The Comparative and International Political Economy group at the LSE hosted a half-day discussion of Thomas Piketty, politics, and social policy, on the growing economic inequalities that Piketty and his collaborators document and what can be done about them, based on Piketty’s Capital in the Twenty-first Century. I had the good fortune to be in attendance just after signing off on edits on my review essay about Piketty and bioethics for IJFAB 8.2. This is the third of four blog posts describing the event.
One feature of this UK winter, apart from our enjoying an unusual allotment of sunshine, is that nothing can be accomplished—groceries sold, hair salon services offered, or intellectual phenomena critiqued—without reference to Fifty Shades of Grey. Robert Wade asked whether Capital’s sales figures will hold up, or drop off a cliff the way those of Fifty Shades did—asking, of course, not about retail strategy but about impact.
Wade traced Capital’s success to middle class anxiety about the changing prospects for their children and disbelief at the outcome of the financial crisis. The book is like a self-help book: it explains why you’re feeling anxious, and affirms that a lot of people like you are also feeling anxious. But will the interest endure, and will it shift public policy? The elites aren’t really afraid today, the way they were when the social state was built and public policy compressed income inequality in the 20th century. From his perspective in international development, Wade raised the whole story of the shift of production to the Asian workforce, the loss of economic power and disintegration of family life for the poor in the “west,” and the process of “financialization” in global markets and societies, with its soaring incomes for some in the financial sector. His criticisms are online here and here.
There was debate in this talk and throughout the afternoon around whether Piketty is clear about the costs of—the moral critique of—inequality. Wade referred to height data—I mean, how tall people are on average in a society. There’s a long story about why this works as an embodied proxy of economic equality: the greater the inequality in a society, the lower the average height, in a nutshell, because people can be 1,000 times richer than other people, but they can’t be 1,000 times taller—they’ll only be a little taller, because a little healthier. The more that resources are distributed to the poor, the more the average height in a society rises. Others referred to Pickett and Wilkinson’s Spirit Level as a touchstone for the effects of inequality on health. Some took Piketty’s comments on opportunity and fair distribution as enough of a positive moral case for egalitarianism.
I do think Piketty is relatively weak on this—he tends to present the issue of fair distribution through the threat of the masses acting out, as though he’s saying, “we might not care about it, but they do.” He owns more directly the argument from opportunity, and the social utility of rewarding effort and achievement. Rawls is his touchstone here, which is an indication of one area where political philosophers can weigh in on the discussion.
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Hopkin argues that Piketty underplays the role of political dynamics in disrupting the operation of his fundamental laws of capital, and also in constituting the very meaning of property itself. Political science (and I might add normative legal and philosophical theory) have much more to say about the dynamics of the former and the social construction of the latter. I think he shortchanges Piketty on the former, but understandably so. By the time you’ve read even 100 of the 700 pages of Capital, you’ll be wondering about this word “shock.” Wealth accumulates in a society, Piketty says, but for “shocks”—and these include not just wars and their physical disruption of capital, but policy measures like rent controls, a prime example Piketty uses of how political action can dampen rising wealth accumulation, in this case by depressing the value of real estate as a form of capital. You might know the word from Naomi Klein; Piketty has it from the economist Pareto, who demonstrated how greater wealth becomes concentrated in the hands of smaller of smaller numbers of people as fortunes are exposed to unpredictable events that destroy some fortunes and boost others. Much of the political and policy substance of what causes wealth concentration, but also what can mitigate the market’s tendencies to inequality, passes by quickly in Piketty, and is labelled generically as “shocks.”
Hopkin used Piketty’s charts to focus us on political events, not random-sounding shocks to a supposedly balanced system, but the actions of people as they struggle over power with normative goals. The late sixties in the US and France led to very different directions of change by 1980—for example, the minimum wage began to drop in the US with occasional upticks ever since, while it began a long, consistent rise in France.
Admittedly, political science has been lulled by functionalist and, more recently, rational action theories that have focused its efforts on explaining the supposedly stable social harmony of capitalism, Hopkin argued; but it’s showing a renewed interest in social conflict, and this is where its efforts need to focus in order to contribute to the broader debate Piketty wants to foster, a debate leading to political action.
Hopkin’s discussion kicked off an lively part of the afternoon, in which the audience and speakers debated what matters in social conflict and what can bring about change. One participant referred us to middle-income countries as places where we can see what political motivation towards egalitarian policy looks like; another challenged whether the 50% (the poorest half of the population) should be given the burden of having to mobilize to address the mess we’re in.
