Steven Jonas, MD, MPH[dropcap]E[/dropcap]arlier this year the French economist Thomas Piketty published the English translation of his book Capital in the 21st Century. For a time this 665 pp. apparently densely-written tome amazingly enough ranked No. 1 at Amazon and as of this writing (Oct. 28, 2014) is still ranked no. 224. I must admit that I have not read the book, but I have read a fine review/critique of it that appears in the November, 2014 issue of Monthly Review (the leading Marxist journal in the United States): “Piketty and the Crisis of Neoclassical Economics,” by John Bellamy Foster and Michael D. Yates, pp. 1-24. And thus while I come not to review Prof. Piketty’s book, I will review briefly some of what Messrs. Foster and Yates, Editor and Associate Editor respectively, of Monthly Review, have to say about it.
Prof. Piketty is a statistics-based economist. For years, he has been working on the gradually widening wealth and income gaps in the capitalist world. Conventional, “neoclassical” capitalist economics tells that that the number one function of the system is to “generate full employment,” and that any failures along that line are generally “not its fault” but rather those of “frictions” and “government interference,” as capitalist economists and social critics from Ayn Rand on up or down (depending upon your point of view) repeatedly tell us. The role and function of each individual working in the system is totally dependent upon what they “put into it” in terms of education, effort, and so on, not any external factors, such as the relations of production.
Contrariwise, Prof. Piketty, rather, with tons of data at his disposal, tells us that this is not so. That in its current form capitalism is indeed designed to produce income and wealth inequality as its first goal. As Foster and Yates point out, this conclusion of Piketty, who regards himself as a “neoclassical economist” in the capitalist camp, puts to rest (or stronger) the long-term capitalist myths, that the system, especially if the “free market” is allowed to function without “government interference,” works to the benefit of everybody.
Further, Foster and Yates make it quite clear that both classical and neoclassical economics (the latter being the dominant one in the capitalist world today) rather than being a set of theories upon which capitalism was built, are indeed a set of constructs designed post-hoc to justify the reality of capitalism that Marx and Engels described in their seminal work over the years of the mid-19th century. One can hardly see the mill-owners in Manchester, England or the metal-works owners in the Wuppertal, Germany sitting down to read “Say’s Law” and then deciding, “ah yes, that’s how I’m going to run my business, and I’m going to run my workers into the ground because they just haven’t put enough into it, and I have.”
Piketty, apparently, makes a shambles of “neoclassical” theory, but he would seem to fail in one critical area: the primary function of capitalism is not the accumulation of financial and material wealth. Plenty of rulers during the slave and feudal epochs did that. The primary function is to create capital (gee, who was it who proved that, at great length, with lots of data too?), that is productive resources, to own and create more of it, privately owned, for private purposes. The accumulation of wealth, especially in the modern era when much of the effective moderating force that grew out of the trade union/party movements and their accompanying political parties, that began in the 19th century, have been swept away or co-opted (see the British Labour Party and the French Socialist Party), is simply a by-product of the evermore concerted ownership of the means of production and its concomitant exploitation of the working classes, a truth of course that Marx and Engels revealed way back then.
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[learn_more caption=”Piketty’s book as seen by other social critics”]
A sweeping account of rising inequality… Eventually, Piketty says, we could see the reemergence of a world familiar to nineteenth-century Europeans; he cites the novels of Austen and Balzac. In this ‘patrimonial society,’ a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up… The proper role of public intellectuals is to question accepted dogmas, conceive of new methods of analysis, and expand the terms of public debate. Capital in the Twenty-first Century does all these things… Piketty has written a book that nobody interested in a defining issue of our era can afford to ignore. (John Cassidy New Yorker 2014-03-31)
An extraordinary sweep of history backed by remarkably detailed data and analysis… Piketty’s economic analysis and historical proofs are breathtaking. (Robert B. Reich The Guardian 2014-04-06)
Piketty’s treatment of inequality is perfectly matched to its moment. Like [Paul] Kennedy a generation ago, Piketty has emerged as a rock star of the policy-intellectual world… But make no mistake, his work richly deserves all the attention it is receiving… Piketty, in collaboration with others, has spent more than a decade mining huge quantities of data spanning centuries and many countries to document, absolutely conclusively, that the share of income and wealth going to those at the very top—the top 1 percent, .1 percent, and .01 percent of the population—has risen sharply over the last generation, marking a return to a pattern that prevailed before World War I… Even if none of Piketty’s theories stands up, the establishment of this fact has transformed political discourse and is a Nobel Prize–worthy contribution. Piketty provides an elegant framework for making sense of a complex reality. His theorizing is bold and simple and hugely important if correct. In every area of thought, progress comes from simple abstract paradigms that guide later thinking, such as Darwin’s idea of evolution, Ricardo’s notion of comparative advantage, or Keynes’s conception of aggregate demand. Whether or not his idea ultimately proves out, Piketty makes a major contribution by putting forth a theory of natural economic evolution under capitalism… Piketty writes in the epic philosophical mode of Keynes, Marx, or Adam Smith… By focusing attention on what has happened to a fortunate few among us, and by opening up for debate issues around the long-run functioning of our market system, Capital in the Twenty-First Century has made a profoundly important contribution. (Lawrence H. Summers Democracy 2014-05-01)
It is easy to overlook the achievement of Thomas Piketty’s new bestseller, Capital in the Twenty-First Century, as a work of economic history. Debates about the book have largely focused on inequality. But on any given page, there is data about the total level of private capital and the percentage of income paid out to labor in England from the 1700s onward, something that would have been impossible for early researchers… Capital reflects decades of work in collecting national income data across centuries, countries, and class, done in partnership with academics across the globe. But beyond its remarkably rich and instructive history, the book’s deep and novel understanding of inequality in the economy has drawn well-deserved attention… [Piketty’s] engagement with the rest of the social sciences also distinguishes him from most economists… The book is filled with brilliant moments… The book is an attempt to ground the debate over inequality in strong empirical data, put the question of distribution back into economics, and open the debate not just to the entirety of the social sciences but to people themselves. (Mike Konczal Boston Review 2014-04-29)
What makes Thomas Piketty’s Capital in the Twenty-First Century such a triumph is that it seems to have been written specifically to demolish the great economic shibboleths of our time… Piketty’s magnum opus. (Thomas Frank Salon 2014-05-11) [A] 700-page punch in the plutocracy’s pampered gut… It’s been half a century since a book of economic history broke out of its academic silo with such fireworks. (Giles Whittell The Times 2014-05-07)[/learn_more]
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Nevertheless, Prof. Piketty has produced reams of data on the concentration of wealth, unassailable, one would think (except of course on Fox”News” as analyzed, I’m sure, by their all-round expert economist-scientists-physicians-climatologists like Hannity, O’Reilly and the folks at ”Fox and Friends” [but, I must admit I’m only guessing at that — don’t watch them too much]). And so, even though he apparently doesn’t talk about the central feature of capitalism, the private ownership of the means of production in an industrialized society, one would think that in order to deal with the ever-increasing wealth and income disparities around the world, he would propose some major structural reconstruction, no? Well, no. Prof. Piketty is a) a capitalist and b) a neoclassical economist (or so he regards himself, apparently) who has come up with reams of new numbers to justify his new conclusions about the nature of capitalism. But those discoveries hardly make him want to change it.
“Neoclassical economics (the latter being the dominant one in the capitalist world today) rather than being a set of theories upon which capitalism was built, are indeed a set of constructs designed post-hoc to justify the reality of capitalism that Marx and Engels [already] described in their seminal work…in the 19th century.”
Does he indeed propose to change the relations of production, to change the mode of ownership of the means of production? Well, revealing (surprise, surprise) that he is not a Marxist, he does not. What he proposes, rather, is wealth tax (!?!) In so doing, Prof. Piketty reveals that he not only has no understanding of Marx, he doesn’t have any understanding of Lenin either. (It is, as the song goes, hard to have one without the other) As Lenin described the real world (under any economic system, slave, feudal, capitalist or socialist) it is the ruling class, that is the class that owns and controls the means of production, that controls the State apparatus, legislative, executive, judicial, and repressive. One must wonder then, a) why the ruling class would tax itself in such a way and b) even if it did, why would they distribute the product of such taxation to the benefit of the population at large. Lenin wrote at length on how the ruling class controls the state apparatus. It took Andy Borowitz (who may not even know that he is a Leninist) to boil it down into one sentence: “Midterms Prediction: Billionaires to Retain Control of Government.”
The acclaim given to Piketty’s book in the corporate media and by fellow mainstream economists can only be explained by the fact he is simply not a radical interested in replacing capitalism. He is one of them.
So after all, and after all of the kerfuffling and harrumphing by conventional neoclassical economists like Martin Feldstein, who said words to the effect of “wealth tax [!!]; are you kidding me [?!?]” we can see why the good Prof. Piketty presents no significant challenges to international imperialist capitalism. The same capitalist mythology will continue to be promulgated: that “if you work hard, you can make it too,” that “if you don’t make it, it’s just your own fault,” and that for sure, “poverty is the fault of the poor.” The latter falsehood of course has been around since Elizabethan England and the foundation of the first poor houses, well before any economists, classical or otherwise, had made their appearance. But that doesn’t prevent the corporate-owned Duopolist Party from trumpeting it widely again, going into the upcoming mid-terms.
Just to repeat, classical/neoclassical economics serves the interests of the capitalist ruling class, which appeared long before economists did. Indeed the history of the mercantile capitalism can be traced back to 15th century Venice, if not earlier. The theory was developed to serve the socio/political/economic structures which their interests produce. The theory did not come first, as much as the ruling and the mouthpieces/minions would like everyone to believe that it did. As for class struggle, in Piketty’s presentation, according to Foster and Yates, fuhgeddaboudit. As Foster and Yates state clearly: “Piketty’s acceptability to neoclassical economics is dependent on his avoidance of the question[s] of inequality and power.” And acceptable he is. Which does not mean, of course, that the Left cannot make great use of the great data that he has assembled.
Steven Jonas, MD, MPH is a Professor Emeritus of Preventive Medicine at Stony Brook University (NY) and author/co-author/editor/co-editor of over 30 books. In addition to being a Senior Editor, Politics, for The Greanville Post, (https://www.greanvillepost.com/); he is Editorial Director and a Contributing Author for The Political Junkies for Progressive Democracy (TPJfPD) magazine (http://tpjmagazine.us/); a regular Columnist for BuzzFlash@Truthout (http://www.buzzflash.com, http://www.truth-out.org/); a “Trusted Author“ for Op-Ed News (http://www.opednews.com/); a Contributor to The Planetary Movement (http://www.planetarymovement.org/); and an occasional contributor to the Information Clearing House (http://www.informationclearinghouse.info/), Dandelion Salad (http://dandelionsalad.wordpress.com), and TheHarderStuff newsletter.
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