Capital and Ideology, by Thomas Piketty, Harvard University Press, 1,104 pp, £31.95, ISBN: 9780674980822
At the end of major crises, man-made or natural, the questions that are posed remain very similar: some adaptations to meet particular circumstances are required, but the general thrust of inquiry remains the same. At the most broad, and therefore least precise, level of generalisation they amount to nothing more than a plaintive cry of how did this happen, how did this come about, uttered in low tones of resignation and anguish that suggest there is no answer, and any way it’s too late –the only reality is grief or shock. It was ten years before Robert Graves could write Goodbye to All That, his account of his times during the First World War. We don’t have that much time.
An analogy with war is frequently made to describe the current public health crisis: it is apt to the extent that it captures the scale of present events and the likely levels of fatality; it is inapt in that the present crisis in Europe counts as a natural disaster, not man-made, though the capacity to deal with it is a result of decisions taken over the last decade or so is. But it comes ten years or so after a disaster that was well and truly man-made, the financial crisis that rocked the western world from 2008 on, and the effects of which continue to run through the globalised system of finance and trade and the causes of which have, in the view of many people who know about these things, been inadequately dealt with. And the financial implications of the present crisis are enormous: again, an analogy with a war economy is apt: across Europe, across the world, everything is being mobilised to prevent a near-complete collapse of the very real economies in which people actually live. All of this coincides with a very real and very terrible war that has brought unspeakable suffering to millions of people in the Middle East, and which has being doing so since Western (US and UK) intervention in Iraq in 2003. And all this against a backdrop of global warming. The long- and short-term are forming a conjuncture in a way that suggests that when the present crisis abates, a new world order will have to be negotiated and this time, unlike the Versailles peace conference of 1919, the rest of the world, and not only the dominant Western powers, are going to be well and truly present and staking their claim.
Already, rhetorically, the shade of the economist John Maynard Keynes –who was present at Versailles ‑ is being invoked by people deeply associated with the old neoliberal order as somehow providing a way out of the present crisis. This should tell us something: not that these people can be trusted to have changed their spots in the light of changed circumstances – their economics is most often visceral and instinctual rather than rational and intellectual; how could proponents of a fetishised rational choice theory be other? Rather that Keyneseanism has to be reinvented by every generation: there are no stock answers and solutions waiting to be taken own from the shelf and applied so that, in due course, things can get back to “normal”. And, it will have to be realised, these solutions will have to be tailored to specifically Western circumstances rather than generalised to the planet at large: some of the problems facing the developed economies are present across the globe; how they are dealt with, and when, is a matter no longer in the West’s gift. The urgent matter to be dealt with closer to home, in the view of Thomas Piketty, is the growth of vast and unsustainable inequality in the US and Europe; unsustainable not only because it is deeply anathema to any kind of prevailing idea of justice and decency to be found in these two distinct but related historical and political formations, but because it will sap –is sapping ‑ the vitality from these economies by subordinating them to the marginal needs –whims more like ‑ of a decadent rentier class. A useful definition of a decadent society is one that creates problems it cannot solve: the present housing crisis in Ireland can be seen in that way. But it is not an accident that this should be so: the history of liberal economies is a history of simultaneous excess wealth and dearth; as Joan Robinson put it nearly seventy years ago, “When as a nation ‘we have ever had it so good’ we find we ‘cannot afford’ just what we most need.”
Piketty extends his inquiries beyond Europe, where the growth of inequality is markedly less than in the US, to cover India, Brazil, China and elsewhere, but his work will find traction, if it finds it at all, with the American and European left seeking continent-wide solutions to problems that can only be solved on that scale. Piketty was of course writing before the present crisis, but his work will be read in the context of that crisis and its aftermath: a work written at at least some leisure and at great length suddenly has to be pressed into service to contribute to the analysis of very urgent and pressing problems, the answers to which will shape our world for quite some time to come. And while the war-like conditions of pandemic will impose a certain consensuality –now is not the time to raise dissent will be a constant refrain ‑ the reality is that various forces are already lining themselves to maximise their position in the post-crisis settlement, and some of those forces are very nasty indeed. The blitz in the UK may have been a time when “everyone pulled together”; it was also a time of rampant criminality and profiteering. At this point it is worth saying that much of what Piketty suggests as a template for future reorganisation, as it pertains to Ireland, involves the restructuring of the EU to engage with a real deepening of the federal and democratic nature of that organisation so as to promote social ownership and shared voting rights in firms, while creating and entrenching conditions for temporary ownership and circulation of capital: in short, the creation of a system that challenges head on the present regime of ownership and transmission via inheritance and replacing it with something that has little in common with today’s private capitalism.
It is worth therefore considering what the questions will be in the aftermath of the pandemic, in order to see whether Piketty’s proposals for a reworked Europe can form part of the answers. Will it be possible to mobilise in this direction against a politics already in many places in thrall to forms of xenophobia and racism and an economics that still embraces the orthodoxies of the 1980s counterrevolution? At the very end of his book Crashed, on the financial crisis of 2008 and subsequently, Adam Tooze notes the striking similarity between the questions we ask about 1914 and 2008. These are, he says, how does a great moderation end? How do great risks build up that are little understood and barely controllable? How do great tectonic shifts in the global order unload in sudden earthquakes? How do the “railway timetables” of giant technical systems combine to create disaster? How to anachronistic and out-of-date frames of reference make it impossible for us to understand what is happening around us? Did we sleepwalk into crisis, or were there dark forces pushing? Who is to blame for the ensuing human-induced, man-made disaster? Is the uneven and combined development of global capitalism the driver of all instability? How do the passions of popular politics shape elite decision-making? How do politicians exploit those passions? Is there any route to international and domestic order? Can we achieve perpetual stability and peace? Does law offer the answer? Or must we rely on the balance of judgement and terror and the judgement of technicians and generals? These are the questions that haunt the great crises of modernity. These are the questions that haunt us right now.
To clarify further the contexts in which these questions are posed it is useful once again to turn to Keynes. Keynes is best known as positioning himself as the saviour of capitalism rather than its destroyer, something that would earn him the scorn of the more committed left. Certainly, Keynes said that if push came to shove, he was on the side of the bourgeois intellectuals – he was no socialist. But he was not a defender of capitalism for its own sake: liberal capitalism, like it or not, is the form civilisation in the here and now takes. And once again the liberal capitalist order, as in the post-World War One world in which Keynes developed his thought, is and has been pushing a great many people into relative and absolute poverty, and right now in a context of immanent death: the “unlimited desire” of the few which must not be curtailed forestalls any pursuit of the social interest, thus bringing about conditions that imperil civilisation itself for, as Keynes wrote in 1924, “No man of spirit will consent to remain poor if he believes his betters to have gained their goods by lucky gambling. To convert the business man into the profiteer is to strike a blow at capitalism because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards.” The thin crust of civilisation can be very thin indeed. Nineteenth century liberalism can be seen as an attempt to strike a compromise between a sans culotte “rabble” on one side and Napoleonic tyranny on the other, thus avoiding the worst consequences of both or either. In fact, as Piketty shows in some detail, the sans culottes did rather badly out of the deal, ending up at the end of the nineteenth century somewhat worse off than they had been at the end of the eighteenth. Nonetheless, in the face of the dire destruction of the First World War and the deep immiseration of the slump, the western European working class opted for a Keynesian compromise: they desired not the eradication of capitalism but reforms, what Lenin called the bourgeois politics of the working class. They gave capitalism their “silent consent” in return for corresponding concessions, sometimes substantial, and in doing so rejected the Marxist revolutionary alternative which they had very good reason to mistrust: Stalin and the gulag seemed an even worse option. Right now, I suspect a great many people want to see a reformed capitalism come out of all this in which an “honourable poverty’ or “justifiable inequality”’ prevails over the hideous distortions of a failed present. In the long run, they may aspire to much more, but in the long run, as Keynes famously commented, we are all dead. Right now, a great many of us would feel relieved if we were sure we could kick death into the long run and for a little while just live for the present. Piketty is a self-described socialist, and in a very large book barely touches on Keynes, but he is much closer to Keynes than perhaps he would like to admit. Piketty is the more confirmed democrat, but both thinkers have a faith in technocratic systems of redistribution administered by disinterested experts for the common good.
The French historian Fernand Braudel wrote that there is no history without theory. Piketty brings history, economics and political science to bear on his investigation of inequality. His choice of title for this and his previous bestseller both make use of the word capital. This might suggest an affinity with Karl Marx, but in fact his affinity is with Karl Polanyi, author of The Great Transformation. In his conclusion, he explicitly rejects Marx’s contention in The Communist Manifesto that the history of all hitherto existing society is the history of class struggle. Rather, Piketty contends, the history of all hitherto existing societies is the history of the struggle of ideologies and the quest for justice. The two, as it happens, are not so contradictory: class struggle always takes an ideological form, however expressed, and on both sides of the line an elementary if often incompatible notion of justice is at stake: my absolute right to property trumps your absolute right to a livelihood. Liberalism claims a monopoly on understanding of freedom, unaware that it might not accord with how people in the colonies perceive it: your freedom is not my uhuru. Patronising China on its human rights record looks rather thin when the record of the liberal imperialist powers in Asia is actually examined. In any case, even a basic materialist conception of how ideas work in history merely contends that they only become operative under particular circumstances: da Vinci may have invented the helicopter, but he certainly didn’t build one, hence materialist scepticism of utopianism. Piketty’s intellectuals, I suspect, are also well and truly from the traditional mould, the écoles grande and normale, who understand the workings of the administration and the intricacies of the tax codes and their implementation: like himself, they can engage with vast quantities of empirical information, and assemble it with an emphasis that highlights their particular concerns, in Piketty’s case inequality. Organic intellectuals don’t get a look in: power, I suspect, in Piketty’s state –the French state? ‑ will remain well and truly centralised.
Class, in an era of multiple and fluid identities, can no longer play some preordained historical role: this is surely right, but not particularly novel, though perhaps a little one-sided. During the banking crash of 2008 a BBC reporter in New York went to the café in MOMA to ask some of the customers how this would affect them. One rather pleasantly-spoken young man looked up from the table and replied “It won’t. I’m upper class.” Piketty cites novels to exemplify particular social contexts: Balzac and Austen are favourites, Zola doesn’t get a mention. And where is a motor of historical change in all this? For Piketty, the role of historical research is precisely to demonstrate the existence of alternatives and switch points and to show how choices are conditioned by the political and ideological balance of power among contending groups. This is refreshing, but in need of some qualification. People do make their own history, but they do so in circumstances far from their own choosing: the available options at any given moment may be much less than he allows. An overarching faith in committed technocrats rejigging the tax system in alliance with well-informed parliamentarians using their skills to push through the necessary legislation to upend entrenched material power, privilege and ideological hegemony is rather sweet, but not wholly convincing. Everyone who deems radical change necessary must be in favour of a revolution without revolution ‑ no one really wants to see the corpses mounting up on the pavement, least of all at a time like this ‑ but achieving it can be somewhat problematic. An unerring faith in the power of pure reason may have a deep French provenance, but history provides too many counter-examples for it to be wholly convincing. Lenin, while adhering to the class dialectic, sought to overcome this and other problems, not least the tendency of various elements to intellectual lumpenness, by developing a theory and practice of the role of the vanguard: but Marx and Lenin are decidedly “non-U” among the Brahmins at present, and in recent times you’re more likely to encounter Spinoza or Hegel drafted in as champions of the radical cause. Hardt and Negri recommend we –the multitude ‑ live according to the Fransiscan rule, while Geoff Mann thinks suitable compromises must be made to keep the “rabble” in their place (as distinct from ours). Faced with actual revolution, the status quo thinks the status quo doesn’t look too bad. So if not the workers’ paradise, Keynes’s idea of a very short working week while the BBC broadcasts decent concerts as we prepare for visits to the municipal art gallery now has its attractions. Meanwhile, Piketty, in a very neat piece of writing, discounts any idea that we should lodge any faith in religion, Christian, Muslim or otherwise, for the protection of our basic material well-being: they look after themselves first, and are not wholly averse to the idea of other people suffering. After all, they wouldn’t be as rich as they are if they didn’t take in more than they give out. A pious, secular middle class existence may be the best one we can hope for, and consider ourselves very lucky if we get it.
Albert Hirschman presents four types of theses or theories of capitalism successively, each one in some ways a negation of its predecessor: this allows us locate a particular ideology (world view, attempt at some kind of systematic understanding however inconsistent internally) within a generic type. The doux commerce theory of the eighteenth century argued that commerce was a good thing in itself, conducive to a society in which virtue would flourish. In counterpoint, the self-destruction thesis arose: markets lead to a vehement emphasis on individual self-interest which corrodes all traditional values, including those on the basis of which the market itself operates. Alternatively, the feudal shackles thesis seeks to demonstrate that capitalism is riding for a fall, not because of its own powerful, forward moving energy, but because it is restrained by deep residual precapitalist institutions and values. Alternatively, it is argued capitalism engenders calamity when there is an absence of a feudal past: a feudal background is a favourable factor in the development of democratic capitalism. As Hirschman comments, however incompatible the various theories may be, each might have its hour or country of truth: and each of them, separately, was formulated with a specific country or group of countries in mind. Hirschman is also aware that at any given time any given thesis may hold only a portion of the entire truth, and may be complemented by one or several of the others, however incompatible they may initially seem. We might conclude, for instance, that precaptialist forms and values restrict the full development of capitalism, while also bequeathing something of value to it.
Piketty thinks that the political forces exemplified by Ronald Reagan and Margaret Thatcher, who believe that capitalism must be freed of all restrictions and allowed full vent across all aspects of soiciety, have triumphed over the last four decades to create societies of unspeakable and deeply destructive inequality; they have unleashed the forces that will ultimately destroy that which they sought to create, and done so at terrible human cost. In a review of this length it is impossible to distil multiple and complex arguments supported by deep empirical data into a single essence: to attempt to do so would be to do both the book and the reader a disservice. The sheer breadth and depth of Piketty’s work precludes cutting to the chase. AG Hokins has said that historical understanding expands by engaging in changes of emphasis: by looking at things that have hitherto been obscured, wilfully or through oversight and lack of imagination, new forces may be uncovered and new significance unearthed. One of Piketty’s concerns is to view long history through the prism of inequality: how do inequality regimes justify inequality, as every such regime must. How is it intensified or mitigated in any particular time and place? World history can be written: CA Bayly and Jorgen Osterhammel, for instance, have both produced good examples. But Piketty, to my mind ranges too far and too wide, and frequently, too frequently, tells the reader that he will have more to say about something later, or will come back to it later; a voice saying no doubt you will Thomas, no doubt you will, began to recur in this reader’s head. A book which is above all seeking to make an intervention in contemporary political praxis does not need the sheer weight of evidence presented here. Not least when that can now be made available to those who want it by putting it online And by stretching himself so wide he inevitably makes mistakes of fact: of themselves, these don’t matter in the way they would in a monograph –the sheer torrent of information keeps the argument going in one direction, but overgeneralisation can also lead to banality. All this can look sloppy in a book published by Harvard University Press, as do the occasional typographical errors.
Eoin Dillon works on the history and theory of the African state.