Thomas Piketty: Confronting Our Long History of Massive Inequality

French economist Thomas Piketty poses during a photo session in Paris on September 10, 2019. (Photo by Joel Saget / AFP / via Getty Images / Courtesy of Harvard University Press)

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Thomas Piketty’s extensive book from 2013, Capital in the 21st century, caused a rare academic frenzy in this country and beyond. It did so by playing an important role in providing a specific explanation for growing inequality, backed by an incredible amount of historical and statistical evidence from the 18th century in France, the United States, the United Kingdom and Germany. The return on inherited assets in an economy would always grow faster than the income earned from compensated work. Increasing inequality is therefore part of the nature of capitalism, Piketty noted, and can only be checked through various types of government intervention. There are critics of Piketty’s book in all parts of the political spectrum, but there’s no denying that Capital in the 21st century symbolized an emerging ethos after the 2008 financial crisis.

Seven years later, Piketty has returned with an even larger and more ambitious book: Capital and ideology. He sees this book as the successor to Capital in the 21st century But his claims are evolving in two ways: first, the previous book’s claim that inequality tends to increase when the average return on investment exceeds the rate of growth of the economy gave the impression that there was some kind of law-like need for capital can be done to change the institutions that create inequality apart from their taxation. Instead, the new book boldly proclaims that inequality is ultimately rooted in ideology. “Every human society has to justify its inequalities. If no reasons are found, there is a risk of the entire political and social building collapsing. “Societies justify inequalities, he argues, by” the realm of ideas “or what he describes as” the political-ideological sphere “that is” really autonomous “. Such an assertion is certainly being discussed. But the reason why Piketty defends is clear: to show that inequality is not natural and that it can be confronted and transformed through sociopolitical mobilization.

Second, Piketty moves beyond the narrow geographic focus Capital in the 21st centuryto provide a global history of how different political systems justified inequality and how those systems have changed over time. These inequality regimes, as Piketty describes them, include: ternary societies – made up of clergy, nobles, and ordinary people – such as the feudal system in premodern Europe or the Indian caste system; Owner companies of the 19th and early 20th centuries, such as the civil property rights systems in France and Great Britain; Social democracies of the 20th century that arose in Europe after the Second World War; and what he describes as “hypercapitalism” of the post-communist world order.

By focusing on transforming the underlying ideologies of these inequality regimes, Piketty shows that “sociopolitical mobilizations can transform the organization of societies and inequality structures much faster than most contemporary observers imagine”. With that in mind, Piketty offers his own policy proposals, such as the division of power in companies, a progressive wealth tax, a temporary property plan (the idea that the wealthiest private owners have to return part of their property to the community each year) to facilitate circulation of wealth) and various solutions to make western societies more democratic.

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