I’m currently reading Thomas Piketty’s Capital in the 21st Century, which, as you may imagine, is a book on economics. And because it’s a book on economics for the 21st Century it’s focused primarily on the dynamics of income inequality… which is a subject that I spent the better part of a decade getting my ass kicked over, so it’s kind of caught my attention.
Capital in the 21st Century is on the top of a bunch of bestseller lists, and it’s created a huge controversy. It’s being hailed as a must-read book, a game-changer, and revolutionary. It’s been called the new Das Kapital. It’s clearly an important book.
That’s not why I started reading it. I started reading it because it pisses off conservatives in highly amusing ways. I bought it because anything that generates that much badly-spelled invective on the internet is probably worth a look.
I’m now reading it for its own sake, because it’s actually very interesting. I have, however, run into a few problems with getting through the actual text:
First, it’s an incredibly long book. My iBooks version clocks in at around 1200 pages, depending on font and point size.
Second, it’s been translated from French into English, and there are some odd linguistic artifacts in the text, which tends to slow down my reading.
Third, it’s a extremely dry subject. Much of the Introduction and Part One: Income and Capital is painfully technical economics stuff explaining how he gathered his data and applied it.
As a non-economist, I’m going to admit that I’m not retaining as much of the dry facts as I hoped I would. What I have taken away from it so far is that Piketty has access to an enormous amount of data that economists simply didn’t have available a hundred years ago (primarily generations of income-tax records) and he also has the technical tools which make possible a broader analysis than ever before (read: computers). He has also deliberately devised a model of economic analysis which far broader than the old “gross domestic product” model, and applied it.
He postulates that the economics of capitalism in the 20th century were anomalous. Two World Wars and the Communist domination of more than half the world’s market skewed the curve. Literally skewed it — there are diagrams. The post-WW2 era of prosperity in the West is a direct result of massive State intervention in (and regulation of) the economy, as well as self-imposed constraints by the wealthiest as part of a general feeling of solidarity in the face of Communist expansion. With the demise of Communist bloc economic influence (and yes, that includes China, which is one of the world’s fastest-growing capitalist markets despite the red stars plastered over everything) and the ideologically-driven deregulation of the marketplace since the late 1970s, unrestricted free-market capitalism has been allowed to run rampant.
Here’s were the controversy comes in: Piketty posits that unfettered capitalism in the current mode is completely unsustainable on the global scale. The last time that unrestricted free-market capitalism had this kind of unrestricted growth was the end of the 19th century, a time known as the “Gilded Age” in the West. (We are, for all practical purposes, living in the Second Gilded Age.) Piketty argues, convincingly, that this sort of unrestricted capitalism allows the accumulation of capital in an increasingly small circle of the hyper-wealthy, who then are able to wield vastly disproportionate economic and political power, which therefore results in increasingly disparate economic inequality with no incentive to self-regulate and/or redistribute capital into a more equitable structure.
Or, to put in in plain English: The rich get richer, the poor get screwed, and pretending otherwise is wishful thinking.
Well, yeah, no shit. Piketty’s approach is simply verifying with hard numbers what a lot of us have known intuitively for quite some time. Then he goes on (and fair disclosure, I’m getting this second-hand because I haven’t read that far yet) to make suggestions on how to put the brakes on the widening gap of income inequality and how to shift the unsustainable model of capital accumulation into a more sustainable economy for the long-term: Tax and regulate. Scaled property and income taxation for the hyperwealthy (the more you make, the greater a percentage of your wealth is returned to state control via taxation) and more regulation of corporations to force compliance with economic, social, and environmentally responsible behavior; Unrestricted capitalism for it’s own sake is not sustainable, therefore capitalism must be restricted sufficiently to allow sustainability.
I’m pretty sure that sound I’m hearing is Milton Friedman spinning in his fucking grave.
The 1%, the 0.01%, and their cheerleading section among the Right have been freaking out over the merest suggestion that this is an issue. Worse, it’s not a bunch of Occupy Wall Street gutter-sweeping scofflaws shouting this stuff in the streets, it’s a respectable economist making cool, calm and rational arguments in a peer-reviewed forum. His arguments are sufficiently solid that most of the criticism he’s been receiving has not in fact been logical or particularly rational, it’s been name-calling. Literally. Piketty’s been widely accused on the Right of being a “Marxist” and an “anti-capitalist” which is completely ridiculous. (In fact, in his introduction he takes a fairly insulting swipe at “the lazy rhetoric of anticapitalism” before spending about forty pages blowing holes in Marxism.) The Right is wrong to make those accusations: Piketty isn’t anybody’s radical, he’s an economist who took on a big job, did it well, and drew the logical conclusions; I hope he gets a Nobel Prize in Economics for his efforts, but a fire-eyed revolutionary he ain’t.
Something needs to be done in how we run the global economy, because the way we’re living isn’t sustainable. Capitalists and corporations have been given the chance to self-regulate, and they have not done so, to the detriment of our planet’s future and our civilization’s long-term stablity. That experiment has clearly failed, just as the hyper-regulated experiment of Communism failed. Piketty has made some suggestions for a new experiment.
I’d like to see the change that would allow my lifestyle of middle-class comfort to be sustainable, for myself and my (currently theoretical) offspring. I’d like to see that sustainability extended to all humans on this planet (and eventually off-planet, because I am that kind of nerd.) I don’t want wars and upheaval and revolution and (despite some accusations) I never have. The anti-globalization movement was sadly misnamed — it was an “anti-unrestricted-corporate-globalization movement” — and I personally preferred to use the term “global justice movement.” The “Occupy movement” of a couple of years back was only the most recent iteration of a mindset which recognizes that the capitalist philosophy of “unlimited acquisition for its own sake” has no long-term future.
Picketty has recognized that, quantified it, and published a work which has been absorbed into the public consciousness like water poured on parched ground. The Right and the wealthy find his suggestions terrifying, which to my mind is adequate enough reason to try them out… but then I’ve always had a recalcitrant streak a mile wide.