The Review of the Reviewers

Thomas Piketty and the Sensation of Being a Left-Liberal Hero

If you’ve being paying attention to the left-liberal internet lately, you’ve come across Professor Thomas Piketty and his new book, “Capital In the 21^st Century.”  It has topped the Amazon best-seller list, been mentioned in the Economist, the New York Times by Paul Krugman and on Alternet, Truthdig and Salon.com, among others.  Piketty teaches economics at the Paris School of Economics and was an advisor to Ségolène Royal in the 2007 elections in France.  Royal was one of the aspiring candidates of the Socialist Party of Francois Hollande. (See ‘Messr. Hollande’s Holiday,” below.)  Piketty’s parents were members of Lutte Ouvrière (Workers' Struggle), a French Trotskyist party.  After 1968, the parents left politics to raise goats in the French hinterlands.    Piketty went on to get his PHD at the London School of Economics, specializing in English income tax studies. 

Piketty tells the Guardian:  “I discovered that the data that did exist contradicted nearly all of the theories including Marx and Ricardo…I saw a pattern beginning to emerge … is that capital, and the money that it produces, accumulates faster than growth in capital societies.”  The liberal interviewer, Andrew Hussey, a former ‘youthful Marxist,’ adds:  “Russia was anyway the most undeveloped country in Europe and it was for this reason that communism took root there.” So reviewer and reviewed are co-thinkers – they both dislike Marx and Lenin.  Only primitives could appreciate socialism, evidently.

Piketty’s work sounds like valuable empirical research.  It has been true for many years that the point of capitalism is the accumulation of capital – to the detriment of everything else.  This should not be news.  But you know what Marxists do with more facts – they make use of them!  His book will be reviewed on this blog in the future.  I want to, right now, review the reviewers. 

The legend of Piketty has now arrived in the U.S.  Although this reticence is breaking down, most left-liberals must make sure they deny, as does Piketty, that they agree with most anything Marx ever said.  Marx is some relic of the past and needs to always be treated as such!  The ‘anti-Marxist’ declaration in each article or book is a pattern that emerges frequently – no surprise here.  It means you are a ‘Very Serious’ person who wants to be taken ‘seriously’ in our very capitalist society, dominated by two very capitalist parties.  (To borrow Glenn Greenwald’s usage.)  No use losing your credibility, or your paycheck, and being tossed into the outer darkness. 

Lynn Parramore of Alternet takes the cake in this regard.  Her post on Piketty is a gem.  Marxists are laughing.  Anarchists are laughing.  Yes, really.

Let’s take the key issue here – that inequality grows under capitalism due to the accumulation of capital.  Capital buys politicians, media, government bureaucrats, a layer of middle-class supporters, repressive forces, think tanks, university departments, military figures and creates corporate oligarchies that work together.  They control the largest corporations who employ the most people in the country.  They ‘own’ the society, almost quite literally.  This is only common sense.  So the more capital they have, the more in control they will be, and that only ‘compounds their interest!’  The cliché ‘ the poor get poorer’ is just the folk wisdom of that issue. 

Marx himself saw the inequality between the classes as fundamental to capitalist society.  He predicted that the working class would become more poverty-stricken as capitalism developed, and hence inequality would grow.  It is even called “the immiseration thesis” by academics.  From “Capital” - 

“Within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker [...] All means for the development of production undergo a dialectical inversion so that they become a means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment, they alienate from him the intellectual potentialities of the labour process [...], they transform his life into working-time, and his wife and child beneath the wheels of the juggernaut of capital. But all methods of the production of surplus-value are at the same time methods of accumulation, and every extension of accumulation becomes, conversely, a means for the development of these methods. It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse.”

— Karl Marx, Das Kapital: Kritik der politischen Ökonomie, 1867.^[1

The time scale for this prediction was not made, but accumulation is at record heights at this time in history.  Nor was this prediction made out of thin air, but upon the most intense study of economic facts.

Some recent American Marxists – economists Paul Sweezy and Paul Baran, who wrote the classic, “Monopoly Capital” in the 50s, refined the same issue. (Book reviewed below, use blog search box at upper left.)   Baran and Sweezy pointed out that capital had so much surplus that they needed to ‘burn’ it through wasteful military spending, among other methods.  David Harvey, another Marxist, just published a book (“The Enigma of Capital”, reviewed below) in which he said that over-accumulation leads to capital investing in massive building projects, also in order to get rid of the excess capital.  Present Marxists at Monthly Review, led by John Bellamy Foster, argue that excess capital has been pumped into the financial sector instead of the ‘productive sector.’ This has been a cause and a result of stagnation in that latter sector, and conversely, a cause of financial bubbles and the strength of the former sector. In a recent Monthly Review there are two stories about the drop in the share of earnings for labor versus capital in the U.S. AND in China.  I.E. inequality is growing between the classes, and this is not confined to one country.  Examples could be multiplied.  All based not on ‘lazy’ thinking, but on financial imperatives, backed up by facts and analysis.  From the reviews it seems Mr. Piketty has done a great job adding to them.

Lets get back to Parramore.  Parramore is incensed that the Republicans are red-baiting Piketty for being critical of capitalism.  Of course, Republicans red-bait almost everything, even a neo-liberal like Obama, so what is the surprise?  His father was a Kenyan socialist, after all.  Why is she so incensed?  Hitting too close to home? 

I quote from Parramore:  “His 700-page book Capital in the 21st Century is certainly not some kind of screed filled with calls for class warfare.”  Heaven’s no. No 'screeds' here.  So shrill!  Let’s wait to see what Piketty’s solution is then.

Again:  Pikety “opens his tome with a description of his typical Gen X abhorrence of what he calls the “lazy rhetoric of anti-capitalism."  Right.  In the U.S. – and even in France - is it ‘lazier’ to be anti-capitalist or pro-capitalist?  The question answers itself.  After being bombarded from birth with the ideological wonders of capitalism, people that absorb what they have been told will do … what?  At present they become, at best, ‘lazy’ capitalist reformers.  Which is exactly what Parramore is.  And notice the generational dig - the dumb-bunny Boomers and the immature Millennials - Gen X is so clever!  We won't get sucked into anything that is not post-modern.  Yeah, after all, you grew up in the immediate aftermath of Reagan and Thatcher.  But wait, there’s more!

Parramore quotes reactionary commentators like the NYT’s Ross Douthat and NR’s James Pethokoukis, who accuse Piketty of Marxism in articles titled “Marx Rises Again” and “The New Marxism.”  She is livid because they want ‘unfettered capitalism.’  Of course, by implication, Parramore wants ‘fettered capitalism.’  As I have asked before, hasn’t that been tried?  It seems that Goliath broke them a long time ago. 

Then she makes the incredible statement that “Income and wealth inequality have not been comprehensively studied to date” until Piketty came along. (She later says it would be a mistake to put him on a pedestal.  Perhaps she should stop building one then.)

Here is the punch line.  What is Parramore’s solution to ‘capitalism’s inherent dynamic’ (towards inequality)?  Parramore agrees with Piketty that it is “only our express intervention, in the form of things like a global wealth tax, investment in skills and training, and the diffusion of knowledge can lead us to a different outcome.”

The U.S. has the richest, most powerful and most well-armed ruling class in history and this is the solution?  Are you kidding me?  Whoa, no class struggle for me – just tax the rich and educate workers, and you’ve got it made.  Intervene!  Is that like talking a drunk into AA? 

So here is where the laughing really starts.  Obama also makes the neo-liberal argument – and it is precisely that – that the ‘education’ of the ignorant, laid-off worker will provide more jobs.  This ‘intellectual capital’ idea – and don’t you love it when your thinking processes are now re-christened as ‘capital’ as if they are trying to colonize your brain too – is the same ‘blame the victim’ strategy they use on almost every social problem.  There are plenty of American IT workers – and yet they hire H-1B visas for cheap.  There are millions of unemployed workers in the U.S. – and yet they hire immigrants because they want to pay less.  There are U.S. companies with jobs – that they locate in China or India.

Laid-off factory or white-collar workers whose firms close are offering ‘retraining’ – which many times doesn’t show up because it is unfunded, or is useless because there are no jobs in the field you are learning.  People with BA’s are crowding out people with only high-school educations in lower-end jobs.  Not sure that is what Parramore means about ‘skills and training.’  Corporations are also unwilling to take on the expense of training people ‘on the job’ – they want people with the exact qualifications they need, and they want the public to pay for it.  Apprenticeships have almost disappeared except in some union shops.  Corporations use technology to make people work faster and harder, and even more efficiently, thus reducing jobs. Productivity has been rising for years under the lash of capital.

As with the issue of poverty or hunger, it is not a paucity of food or a lack of money in the world system or a dearth of education – it is that food is an unaffordable commodity, that money has been hoovered-up by the rich and that even many educated unemployed cannot get jobs – because there are not enough to go around.  And that is called, in Marxist terms, ‘the reserve army of labor.’  It is a permanent feature of capitalism.  These are not optional ‘policies,’ but the very nature of the system. 

It would certainly be good to raise taxes on the wealth of the capitalists, and Marxists are all for that.  (Marx also pointed out that taxes were part of the exploitation of labor by the capitalist state.)  Yet to raise taxes on the wealthy you must build a class-struggle movement that outflanks the Democrats on the left – as the wealthy reside in the Democratic Party too.  This explains why the Democrats even agreed with the Republicans on much of the past tax-cutting for the rich.  “Shared austerity’ is still part of Obama’s agenda – much as it was Francois Hollande’s.  Now they have made timid steps in the other direction, but hardly any progress.  Voting is an inadequate form of ‘intervention’ – and voting for capitalist parties to restrain themselves is almost self-defeating.  

The form of "intervention" would mean 'confiscatory' taxation (as reviews have said about Piketty's views.)  Recent analyses of the amount of carbon that would have to be left in the ground regarding global climate change is in the 'trillions' of dollars.  I.E. both issues would require that the capitalists be partially expropriated.  Can you imagine the present capitalist setup in the U.S. allowing this kind of expropriation? 

Piketty was the advisor to a SOCIALIST in France.  So he’s not exactly outside the circle of Marxist influence, I would say.  Perhaps mom and dad had some impact on the little tyke.  Perhaps the Republicans are on to something?  Being called a “Marxist’ is supposed to make people squeal like a stuck pig, to run like little kids, as if they were gay in Russia, or an atheist in Saudi Arabia or black in America or a vegetarian in Argentina!  Stand up and be proud, Ms. Parramore!  ‘I’m Red and I’m proud.’  Say it.

The French Socialist Party just had an immense rejection by its own base, as Socialist and working class voters stayed home during the recent election.  Mr. Piketty was, and probably still is, a supporter of that party.  The ‘hard left’ in France, as it is called by the soft left of Mr. Piketty, actually proposes class struggle and higher taxes on the corporations.  Something abandoned by the Socialists and reflected in this election.  You will not get higher taxes on the rich or corporations without massive class struggle at this point.  In the U.S. they were brought about by the class struggles of the 30s and 40s, and by powerful union and socialist movements.   

What about the ‘diffusion of knowledge’ – whatever that means?  Since capital now controls the majority of the media oligopoly, the means of communication and is taking charge of the school systems – ‘knowledge’ will be increasingly shaped by capital.  (As it already is now, but in a more subtle way.)  It will actually demand a massive counter-offensive against both parties of capital – who support privatization and religion through charter schools and testing.  Their goal is a society of ‘trained’ people, not educated people.  If that fails, and even if it succeeds, it will need counter-institutions of knowledge, like workers’ parties, organizations of the oppressed, artists, schools (and websites!) to combat the rule of capital’s ideas.  As Marx pointed out in the ‘German Ideology’: 

“  The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force.”

That ‘diffusion’ will not be easy without class struggle.  You don’t even have to be a socialist to support the idea of class struggle. But it helps. Here Piketty and Parramore fall short.

P.S. - Piketty's introduction to his book is far more complimentary of Marx than the reviewers reveal.  A common omission among Americans. 

Red Frog

April 23, 2014