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Thomas Piketty (2020), Capital and Ideology, Cambridge, Mass: Harvard University Press, £31.95, pp. 1104 pages, hbk.

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Thomas Piketty (2020), Capital and Ideology, Cambridge, Mass: Harvard University Press, £31.95, pp. 1104 pages, hbk.

Published online by Cambridge University Press:  17 February 2021

DAVID PIACHAUD*
Affiliation:
London School of Economics
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Abstract

Type
Book Review
Copyright
© The Author(s), 2021. Published by Cambridge University Press

Capital in the Twenty-First Century (2014) was a formidable book that brought income and wealth distribution onto centre stage, and onto the best seller list in the US. In it Thomas Piketty examined changes in income distribution primarily in western economies in the 19th and 20th centuries: why, for example, did inequality fall in the US, Germany, France and Britain for most of the 20th century but then increase since around 1970? In his latest book he extends the scope in time going back a thousand years and forward into the 21st century as well as including most of the world, notably adding India, China and the Middle East – he ‘de-Westernizes’ our gaze. In addition, he provides explanations of changes in inequality on the basis of social and political developments and has an extensive analysis of political parties and movements since the mid-20th century. The book is, in effect, a history of inequality in the world over the last millennium. It is hardly surprising that the book has over one thousand pages.

Piketty’s survey of a millennium’s history of inequality distinguishes six types of inequality regime: first, ‘trifunctional’ societies, comprising nobility, clergy… and the rest (predominantly, labourers); second, ownership societies, where power and wealth depended on legal title; third, slave and colonial societies; fourth, social democratic societies; fifth, communist societies; sixth, the latest phase of ‘hypercapitalism’ (with soaring inequality, notably in the Middle East, Russia and China). His description is full of interest and detail and the evidence on slavery and colonial societies is timely and shocking. But to cope with such a broad canvas Piketty has to simplify and summarise; many important differences – for example, in gender and ethnic inequalities – get little attention.

It is on ‘hypercapitalism’ and its consequences that there is most uncertainty. Piketty reveals his frustration: “Although lack of transparency about inequality is a global problem, it is clear that Russia and China are more opaque than most. As for recording and measurement of wealth in China, the situation is even worse than for income. In particular there is no Chinese inheritance tax and therefore no data of any kind concerning inheritances, which greatly complicates the study of wealth concentration. It is truly paradoxical that a country led by a communist party, which proclaims its adherence to ‘socialism with Chinese characteristics’, could make such a choice” (p.621). Up to now growing inequality in China has not threatened social stability – whether because of the repression of dissent in Tiananmen Square, Xinjiang and Hong Kong or, more positively, the stunning rates of economic growth, urbanisation and poverty reduction.

Piketty is not merely descriptive and analytic; his final chapter proposes “Elements for Participatory Socialism for the 21st Century”. He advocates three forms of highly progressive taxation – of wealth, of inheritance and of income. He favours sharing power in firms through co-management, a basic income for all (but a means-tested one and not a universal basic income), and global economic justice through a new Transnational Assembly. He makes a strong case for all these ideas.

Inequalities of wealth and income have far-reaching social consequences, so that the whole book is relevant to social policy. But social policies are not merely the consequence of but also the cause of many of the changes in inequality. Social policy is more important than even Piketty seems to realise. He is justifiably concerned that “economics has cut itself free from the other social sciences” (p.1039). And he discusses the impact on inequality of spending on education. But he has little to say about health and the inequalities of life expectancy and life-time incomes, nor about housing and its finance, one of the main drivers of increasing wealth inequality, nor about social security, one of the main equalizing mechanisms in society, nor about the state’s role (or lack of role) in the recognition and inclusion of minorities.

Piketty writes that his approach “differs from approaches sometimes characterized as ‘Marxist’, according to which the state of the economic forces and relations of production determines a society’s ideological ‘superstructure’ in an almost mechanical fashion” and that his most striking conclusion to emerge from his historical approach is that “Inequality is neither economic nor technological; it is ideological and political” (p.7). Yet Marx was surely right that modes of production determine class relations and economic inequality. The world’s three richest people – according to the Bloomberg Billionaires Index, together ‘worth’ nearly half a trillion dollars – are the founders of techno-giants Amazon, Microsoft and Facebook. While inequality is certainly ideological and political, it is also economic and technological.

Notwithstanding, this is, overall, a remarkable book – in some respects an encyclopaedia on inequality; in parts original and thought-provoking; sometimes rather disjointed and hard to follow; certainly not introductory reading for students. Perhaps it tries to do too much. But ambition and a broad view should be academic virtues, not vices.

Piketty starts with a bold declaration: “Every human society must justify its inequalities: unless reasons for them are found, the whole political and social edifice stands in danger of collapse” (p.1). Not everyone has given inequality such priority. Concern with inequality is one among many political goals – maximizing military power, preserving privilege, enhancing economic growth, preserving peace, and many more – which may or may not include social justice. It is not clear that those with power in many of the world’s most unequal societies spend much time justifying their inequalities – in their eyes, might is right. Piketty is a confident global social democrat, who believes in liberty, equality and fraternity. His latest book can only advance his aspirations.