It is a journalistic convention that any author who writes a doorstopper of a book with the word “capital” in the title must be the heir to Karl Marx, while any economist whose books sell in the hundreds of thousands is a “rock star”. Thomas Piketty’s 600-page, multi-million selling Capital in the Twenty-First Century won him both accolades, but both were wide of the mark. There is nothing Marxist about Piketty’s politics, which are those of a liberal reformer, while his concept of capital is closer to an accounting category (a proxy for “wealth”) than the exploitative force that Marx saw it as.
And despite his unexpected celebrity, Piketty makes for an implausible rock star. In contrast to the suave rebellion of Yanis Varoufakis or the frat-boy know-alls of the Freakonomics franchise, Piketty comes across both on stage and in print as cautious and nerdish. He is fixated on statistics, in particular on percentiles. Not only does he mine them from unlikely sources, such as 18th-century tax records and Burke’s Peerage, he is clearly fascinated by the mechanics of how data came to be collected in the first place. Piketty is a brilliant and relentless anorak.
With the arrival of the 1,000-page Capital and Ideology, the hype has returned. Already, the rightwing press has got in a lather about the book’s suggestion of a 90% rate of inheritance tax. “Thomas Piketty is back – and more dangerous than ever,” declared Matthew Lynn in the Telegraph in September, when Capital and Ideology appeared in France. Perhaps it’s Piketty’s mild manner that disconcerts; or perhaps it’s the matter-of-fact way that he points out that the most prosperous period in US history – 1950-70 – coincided with a top marginal rate of inheritance tax of 80% and of income tax that was even higher.
Capital and Ideology is an even more ambitious book than Capital in the Twenty-First Century. Where the latter focused on inequality trends in western capitalism over the past 200 years, the new book offers a history of almost everything. The chronology begins with a sweeping overview of feudal and other pre-modern economies, and ends with the dilemmas posed by the gilets jaunes. The geographic range is global, adding Brazil, Russia, India and China (the “Brics”) to his previous analyses of Europe and the US. Slavery and colonialism are covered at length.
It is certainly the case that most authors who have taken on a historical task of this scale have been either Marxists or shysters. There’s a good reason for this. Marxists have the benefit of a clear theory of historical change, which helps knit copious quantities of evidence together: “The history of all hitherto existing society is the history of class struggles”, runs the famous opening line of The Communist Manifesto. The Annales School of French Marxism (which must surely count as an inspiration for Piketty, if only in scholarly ambition) seeks historical patterns that are several centuries in the making. As for the shysters, if there isn’t already a TED talk on “what your brain tells us about 1,000 years of inequality”, then someone’s missed a trick.
The point is that in order to find a thread through so much history, it helps to have a theory. But Piketty’s theoretical innocence has always been part of his charm, and no doubt contributes to his mass-market appeal. The closest he’s ever come to an overarching historical mechanism is the formula R>G (return is greater than growth), presented in Capital in the Twenty-First Century as a distillation of how wealth grows faster than income, and why inequality therefore increases over time. Yet even this, he was keen to point out, was simply an observation of available data, and not to be interpreted as a “law” of any kind. Piketty gives us history without a motor, a series of variations in income and wealth that happen because people at the time wanted and allowed them to.
His premise in Capital and Ideology is a moral one: inequality is illegitimate, and therefore requires ideologies in order to be justified and moderated. “All history shows that the search for a distribution of wealth acceptable to the majority of people is a recurrent theme in all periods and all cultures,” he reports boldly. As societies distribute income, wealth and education more widely, so they become more prosperous. The overturning of regressive ideologies is therefore the main condition of economic progress.
There is a risk here in projecting a liberal democratic sensibility back over time, as if every age has been fuelled by a benign Pikettian spirit. It seems to assume the existence of a well-functioning public sphere to determine allocations of property on the basis of reasoned argument and evidence, rather than via domination or opportunism. Economic historians may balk at this, but it pays certain rhetorical and philosophical dividends in forcing us to confront the justice (and lack of it) of various economic models, including our own.
For the bulk of this vast book Piketty maps the dominant “inequality regimes” of the past millennium. “Ternary societies” (such as feudalism) were divided into clerical, military and working classes. “Ownership societies” developed over the 18th century, becoming dominant by the end of the 19th, concentrating income and wealth in the hands of landowning families and the new bourgeoisie. “Slave societies” offered the most extreme model of inequality (Haiti circa 1780 is revealed as the most unequal society on record). “Colonial societies” had various combinations of military power, bourgeois ownership and slavery. Communist and post-communist societies provide a tragic overture in the book, in which the utopian ideal of complete equality produces poverty, stagnation and then the rampant inequality of contemporary oligarchical Russia.
His insistence on looking beyond the perimeter of the liberal west – and confronting some of its worst historical crimes – is admirable, even if it does inevitably involve some broad brushstrokes. But Europe, and France in particular, remain his centre of gravity. Being Piketty, this is less because of some Hegelian belief in Europe’s unique status in world history, and more – like the drunk man searching for his keys under the street-light – because that’s where the data is. That said, Capital and Ideology also serves as an intervention in policy debates that are unmistakably European. It is also a reminder to the current occupant of the Élysée Palace that the French Revolution wasn’t fought for liberté and fraternité alone.
The book’s story of shifting “inequality regimes” within the liberal west partly repeats the account given in Capital in the Twenty-First Century. Despite the avowed egalitarianism of the French Revolution, wealth and income inequality remained high throughout the 19th century, until the first world war. A combination of war and progressive taxation led to dramatic falls in inequality over the first half of the 20th century, setting the stage for the social democratic regimes of the second half.
Evidence on these postwar regimes confirms that very high marginal tax rates are both reasonable and effective. But they had a lurking weakness, which Piketty views as fatal: they accommodated highly unequal access to education. Not only is educational equality the biggest factor in economic development (more so than property rights, he argues), the sharp division between graduates and non-graduates produced political schisms that, by the 1990s, had left the working class electorally homeless.
Piketty’s account of the past 40 years is less a story of capital being unleashed (as most histories of neoliberalism have it) than of progressive ideologies running out of steam. The failure of communism played a crucial role in this, producing a new fatalism about the capacity of politics to deliver equality. Globalisation eroded national borders, while “hypercapitalism” delivered concentrations of wealth not witnessed since 1914. In the context of post-socialist ideological cynicism, the rich have barely mustered any justification for this, beyond tepid appeals to a “meritocracy”. The opacity of their financial machinations (something Piketty finds especially egregious) means they have little need of a public defence anyway.
The result of these postwar trends is that western democracies are now dominated by two rival elites, reflected in many two-party electoral systems: a financial elite (or “merchant right”) that favours open markets, and an educational elite (or “Brahmin left”) that stands for cultural diversity, but has lost faith in progressive taxation as a basis for social justice. With these as the principal democratic options, nativist parties prosper, opposing educational and economic inequality, but only on the basis of tighter national borders. There is a vacancy for parties willing to defend internationalism and redistribution simultaneously.
Piketty concludes with a tentative policy programme aimed at meeting the nativist challenge along such lines. This includes some bold ideas (such as an equal education budget for every citizen, to be invested as they choose), but mostly rests on ideas of participatory governance, progressive taxation, democratisation of the EU and income guarantees that have been circulating on the radical liberal left for decades. Suffice to say that naming such policies is considerably easier than executing them. He might be right that, given the climate crisis among other factors, current levels of inequality cannot long be maintained and new policies will be introduced: he prefers to take an optimistic position, based on the assumption that “inequality regimes” never last for ever. But despite the pearl-clutching of the Telegraph, his “elements for a participatory socialism” are not the most arresting features of the book.
Capital and Ideology is an astonishing experiment in social science, one that defies easy comparison. In its ambition, obsessive testimony and sheer oddness, it is closer to the spirit of Karl Ove Knausgård than of Karl Marx. It alternates between sweeping generalities about the nature of justice and the kind of wonkery that one might expect from the Institute for Fiscal Studies, often in the same paragraph. It is occasionally naive (it will bug the hell out of historians and anthropologists) but in a provocative fashion, as if to say: if inequality isn’t justified, why not change it?
What would drive someone to write a book like this? If Piketty has one core political and methodological belief it is in the emancipatory power of public data: that when people are given sufficient evidence about the structures of society, they will insist on greater equality until they are granted it. Amid the distraction and perpetual outrage of our dysfunctional public sphere, this enlightenment confidence in empirics feels beamed in from another age. It also makes for a unique scholarly edifice, which will be impossible to ignore.
• Capital and Ideology is translated by Arthur Goldhammer and published by Harvard (£31.95). To order a copy go to guardianbookshop.com. Free UK p&p over £15.
