A BRIEF HISTORY OF EQUALITY
By Thomas Piketty
Thomas Piketty begins his latest book with a jovial mention of the pleas he receives to write something short – previous books were about 1,000 pages long – and ends with the hope that he has given “citizens”, rather than economists, new weapons in the fight against inequality, that is his main subject. This should not be taken as a sign that “A Brief History of Equality” has been deliberately simplified. It’s not based on any new economic finding, like the one in “Capital in the Twentieth Century,” where Piketty reported that the return to capital is outpacing the pace of economic growth. But neither is it written in a tone of patient explanation. It is useful as an opportunity for readers to see how Piketty brings great relief to his larger argument about the origins of inequality and his program to combat it.
Much of the current discussion about inequality focuses on the period since 1980, when the benefits of growth went to the wealthy much more limitedly than before. Though Piketty hardly disputes this, here he announces that he has come to tell an optimistic story about the world’s astonishing progress towards equality. He does this by creating a much broader time frame, from 1780 to 2020, and by focusing on politics and measures of welfare and economics. Life expectancy has risen from 26 to 72 and with the rise of compulsory state education, the literacy rate is from about 10 percent to 85 percent. Slavery and colonialism, once endemic, have been largely abolished. Perhaps half the population of the developed world is at least middle class, although before the 20th century there was no middle class to speak of. Voting rights, previously limited to male property owners even in democracies, are well on their way to becoming universal.
What caused this progress? Piketty has a clear answer: the advent of progressive taxes on income and wealth, and of the comprehensive welfare state. Taxes reduced inequality and paid for the welfare state, which has provided education, health care, old-age pensions and protection from severe hardship. Our culture’s well-known claims about how growth, innovation and entrepreneurship are connected to general prosperity are completely beyond Piketty’s explanation. Instead, he says, property owners have always used their excessive influence over government to create systems of “military and colonial rule” and environmental pollution that made them even richer than they already were. The idea that growth can solve the world’s economic problems is “totally insane.” Only a substantial weakening of property rights — a process that in the past has included the abolition of slavery but has many more steps to take — can do that.
Piketty writes like a citizen of the world, suspicious of nationalism, but his thinking strikes this American reader as strikingly European – indeed, specifically French. In the United States, when we think of the very wealthy, we usually think of workaholic high earners in technology, finance and executive suites. More concerned with property than income, Piketty thinks about rentiersindividuals not so different from the pre-revolutionary French nobility, except that they have turned their influence into financial assets rather than feudal landholdings.
While Piketty favors much higher income tax rates (“nearly confiscating tax rates have been a huge historical success”), policies that redistribute property rather than income are at the heart of his program. These include reparations for descendants of enslaved and colonized people, encouraging countries in the south of the world to tax the fortunes of non-residents doing business there, debt forgiveness and a program he called “legacy for all.” in which wealth taxes provide large fortunes and provide everyone with a financial buffer. He would also take a great deal of control over companies from their managers and shareholders and give it to employees, creating “a system of egalitarian financing for political campaigns, the media and think tanks.” All this would amount to “a profound transformation of the global economic system”.
The name Piketty gives to his program is participatory socialism. Economically, it’s significantly to the left of what American liberals are used to considering. (It’s another sign from Piketty’s Europeans that he’s using “liberal” to refer to Ronald Reagan-style economic policies, and yet another sign that he’s much more uncomfortable than the mainstream Democratic Party with a long-running race-conscious policies aimed at helping minorities otherwise they would encourage ‘identity introversion’.) He is well aware that changes on the scale he proposes never happen incrementally. Significant movement in the right direction, according to its light, has always required wars, revolutions, economic depressions, and “large-scale political movements.”
Are such upheavals imminent? Piketty makes no predictions, but he sees the current system of “hypercapitalism” as clearly doomed to failure. Aside from socialism, the only real alternatives are authoritarianism, Chinese-style communism, or “reactionary projects” such as ISIS. And political reform will not be sunny: “The idea that there may only be winners is a dangerous and numbing illusion that must be abandoned immediately.” He is right that large-scale change in the order he deems necessary is rare and usually associated with disaster. However, incremental adjustments happen constantly. Without disaster, it seems possible or even likely that they will steer economic policy in the direction Piketty would like — away from the market-friendliness of the late 20th century — albeit to an extent he would find pathetically inadequate. That may already be happening. If so, his work, with his determination to step outside the terms of the debate, is partly to blame.