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(I'll stick with the original Capital, thank you very much.)
NY Times Sunday Book Review, March 8, 2020
Thomas Piketty Turns Marx on His Head
By Paul Krugman
CAPITAL AND IDEOLOGY
By Thomas Piketty
Translated By Arthur Goldhammer
1,093 pp. The Belknap Press of Harvard University Press. $39.95.
Seven years ago the French economist Thomas Piketty released “Capital in
the Twenty-First Century,” a magnum opus on income inequality.
Economists already knew and admired Piketty’s scholarly work, and many —
myself included — offered the book high praise. Remarkably, the book
also became a huge international best seller.
In retrospect, however, what professionals saw in “Capital” wasn’t the
same thing the broader audience saw. Economists already knew about
rising income inequality. What excited them was Piketty’s novel
hypothesis about the growing importance of disparities in wealth,
especially inherited wealth, as opposed to earnings. We are, Piketty
suggested, returning to the kind of dynastic, “patrimonial” capitalism
that prevailed in the late 19th century.
But for the book-buying public, the big revelation of “Capital” was
simply the fact of soaring inequality. This perceived revelation made it
a book that people who wanted to be well informed felt they had to have.
To have, but maybe not to read. Like Stephen Hawking’s “A Brief History
of Time,” “Capital in the Twenty-First Century” seems to have been an
“event” book that many buyers didn’t stick with; an analysis of Kindle
highlights suggested that the typical reader got through only around 26
of its 700 pages. Still, Piketty was undaunted.
His new book, “Capital and Ideology,” weighs in at more than 1,000
pages. There is, of course, nothing necessarily wrong with writing a
large book to propound important ideas: Charles Darwin’s “On the Origin
of Species” was a pretty big book too (although only half as long as
Piketty’s latest). The problem is that the length of “Capital and
Ideology” seems, at least to me, to reflect in part a lack of focus.
To be fair, the book does advance at least the outline of a grand theory
of inequality, which might be described as Marx on his head. In Marxian
dogma, a society’s class structure is determined by underlying,
impersonal forces, technology and the modes of production that
technology dictates. Piketty, however, sees inequality as a social
phenomenon, driven by human institutions. Institutional change, in turn,
reflects the ideology that dominates society: “Inequality is neither
economic nor technological; it is ideological and political.”
But where does ideology come from? At any given moment a society’s
ideology may seem immutable, but Piketty argues that history is full of
“ruptures” that create “switch points,” when the actions of a few people
can cause a lasting change in a society’s trajectory.
To make that case, Piketty provides what amounts to a history of the
world viewed through the lens of inequality. The book’s archetypal case
study is French society over the past two and a half centuries. But
Piketty ranges very far afield, telling us about everything from the
composition of modern Swedish corporate boards to the role of Brahmins
in the pre-colonial Hindu kingdom of Pudukkottai.
He describes four broad inequality regimes, obviously inspired by French
history but, he argues, of more general relevance. First are “ternary”
societies divided into functional classes — clergy, nobility and
everyone else. Second are “ownership” societies, in which it’s not who
you are that matters but what you have legal title to. Then come the
social democracies that emerged in the 20th century, which granted
considerable power and privilege to workers, ranging from union
representation to government-provided social benefits. Finally, there’s
the current era of “hypercapitalism,” which is sort of an ownership
society on steroids.
Piketty tries to apply this schema to many societies across time and
space. His discussion is punctuated by many charts and tables: Using a
combination of extrapolation and guesswork to produce quantitative
estimates for eras that predate modern data collection is a Piketty
trademark, and it’s a technique he applies extensively here, I’d say to
very good effect. It is, for example, startling to see evidence that
France on the eve of World War I was, if anything, more unequal than it
was before the French Revolution.
But while there is a definite Francocentric feel to “Capital and
Ideology,” for me, at least, the vast amount of ground it covers raises
a couple of awkward questions.
The first is whether Piketty is a reliable guide to such a large
territory. His book combines history, sociology, political analysis and
economic data for dozens of societies. Is he really enough of a polymath
to pull that off?
I was struck, for example, by his extensive discussion of the evolution
of slavery and serfdom, which made no mention of the classic work of
Evsey Domar of M.I.T., who argued that the more or less simultaneous
rise of serfdom in Russia and slavery in the New World were driven by
the opening of new land, which made labor scarce and would have led to
rising wages in the absence of coercion. This happens to be a topic
about which I thought I knew something; how many other topics are
missing crucial pieces of the literature?
The second question is whether the accumulation of cases actually
strengthens Piketty’s core analysis. It wasn’t clear to me that it does.
To be honest, at a certain point I felt a sense of dread each time
another society entered the picture; the proliferation of stories began
to seem like an endless series of digressions rather than the cumulative
construction of an argument.
Eventually, however, Piketty comes down to the meat of the book: his
explanation of what caused the recent surge in inequality and what can
be done about it.
For Piketty, rising inequality is at root a political phenomenon. The
social-democratic framework that made Western societies relatively equal
for a couple of generations after World War II, he argues, was
dismantled, not out of necessity, but because of the rise of a
“neo-proprietarian” ideology. Indeed, this is a view shared by many,
though not all, economists. These days, attributing inequality mainly to
the ineluctable forces of technology and globalization is out of
fashion, and there is much more emphasis on factors like the decline of
unions, which has a lot to do with political decisions.
But why did policy take a hard-right turn? Piketty places much of the
blame on center-left parties, which, as he notes, increasingly represent
highly educated voters. These more and more elitist parties, he argues,
lost interest in policies that helped the disadvantaged, and hence
forfeited their support. And his clear implication is that social
democracy can be revived by refocusing on populist economic policies,
and winning back the working class.
Piketty could be right about this, but as far as I can tell, most
political scientists would disagree. In the United States, at least,
they stress the importance of race and social issues in driving the
white working class away from Democrats, and doubt that a renewed focus
on equality would bring those voters back. After all, during the Obama
years the Affordable Care Act extended health insurance to many
disadvantaged voters, while tax rates on top incomes went up
substantially. Yet the white working class went heavily for Trump, and
stayed Republican in 2018.
Maybe the political science consensus is wrong. What I can say with
confidence, though, is that until the final 300 pages “Capital and
Ideology” doesn’t do much to make the case for Piketty’s views on modern
political economy.
The bottom line: I really wanted to like “Capital and Ideology,” but
have to acknowledge that it’s something of a letdown. There are
interesting ideas and analyses scattered through the book, but they get
lost in the sheer volume of dubiously related material. In the end, I’m
not even sure what the book’s message is. That can’t be a good thing.
Paul Krugman is an Op-Ed columnist for The Times.
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