Not As Advertised

 “Time for Socialism – Dispatches From a World on Fire 2016-2021,” by Thomas Piketty

Piketty rose to fame through his data-driven book on inequality, Capital in the 21^st Century. His focus is on inequality again . As he says: “History shows inequality is essentially ideological and political, not economic or technological.” He comes out for a “new form of socialism, participative and decentralized, federal and democratic, ecological, anti-racist and feminist.” Perhaps one can sense from these phrases that his politics are somewhat vague, social-democratic or Utopian. Lets see how they play out.

In this series of short, bite-sized essay / blog posts, Piketty switches between wonky left social-democratic suggestions on how to improve capitalism and criticisms of bourgeois methods and politics. Piketty repeats his statistics that show inequality has gone down since the early 20^th Century due to the mysterious arrival of the 'welfare' state, which in France went down further after May 1968. Most of his focus is on Europe and secondarily, France, and much of it is on taxes.

Wonky Suggestions: He thinks 50% of the population still has no real wealth, so he proposes giving each person an inheritance of apx. $160K at age 25, paid for by higher taxes on corporations, wealthy individuals and large inheritances. He hints at states increasing their public property ownership to avoid increasing debt, but does not call for a state bank or nationalizations. He has a series of ideas on how to reduce inequality in France, especially in regard to improving the tax code. This means opposing Macron's approach which involves weakening the wealth tax. He advocates more seats for workers on company boards (now mandated at 1 in France) and against new laws that make it cheap to layoff workers. He adopts the position of the Yellow Vests as to cancellation or limiting of the public debt. He opposes the French government's idea that the retirement plan should reproduce inequality. This is reflected in the current mass demonstrations against raising the retirement age.  Many working-class people die before the rich or upper middle-classes, which means their contributions are funding wealthier people's retirements.

In response to Brexit and the growing disenchantment with internal EU inequality, Piketty and other intellectuals came up with a 'Manifesto for the Democratization of Europe.' It is based on 4 taxes on corporations, wealth, the rich and carbon emitting, to be voted on by a “sovereign European Assembly.” This Assembly would incorporate 80% of the serving members of present national states and 20% of those in the present European Parliament. If Germany, France, Italy and Spain adopt it, that is 70% of European production.

Criticisms of Capitalist Economic Methods: Piketty slams the IMF for gauging inequality by looking at income, not wealth and thinking that the 'rate of return' on investment is the rate on sovereign debt i.e. Treasury bill rates, not on the real investments made by the rich or corporations. This hides inequality. He notes that most gender pay equality measures ignore age and the fact that many jobs are not as open to women, producing statistics that also hide gender inequality. He notes that French & German productivity levels are equal to U.S. productivity. This is without the rabid anti-labor bias or use of over-time and lack of time-off in the U.S. Trump continued the standard Reaganite battle to cut corporate and inheritance taxes and succeeded mightily. Piketty has always seen education as the key to reducing inequality, and now the French state is reducing education spending for youth.

Piketty discusses 'money creation' by the ECB, and indirectly addresses the concept of modern monetary theory (MMT). He agrees it might have prevented a more severe depression in 2008-2018, but argues against it as a totalizing monetarist panacea.

Inequality in Europe - one view

Political Issues: Piketty's position on Catalan independence is related to the Spanish tax plan that is not federally-based, but based on region. This leads to separatism. He understands that the EU's unequal north/south divide led to European bankers soaking the Greeks. The unequal east/west divide led to mostly German firms expatriating profits from the former workers' states. He supports 'economic justice' approaches as a way to counter sectarian, nationalist or racist ethnic politics.  He avoids the issue of migrants.

Re other countries, Piketty advocates a coalition of the left against the BJP/RSS government in India. In an essay on China, he sees “the 10% own most / 50% own little” wealth inequality split existing there too. He backs Elizabeth Warren's wealth tax plan for the U.S. and Sanders' attempts at increasing democracy, which is predictable for him. In Russia, the 'flat' tax on ALL incomes is 13%, and there is no tax on inheritance there, nor in China. This allows Russian and Chinese billionaires to pass on their wealth unencumbered. His analysis of Russian balance of payments / trade surpluses suggests massive amounts of cash have been sent out of the country, proof of a kleptocracy. He supports a certain limited variety of internationalism and 'universal values.' Finally, the invasion and riot at the U.S. Capitol put period to European idolizing of the U.S.A.

Piketty notes that “carbon emissions are strongly concentrated among the rich. At the global level, the richest 10% are responsible for almost half the emissions, and the top 1% alone emit more carbon than the poorest half of the planet.” This is why he thinks European 'Greens' who govern with monied centrists will fail. He supports a 'circular economy' through a Green New Deal - which is not really about a circular economy.

As you can see from all these ideas and objections, Piketty has no actual vision of how a socialist society would come about, no transitional ideas, nothing in that realm. His many wealth, inequality and financial charts are certainly of use. To him, the word 'socialism' is in the sense of 'capital with a human face' – if that is still possible! He has many gradualist plans that might help workers, youth and citizens, but that stay firmly within the boundaries of present capital, its states and its laws. In this sense he is a Social-Democrat of the type we have seen before, but perhaps one who is troubled due to the clear erosion of the former degraded Social-Democracy. This has forced him to move a bit to the left by now verbally endorsing 'socialism.'

Prior blog reviews on this subject, use blog search box, upper left, to investigate our 16 year “Pearls Before Swine” archive, using these terms: “Capital in the 21^st Century” (Piketty); “Modern Monetary Theory,” or the words 'France,” “Brexit,”

And I bought it at May Day Books!

Red Frog

February 13, 2023