A CRITIQUE OF THOMAS PIKETTY’S ‘CAPITAL IN THE TWENTY-FIRST CENTURY’ – 12

CONTAINING CAPITAL – 12

PRASANNA K CHOUDHARY

8. THANK YOU MR PIKETTY

A book must be the axe for the frozen sea within us.

Kafka.

 

Thank you, Mr Piketty for unequivocally drawing attention to certain realities (substantiated by data spread over two centuries) that provide enough lessions for emerging economies. Of course for India too where the ruling dispensation, backed by the Chicago school enthusiasts, is pushing through a spate of neo-liberal reforms in the interests of the top centile, accompanied with a regressive, divisive Hindutva agenda. I have already quoted many passages from the book, still some more may be the best way to end this critique:

  • The distribution of wealth is too important an issue to be left to economists, sociologists, and philosophers. It is of interest to everyone, and that is a good thing. The concrete, physical reality of inequality is visible to the naked eye. ..Democracy will never be supplanted by a republic of experts – and that is a very good thing. Classical political economy was born in England and France in the late eighteenth and early nineteenth century, the issue of distribution was already one of the key questions. ..Whenever one speaks about the distribution of wealth, politics is never very far behind, and it is difficult for anyone to escape contemporary class prejudices and interests.
  • One conclusion is already quite clear; it is an illusion to think that something about the nature of modern growth or the laws of market economy ensures that inequality of wealth will decrease and harmonious stability will be achieved.
  • There is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently. ..In any event, it is important to point out that no self-corrective mechanism exists to prevent a steady increase of the capital/income ratio, together with a steady rise in capital’s share of national income.
  • The very notion of individual marginal productivity becomes hard to define. In fact, it becomes something close to a pure ideological construct on the basis of which a justification for higher status can be elaborated.
  • Today, in the second decade of the twenty-first century, inequalities of wealth are close to regaining or even surpassing their historical highs.
  • The world to come may well combine the worst of two past worlds: both very large inequality of inherited wealth and very high wage inequalities justified in terms of merit and productivity (claims with little factual basis). Meritocratic extremism can thus lead to a race between supermanagers and rentiers, to the detriment of those who are neither.
  • The fundamental force of divergence, which has nothing to do with market imperfections and will not disappear as markets become free and more competitive. The idea that unrestricted competition will put an end to inheritance and move toward a more meritocratic world is a dangerous illusion. The advent of universal suffrage and the end of property qualifications for voting, ended the legal domination of politics by the wealthy. But it did not abolish the economic forces capable of producing a society of rentiers.
  • New forms of organization and ownership remain to be invented.
  • Real democracy and social justice require specific institutions of their own, not just those of the market, and not just parliaments and other formal democratic institutions.

 

Thank you Mr Piketty.

[This critique is divided in eight parts, tentatively titled as: i. Apocalypse and Exuberance; ii. Data and Dialectics; iii. Capital Social and Self-Expanding; iv. Wealth Inherited and Created; v. Century Twentieth and Twenty-First; vi. Yes Marx No Marx; vii. London Chicago Paris; and viii. Thank You Mr Piketty.]

October, 2014.

CONCLUDED.

****

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