of contending groups and discourses. Importantly, this relative power is not exclusively material; it is also intellectual and ideological. In other words, ideas and ideologies count in history. They enable us to imagine new worlds and different types of society. Many paths are possible.
—Thomas Piketty, Capital and Ideology
Capital and Ideology opens with the surprising—from an economist—claim that inequality is not primarily economic, but political and ideological. What Piketty means is that inequality is not a natural feature of human interaction, but the result of the choices people make within the parameters of power and their society’s conception of what is just. One of the engines of progress from slave tyrannies to liberal democracy has been the recognition of the malleability of our social relations and the subsequent demand for a more equitable distribution of wealth and power. The ruling elites have often tried to deny things could or should change by implying that their venerated status is either natural, transparently just or inevitable. Piketty insists that our society is no exception: confronted with the staggering inequalities between the billionaire class and those on minimum wage, apologists will trumpet the billionaires as job creators—as though Jeff Bezos single handedly built Amazon from the ground up, without thousands of workers to do most of the actual heavy lifting. It is telling that people say this billionaire helped thousands of people get jobs and not thousands of people helped this person become a billionaire.
To back up this claim, Piketty examines a variety of different societies, characterized by different property regimes and justificatory ideologies. First, he discusses ternary societies, such as those found in Medieval Europe, pre-colonial India and many Islamic states. Ternary societies are defined by a tripartite division between those who fight and rule, those who pray and teach, and those who work. The former two groups typically enjoy extensive privileges and entitlements, justified by an appeal to a divine order and the need for social stability. Workers enjoy some benefits, but are largely expected to obey the commands of their betters and are treated as little better than chattel. Worse still are slave societies, characterized by what Piketty calls “extreme inequality.” The most infamous of these have included the pre-Civil War American South, colonial Brazil, the colonial states of Britain and France and Russia under serfdom. Piketty observes that people like John Calhoun of South Carolina went out of their way to present “slavery as a positive good,” describing slaves as inferior and in need of paternalistic guidance. In many cases, slavery was only abolished after decades of concerted activism and huge payouts to slave owners to compensate them for their tragic loses. In places such as Haiti and the United States, war was required to put an end to the brutality. Finally, Piketty discusses the “ownership” or proprietarian societies, which began to emerge in the eighteenth century. He notes how zealous contemporary defenders of unbridled capitalist inequality ironically naturalize their own regimes, while early capitalists relentlessly strove to undermine the ternary and slave ideologies that stood in the way of progress. Piketty acknowledges the startling productive power of capitalism, while noting that nineteenth-century ownership societies were nonetheless characterized by staggering inequality and poverty. Much of this will be familiar to readers of Capital in the Twenty-First Century. Things changed in the twentieth century because of the threats of ascendant social movements and the World Wars, which necessitated a greater flow of wealth to states. During this period, progressive income taxes and inheritance taxes appeared for the first time:
In the late nineteenth century and until the eve of World War I, the wealthiest 1 percent of Parisians enjoyed capital incomes thirty to forty times larger than the income of the average worker. The tax these wealthy people paid on their incomes and inheritances did not exceed 5 percent, and they could only save a small fraction (between a quarter and a third) of the income from their property and still pass on enough wealth to the next generation to ensure that their offspring would continue to enjoy the same standard of living … All this suddenly changed at the end of World War I. Because of the shocks sustained during the war (expropriation of foreign assets, inflation, rent controls) and the new income taxes (whose effective rate in the 1920s climbed to 30–40 percent for the wealthiest 1 percent of Parisians and to more than 50 percent for the wealthiest 0.1 percent), this group’s standard of living fell to only five to ten times the average worker’s wage.
These shifts brought about the emergence of the social democracies, which achieved incomplete levels of equality and were often driven by excessively top-down projects. Piketty examines how the conditions that brought about social democracy gradually corroded, leading to the resurgence of inequality in the twenty-first century, which has brought about interesting and frightening new political forms.
So where was the political left when all this was happening? Piketty provides a damning answer. The political left gradually abandoned its roots as a workers’ movement and became what he calls the Brahmin left: a group of highly educated elites, whose interpretation of progressivism has more to do with cultural issues than equality. The left still tends to be more interested in redistribution than the right—which, as Piketty observes, remains the favored option of the wealthiest members of society in developed countries—but the redistributed wealth is mainly used to fund projects beneficial to urban and educated members of society. The result has been that the working classes and poor have had nowhere to turn for support, leading to growing anger and discontent with the status quo. Piketty observes that new populist movements have emerged to fill this void: ranging from Bernie Sanders-style Democratic Socialism and the Spanish Socialist Workers’ Party to the right-wing populism (which I call postmodern conservatism) of Donald Trump and Marine le Pen. The conclusion of the book spells out Piketty’s proposals for a participatory and international socialism for the twenty-first century. The idea is appealing for a number of reasons, and resembles recent calls by figures like Michael Brooks (whose excellent book I review here).
In its presentation of facts and data, Piketty’s book is beyond reproach. It is a staggering accomplishment of empirical and historical scholarship, and will remain a reference point for many years to come. The book is also very well written for an academic book. While it is long, the prose skips along and is punctuated by wit and interesting commentary. Piketty also makes a number of very interesting arguments about our contemporary moment. He rejects the ideas that workers have been blindsided by false consciousness into supporting right-wing populist parties, or that conservatives have somehow become genuinely interested in the working classes. Instead, he condemns both the Brahmin left and the nativist–merchant alliance of the right. Both reflect the ideologies of elites: the educated on the left and the wealthy on the right. Both offer a few fig leaves to working class sentiments—promising moderate redistribution of wealth or curbing migration—without changing anything fundamental. Piketty argues that it should therefore come as no surprise that the working classes have gravitated towards ever more radical populists, promising bigger changes. My fellow progressives would do well to heed this analysis.
However, the book falls short in a few areas. While Piketty’s examination of ideology is always clear and interesting, he provides little that is theoretically novel or surprising. The fact that different societies have found different ways of justifying unnecessary inequalities is always a useful thing to hear. But it is hardly old news: Karl Marx and Adam Smith railed against this in their own times. In his Theory of Moral Sentiments, Smith even makes the subtle point, rarely addressed by Piketty, that the problem with ideology is not just that it is disseminated from the top down. The reverence the disadvantaged pay to their self-appointed betters is also a problem, and contributes to the corruption of human moral sentiments.
This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments. That wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue; and that the contempt, of which vice and folly are the only proper objects, is often most unjustly bestowed upon poverty and weakness, has been the complaint of moralists in all ages.
This line has been picked up by many ideology theorists through the centuries. Critical theorists like Wendy Brown have long observed that the problem with ideology is that people can come to accept and even welcome their own subordination, due to the human propensity to glamorize and defend power even as it exploits us. Any resentments towards the ruling elites can be subtly redirected towards the even more unfortunate, which explains why so much of Fox News’ ranting about elites relentlessly focuses on their support for immigration and international aid, rather than demanding a redistribution of wealth from the top down. These nuanced operations of ideology need to be understood if it is to be confronted, and Piketty’s book unfortunately pays slight attention to such points.
Nonetheless, Capital and Ideology is a vital work for our time, and a virtual encyclopedia of inequality through the millennia. It is an even better book than Capital in the Twenty-First Century and will hopefully find an even more receptive audience.