Piketty, The Wall Street Journal, and Rational Conservatives

Conservatives should pay more attention to Piketty!

Thomas Riggins


Thomas Piketty's book, Capital in the 21st Century, has almost had the effect of a tsunami on economic thinking here in the United States after its translation from French into English washed up on our monoglot shores. In France itself it has been treated as more or less just another economics book-- no big deal.

Its impact on the US is due to many factors, not least of which is the fact that our educational system is woefully inadequate by European standards as well as our lower cultural literacy compared to Europe. Piketty's work appears here as a revelation, but to the educated European he is only providing a fuller historical context for what most people already understand.

Marxists, especially, should have been under whelmed to learn that the capitalist system creates imbalances in wealth with a large pool of poor and exploited workers at one pole and a small group of capitalists hogging the social wealth at the other.

Piketty tells us this system is not sustainable and to prevent the "Marxist Apocalypse" the capitalists have to modify their behavior and moderate the social inequalities their system creates. The thought that capitalism might be replaced is indeed an apocalyptic nightmare for the bourgeoisie but for the working classes it might be more like a Marxist Epiphany come true.

The Wall Street Journal, no friend to the Left, has reviewed Piketty's book ("A Not-So-Radical French Thinker" by Pascal-Emmanuel Gobry, weekend edition May 24-25, 2014). Here we find, implicitly, that not only have some on the Left "lost it" over seeing Peketty as some sort of super progressive, but that many American "conservatives" have, explicitly, also gone completely off the deep end by referring to Piketty as a "soft Marxist."

The conservative movement is the U.S. is, however, overloaded with "thinkers" who are intellectually immature and dishonest, selling their brain power (such as it is) to the Koch brothers, the Murdochs, and their ilk. The WSJ review points out that Piketty is a professional academic economist and his book merits consideration. He is a neo-liberal economist who supports market capitalism and, like many other neo-liberals, he advocates "government redistribution to smooth out some of the market's excesses.".

The WSJ points out that in France you can find "honest-to-goodness actual Marxists [that] are still at large" and Piketty is not one of them. The fact that he has simply described how capitalism is actually functioning and this is enough to send so called conservative intellectuals into a nose dive (one from the American Enterprise Institute is especially mentioned) over "soft Marxism"  is evidence enough that many, I think most, conservatives have no regard at all for the facts or even rational discussion but are only mouth pieces for the corporate interests who support them as paid propagandists.

Piketty is worth reading. Marxists have a deeper understanding, I think, about the functioning of the capitalist system so there will be no surprises here, but readers will find a detailed history of wealth distribution and creation over the last three hundred years that will convince anyone with an open mind that this system is exploitative and is leading towards an implosion that could very well destroy it.

Marxists, of course, think the system must be replaced and is ultimately existentially unreformable. Neo-liberals such as Piketty do not agree and he proposes reforms in his book which he thinks will save the sinking ship (such as an international, or at least a European Union, wealth tax).

The WSJ review suggests that the right wing could benefit from reading Piketty. If the inequality he describes is not remedied "it could undermine the social order" and "for all the huffing and puffing about Mr. Piketty's supposedly revolutionary ideas, that conservative insight might be his most lasting contribution to the American debate." Indeed, it well might.

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  • Bravo Tom, and fine responses by Nat and Al. Given the response of establishment economists and of course the NAM and the Chamber of Commerce in the past to Keynes, who pretty much said the same thing about capitalism's possible future(but did it more powerfully with the concept of secular stagnation) this is a little of dejavu all over again. As for "rational conservatives," in the U.S. we usually call them "liberals" and the irrationals call them socialists and communists
    Norman Markowitz

    Posted by norman markowitz, 06/25/2014 11:13am (3 years ago)

  • Fine analysis Tom and also excellent responses from Nat Turner and Al(no relation) Markowitz. Keynes said the same thing about capitalism in the 1930s and there were some capitalists who got the point. By the way, in those days the "neo liberals" were called "neo classical" and Keynes beat Piketty in a sense by his never to be forgotten response to those who said "in the long run" all would work out if government let the business cycle run its course--"In the long run, everyone is dead" which was understood as a warning that the crisis would lead to anti-capitalist revolution if "the market" was left alone
    As for "rational conservatives," I prefer the "smart rich," who haven't been seen so much in the U.S. in recent decades, and are also very rare in the Wall Street Journal.
    Norman Markowitz

    Posted by norman markowitz, 06/25/2014 11:02am (3 years ago)

  • The Irrationals:
    The distinction between rational conservatives like the WSJ and irrational conservatives is analytically a good one. Rational conservatives realize capitalism is in crisis, and they recommend rational remedies and reforms to avoid the ‘Marxist apocalypse.’ But irrational, proto-fascist, faith-based conservatives see no problem. As Thomas Riggins notes, the irrationals are the ones who do not rely on facts or even rational discussion. Many are paid corporate propagandists, and their attacks on Piketty have been most egregious. The difference is important to managing the crisis of capitalism: slow growth, massive unemployment, and growing inequality. The irrationals believe that high growth rates will somehow return and wealth inequality will shrink. They recommend unfettered unregulated capitalism. They attack Piketty’s historical evidence and his grand theory as irrelevant. However, these are systemic and historical tendencies the irrational conservative refuses to see or admit. On the other hand, the irrationals are the ones refusing to invest in, for example, renewable energy, or other investments that would revive growth rates. Many irrationals are also paid for, corporate owned politicians. Capitalism is surely in trouble when a hereditary oligarchy has political power to concentrate wealth and to pass it on to its children; and power to freeze social relations to insure less economic mobility and opportunity for the underclasses. The privileges of this new class are already evident in the corporate bailouts and tax breaks they receive. Compare that to the acceptance of high levels of unemployment and economic insecurity for the working classes. In the ultimate analysis, if Piketty’s projections about the future of capitalism are correct, the irrational capitalists and entrepreneurial classes will turn to fascist/neo-fascist solutions to save their wealth and social privileges as capitalism breaks down and loses legitimacy. Of course, the other future and rational alternative is to ditch capitalism and build socialism. NT

    Posted by Nat Turner, 06/23/2014 8:16am (3 years ago)

  • Thomas Piketty, in his popular thesis, "Capital in the Twenty-First Century" focuses on increasing wealth disparity, demonstrating that it is built in to the capitalist system. He blames the contrast between the rate of return on investments and the economic growth rate of society defined by his now famous formula r>g as the reason for the pooling of wealth to the top 1%. It is a too limited an analysis and fails to take in the imposing of neo-liberal economics of international sweatshop exploitation, corporate deregulation, worker disempowerment and massive impoverishment that have resulted in the greatest transfer of wealth in history. As Marxists know, capitalism, by its nature and internal rules is blindly destructive in its drive for maximum profits. Capitalism has lived beyond its usefulness to all but a few and has little but ecological destruction, war, and misery left to offer. We have a better formula: The power of a conscious, united working class > than all their money and armies combined. Working class culture and the consciousness that permeates this collection is key to building that unity.

    Posted by Al Markowitz, 06/22/2014 8:24am (3 years ago)

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