Focus: Thomas Piketty, Capital and Ideology
2021 (43) Issue 1
Somehow it has been known all along: economic and social inequality is growing. But somehow this too had to be written down in black and white in detail, including perhaps a number of good reasons for its lawlike quality and future resilience. This was the achievement of Thomas Piketty’s Capital in the 21st Century, highlighted by its notorious basic formula ‘r>g’. As it turned out the formula tried in a contentious way to put the inequality threat into a nutshell. Not to be mislead by a claim to originality, by the help of it Piketty did not want to reiterate something well-known in traditional growth theory: that the return to capital is normally higher than the growth rate of the economy in general. Instead, he tried to summarize a conclusion, for the first time achieved less by ideal theory than on the basis of acute historical observation: that saving by higher incomes compared to lower incomes leads to increasing economic inequality, given certain conditions (especially a low growth rate). The conditions for these inequality-rising consequences of the formula seem to be given in our current societies, and can be expected to continue further into the future. Accordingly, we are confronted with an ethical-political challenge inherent in these precarious prospects.
In a conclusive way, Piketty mentions two tasks at the beginning of Capital and Ideology, which were left open from his 2013 book. First, he had to soften the restriction on rich Western societies in the earlier book, something which is being addressed by inclusion of a selection of third world countries. This is one extension which Capital and Ideology cares for, even if due to the non-disclosure of data by Russia and China there still exists an empirical blank in this area. The second, and overall much more important gap is addressed by the second title concept of the book: ‘ideology’. By ‘ideology’ Piketty refers to the ethical and political ideas which legitimize inequality, especially the ideas of justice. In contrast to Marxism he shirks the purely pejorative and dependent use of ideology, and instead grants it an original influence against the brute economic forces, especially a corrective one. Piketty is aware that such a ‘positive’ concept of ideology is in danger of becoming boundlessly legitimizing and relativist. He is answering this with the supposition of an existing collective learning process, which heads for egalitarian societies.This at least is the most interesting claim of the book, even if it is only implied and remains speculative in the end.
The book proceeds following several steps. In the two large starting chapters, which could nearly comprise a book of their own, it describes the early historical development of inequality regimes both in Europe and abroad, including the earlier slave societies. To this Piketty adds the breakdown of what he calls ‘ownership societies’ through the two great wars in the 20tieth century. The gist of these narrations highlights both the importance of economic inequality within social crises and gives proof to the importance of idea-driven social developments against inequality. In the two chapters of ‘social-democratic societies’ and ‘communist and post-communist societies’ the point is to describe these as historical phases rife with an experimental potential for pro-egalitarian policies, even if the actual societies somehow missed to achieve the right turn at the right moment. Especially within the ‘social-democratic period’ from 1950 to 1980, the conceptual innovations against private property: ‘public’, ‘social’ and (especially new) ‘temporary’ property were introduced, but the step towards an effective combination of all three innovations was never taken. So, as Piketty puts it, the ‘permanent transcending’ of capitalism was missed.
In its important last part Capital and Ideology gives us an analysis of recent and present political transitions from the ‘socio-democratic era’ of the 50ties to 80ties going into and through the ‘hypercapitalist’ era. Again, as in the earlier chapters the historic approach follows the agenda to make potential future developments visible, with the expectation to find a way out of the present political conflicts. For this purpose the author analyses the political party- and voter-development from the 1980ties onwards, first in a quantitatively detailed way for France and then for the US and several European countries. His foremost focus is on the basic change in the parties of the left, with the ‘workers’ party’ turning into a ‘party of the educated’, leaving the less educated behind to become the center of what he calls ‘nativist politics’, which becomes a politics driven by and circling around the problems of immigration. According to the ‘social hypothesis’ held by Piketty—against an originally biological motive of xenophobia—the parties on the left abandoned the less advantaged classes and the latter became involved in racism and anti-immigration policies out of their social conditions. On behalf of its meritocratic consciousness based on education and success, Piketty dubs this new left the ‘Brahmin Left’, which in the modern society is complemented by the not less well educated, but differently engaged class of the ‘Merchant Right’. According to his analysis the political power of the current Western societies is alternating between these two groups, whereas the non-educated groups become pushed aside to become low earners or welfare receivers.
The picture which Piketty draws might appear to be complex on the level of statistics and local part developments, but it is easy to follow in its most basic lines. The incisive historical turning point takes place around 1980, with the conservative ‘revolutions’ in the West and the breakdown of communism in the East. Due to several causes, a new, ‘neo-proprietarian’ ideology in the context of growing globalization not least, inequality started to rise to new levels. Given the growing influx of immigrants nationalist identities and movements became strengthened and found their emotional hold especially among the losers of globalization. The older, inner-nationalist distributive politics of the Left becomes complicated by the puzzle of how to fit immigrants and asylum seekers into their politics, challenging the quasi-internationalist ethos of earlier left parties and creating new ‘nativist’ (nationalist) policies and parties. How social groups relate to education on the one hand, and how to react to the fate of immigration on the other are the two central elements within a presumptive Pikettyian ‘theory’ to explain our present demise. In agreement with the ‘social hypothesis’ Piketty does not advise us to deal with ‘nativism’ head on, but he wants to correct first the rise to even further growth of economic inequality. His catchword for the countermeasures is ‘participatory socialism’, which binds together a number of instruments including, most importantly, worker participation in firms in the spirit of the German Mitbestimmung, as well as an unconditional grant for 25 year-olds to balance out the uneven starting points for the younger citizens. Whereas he sees voting rights in firms as a more conventional form of ‘social ownership’, he calls the grant proposal as a form of ‘temporary ownership’, because it temporarily allocates capital to the younger population and collects it from them again through taxes, not least an inheritance tax in the end. Piketty sees these pro-egalitarian policies as a third alternative to the institutionalized meritocracy on the side of the haves, and the anti-immigration fight of the have-nots. That these ideas have started circulating in an open public manner since the 2008 crisis, he interprets as a clear signal towards their urgency.
To conclude (with a look at the beginning), to which extent are we indeed the spectators of a collective learning process towards a more just society, ‘just’ in one specific sense of a participatory inclusion both in ‘democratic deliberation’—something Piketty refers to again and again—and in a more equal spreading of welfare? Such a big question as this one must remain open, at least for the time being. But the need for deliberation is indeed urgent, and in the following pages some extensions, objections and answers to this end can be found.
Table of Contents
Symposium on Capital and Ideology
Title: Accumulating Capital: Capital and Ideology after Capital in the Twenty-First Century
Author: Steven Pressman
Thomas Piketty’s blockbuster Capital in the Twenty-First Century was followed by the publication of Capital and Ideology in early 2020. This paper looks at the differences between the two books, and provides an analysis and a critique of the main advances in the new book. First, Piketty drops r>g as an explanation for rising inequality. Instead, inequality is generated and constrained by economic power supported by an ideology. Second, there is a focus on the political consequences of inequality, including the rise of right-wing populism and the election of people like Donald Trump. Third, there is a new policy proposal—changes in corporate governance that gives labor and government seats on the Board of Directors of public corporations.
Title: Ideology and Institutions in the Evolution of Capital
Author: Katharina Pistor
In Capital and Ideology, Thomas Piketty poses the intriguing thesis that ideology, or ideas about how society should be governed, is a powerful determinant for how society will be governed—as long as we take advantage of historical switch points. In this review essay I challenge this thesis by pointing out that many powerful ideas have run aground because of countervailing institutional arrangements. Oftentimes, they are leftovers from earlier times that precede the change and are now strategically employed for reconstituting private wealth. Clearly, ideology and institutions are deeply intertwined. I credit Piketty for putting ideology on the map of institutionalists in history, political sciences, sociology, and law. I therefore call for more research on the interaction of ideas and institutions.
Title: Is More Mittelstand the Answer? Firm Size and the Crisis of Democratic Capitalism
Author: Timur Ergen and Sebastian Kohl
Corporate concentration is currently being discussed as a core reason for the crisis of democratic capitalism. It is seen as a prime mover for wage stagnation and alienation, economic inequalities and discontent with democracy. A tacit coalition of progressive anti-monopoly critiques and small business promoters considers more deconcentrated corporate structures to be a panacea for the crisis of democratic capitalism, arguing that small firms in competition are better for employment, equality and democracy. This paper offers a brief outline of ideas of the anti-monopoly and small business ideal and critically evaluates whether a more deconcentrated economy may live up to these promises. While we agree that the plea for strengthened antitrust enforcement contains relevant and promising prospects for reform, our analysis concludes on a decidedly critical note. In particular, we caution against romanticized notions of the small capitalist firm.
Title: Tensions in Piketty’s Participatory Socialism: Reconciling Justice and Democracy
Author: Andreas Albertsen and Kasper Lippert-Rasmussen
In the final parts of Piketty’s Capital and Ideology, he presents his vision for a just and more equal society. This vision marks an alternative to contemporary societies, and differs radically both from the planned Soviet economies and from social democratic welfare states. In his sketch of this vision, Piketty provides a principled account of how such a society would look and how it would modify the current status of private property through co-managed enterprises and the creation of temporary ownership models. He also sets out two principles for when inequalities are just. The first principle permits inequalities that are beneficial to the worst-off, while the second permits inequalities that reflect differences in people’s choices and ambitions. This article identifies a tension between Piketty’s two inequality-permitting principles. It also argues that the procedural limits on how decisions are made within the enterprises of participatory socialism might create inequalities not permitted by the guiding distributive principles of participatory socialism. This tension points to the need for either further changes in firm structure and ownership, an even more progressive taxation scheme, or an egalitarian ethos reflected in citizens’ choices in their everyday lives under participatory socialism.
Title: Justice, Power, and Participatory Socialism: on Piketty’s Capital and Ideology
Author: Martin O’Neill
Thomas Piketty’s Capital and Ideology constitutes a landmark achievement in furthering our understanding of the history of inequality, and presents valuable proposals for constructing a future economic system that would allow us to transcend and move beyond contemporary forms of capitalism. This article discusses Piketty’s conceptions of ideology, property, and ‘inequality regimes’, and analyses his approach to social justice and its relation to the work of John Rawls. I examine how Piketty’s proposals for ‘participatory socialism’ would function not only to redistribute income and wealth, but also to disperse economic power within society, and I discuss the complementary roles of redistribution and predistribution in his proposals, and Piketty’s place in a tradition of egalitarian political economy associated with James Meade and Anthony Atkinson. Having elaborated on Piketty’s account of the relationship between economic policy and ideational change, and his important idea of the ‘desacralization’ of private property, I develop ‘seven theses’ on his proposals for participatory socialism, examining areas in which his approach could be enhanced or extended, so as to create a viable twenty-first century version of democratic socialism.
Title: More Lessons to Learn: Thomas Piketty’s Capital and Ideology and Alternative Archives of Social Experience
Author: Andreas Langenohl
Thomas Piketty’s Capital and Ideology has been written with the intention to offer lessons from the historical trajectory of economic redistribution in societies the world over. Thereby, the book suggests learning from the political-economic history of ‘social-democratic’ policies and societal arrangements. While the data presented speak to the plausibility of looking at social democracy, as understood by Piketty, as an archive for learning about the effects of redistribution mechanisms, I argue that the book, or future interventions might profit from integrating alternative archives. On the one hand, its current line of argumentation tends to underestimate the significance of power relations in the international political economy that continued after formal decolonization, and thus form the flip side of social democracy’s success in Europe and North America. On the other hand, the role of the polity might be imagined in a different and more empowering way, not just—as in Piketty—as an elite-liberal democratic governance institution; for instance, it would be interesting to explore the archive of the French solidaristes movement more deeply than Piketty does, as well as much more recent interventions in economic anthropology that deal with ‘economic citizenship’ in the Global South.
Title: About Capital, Socialism and Ideology
Author: Thomas Piketty
In this article, I attempt to briefly clarify a number of issues regarding what I have tried to achieve in my book Capital and Ideology. I also comment on the many limitations behind such a project, whose main objective is to stimulate further research on the global history of inequality regimes, at the intersection of economic, social and political history. Lastly, I address some of the many stimulating points raised in the reviews, particularly regarding the nature of participatory socialism and its incompleteness.
Title: The Role of Culture in Evolutionary Theories of Human Cooperation
Author: Hector Qirko
Evolutionarily-minded scholars working on the most puzzling aspects of human cooperation—one-shot, anonymous interactions among non-kin where reputational information is not available—can be roughly divided into two camps. In the first, researchers argue for the existence of evolved capacities for genuinely altruistic human cooperation, and in their models emphasize the role of intergroup competition and selection, as well as group norms and markers of membership that reduce intragroup variability. Researchers in the second camp explain cooperation in terms of individual-level decision-making facilitated by evolved cognitive mechanisms associated with well-established self- and kin-maximization models, as well as by ‘misfires’ that may result from these mechanisms interacting with novel environments. This essay argues that the manner in which culture provides information that de-anonymizes intragroup strangers suggests that neither evolved capacities for genuine altruism nor widespread misfires are necessary to account for anonymous, one-shot cooperation.
Discussion: Jonathan Birch, Toolmaking and the Origin of Normative Cognition
Title: The Skilful Origins of Human Normative Cognition
Author: Jonathan Birch
I briefly present and motivate a ‘skill hypothesis’ regarding the evolution of human normative cognition. On this hypothesis, the capacity to internally represent action-guiding norms evolved as a solution to the distinctive problems of standardizing, learning and teaching complex motor skills and craft skills, especially skills related to toolmaking. We have an evolved cognitive architecture for internalizing norms of technique, which was then co-opted for a rich array of social functions. There was a gradual expansion of the normative domain, with ritual playing an important role in bridging the gap between concrete, enacted norms and general, abstract norms, such as kinship norms. I conclude by stating nine predictions arising from the skill hypothesis.
Title: If Skill is Normative, Then Norms are Everywhere
Author: Kristin Andrews and Evan Westra
Birch sketches out an ingenious account of how the psychology of social norms emerged from individual-level norms of skill. We suggest that these individual-level norms of skill are likely to be much more widespread than Birch suggests, extending deeper into the hominid lineage, across modern great ape species, all the way to distantly related creatures like honeybees. This suggests that there would have been multiple opportunities for social norms to emerge from skill norms in human prehistory.
Title: Norms Require Not Just Technical Skill and Social Learning, but Real Cooperation
Author: Michael Tomasello
Birch’s account of the evolutionary origins of social norms is essentially individualistic. It begins with individuals regulating their own actions toward internally represented goals, as evaluative standards, and adds in a social dimension only secondarily. I argue that a better account begins at the outset with uniquely human collaborative activity in which individuals share evaluative standards about how anyone who would play a given role must behave both toward their joint goal and toward one another. This then scaled up to the shared normative standards for anyone who would be a member of ‘our’ social group.
Title: The Skill Hypothesis: A Variant
Author: Kim Sterelny
The basic idea of Birch’s analysis is plausible: normative guidance began in agents’ assessment of their own craft skills. But I suggest developing that idea in a different way. I suggest that proto-normative affect plays its guiding role diachronically, in the development of those skills, rather than synchronically, in modulating their moment-by-moment execution. More importantly, I suggest a different pathway to normative affect’s direction at second and third parties. Normative response became social in the context of skilled collaborative activities, for in those activities others’ failures have material consequences for each agent. In such collaborations, all have reason to care about others’ skill, or lack of it.
Title: Normative Guidance, Evaluative Guidance, and Skill
Author: Peter Railton
At least since Aristotle, practical skill has been thought to be a possible model for individual ethical development and action. Jonathan Birch’s ambitious proposal is that practical skill and tool-use might also have played a central role in the historical emergence and evolution of our very capacity for normative guidance. Birch argues that human acquisition of motor skill, for example in making and using tools, involves formation of an internal standard of correct performance, which serves as a basis for normative guidance in skilled thought and action, and in the social transfer of skills. I suggest that evaluative modeling, guidance, and learning play a more basic role in motor skill than standards of correctness as such—indeed, such standards can provide effective normative guidance thanks to being embedded within evaluative modeling and guidance. This picture better fits the evidence Birch cites of the flexibility, adaptability, and creativity of skills, and can support a generalized version of Birch’s ‘skill hypothesis’.
Title: Refining the Skill Hypothesis: Replies to Andrews/Westra, Tomasello, Sterelny, and Railton
Author: Jonathan Birch
I reflect on the commentaries on my ‘skill hypothesis’ from Andrews/ Westra, Tomasello, Sterelny, and Railton. I discuss the difference between normative cognition and the broader category of action-guiding representation, and I reflect on the relationship between joint intentionality and normative cognition. I then consider Sterelny and Railton’s variants on the skill hypothesis, which highlight some important areas where future evidence could help us refine the account: the relative importance of on-the-fly skill execution vs. longer-term strategizing, the relative importance of toolmaking vs. collaborative foraging, and the question of whether norms are encoded in control models themselves or in the goals and ideals that our control models help us pursue.