With all the furore surrounding Thomas Piketty’s Capital in the 21st Century my aim here is to carry a weekly focus on the book reblogged from For the Desk Drawer. The purpose is modest. There is already in existence some rather excellent coverage and detailed engagement with the book both in the general media and on specific blog sites. I am thinking here of the analyses by Michael Roberts on his blog site; the competing viewpoint or ‘afterthoughts’ of David Harvey; Benjamin Kunkel’s assessment in ‘Paupers and Richlings’ for London Review of Books matched by Knox Peden’s great essay on ‘The Abstractions of History’; or Paul Krugman’s rather different tone in ‘Why We’re in a New Guilded Age’ for The New York Review of Books. My own endeavour is much less ambitious than any of these engagements. It seeks to offer a weekly equivalent to the ‘Pocket Piketty’ provided by Duncan Green. Each week my intention is to carry a blog post that summarises my notes on each chapter in just a few hundred words that can be read quickly. The purpose of these summaries is to produce an interpretative synopsis of each chapter drawn from my more detailed notes.
These interpretative digests will also enable me to formulate my engagement with a reading group on Piketty’s Capital in the 21st Century, organised by Chris Hesketh at Oxford Brookes University. They will also provide a quick précis for teaching purposes at the University of Sydney and through this novel pedagogical exercise conclude with a question each week to be developed in my Department of Political Economy classes on ‘The Political Economy of Global Capitalism’ (linked to the Twitter hashtag #ECOP2613). Such short interpretative digests may thus provide a different and original form of engagement with the book. Without attempting to rival or replace the importance of detailed engagement, these ‘Piketty digests’ will facilitate a quick and accessible read for people ‘on the go’. The posts will be formulated and produced after reading each chapter, in dialogue with the Oxford Brookes University reading group and colleagues at the University of Sydney, rather than polished after completing the reading of the whole book and then subsequently edited; although I may tidy up a little week-to-week. Perhaps these ‘Piketty digests’ will also provoke some wider resonances and points of contact. Here is the eighth ‘Piketty Digest’ on ‘Inequality and Concentration: Preliminary Bearings’.
Chapter 7: Inequality and Concentration: Preliminary Bearings
Kickstarting Part III of the book on The Structure of Inequality, this chapter largely contains further ground-clearing principles on income inequality as a prelude to assessing in more detail, in the subsequent chapters, the empirical conditions of inequality of labour income and inequality of capital ownership — Of significance is Piketty’s notion of patrimonial capitalism or the relative importance of inherited wealth — With a distinct echo from J. M. Keynes and The General Theory of Employment, Interest and Money, it is argued that World War I resulted in the ‘suicide of the patrimonial societies of the past’, or what Keynes would have referred to as the ‘euthanasia of the rentier’ — With respect to income inequality, Piketty is explicitly focusing on 1) inequality from labour; 2) inequality in the ownership of capital and the income to which it gives rise; and 3) the interaction between these conditions — Inequality with respect to capital, Piketty notes, is always greater than inequality with respect to labour not least because of the role of inheritance — However, Piketty highlights that intergenerational warfare has not replaced class warfare, given that the concentration of wealth is actually nearly as great within each age cohort as it is for the population as a whole — Piketty’s goal is ‘to compare the structure of inequality in societies remote from one another in time and space, societies that are different a priori, and in particular societies that use totally different words and concepts to refer to the social groups that compose them’ — Rather controversially, for some, he casts attention to the ‘beauty of deciles and centiles’ rather than the familiar ‘poetry’ of class categories such as noble and serf, or bourgeois and proletarian — This is pithily summarised as “Class Struggle or Centile Struggle?” — ‘How could one hope to compare inequalities in societies as different in France in 1789 and the United States in 2011 other than by carefully examining deciles and centiles and estimating the share of national wealth and income going to each?’, Piketty asks — Through his own abstractions focusing on the inequalities of income from labour and capital ownership, Piketty holds that he can determine whether the “1 percent” had more power under Louis XVI or under George Bush and Barack Obama — The failure to generate historically specific categories of analysis and as a consequence to indulge in transhistorical generalisatons has already been noted in these digests specifically with reference to Chapter 1 — This problem notwithstanding, Piketty notes the significant role of a patrimonial (or propertied) ‘middle’ class as a principal structural transformation of the distribution of wealth in the developed countries in the twentieth century — Today in terms of inequalities of capital ownership the upper decile across Europe own 60 percent of the wealth and in the United States more than 70 percent — Therefore, according to Piketty, the emergence of a patrimonial middle class was an important structural transformation of the distribution of wealth in the developed countries in the twentieth century, in terms of the rise of a propertied middle class, in reducing inequalities of wealth, although these have been less substantial than people would assume — A useful depiction of two worlds of income inequality is introduced in terms of, first, a hyperpatrimonial society (or a society of rentiers) meaning a society in which wealth is very important and where the concentration of wealth attains extreme levels, as the pattern of the Ancien Régime in France and during the Belle Époque in Europe evidences — Second, reference is made to a hypermeritocratic society (a society of superstars) meaning a very inegalitarian society where the peak of the income hierarchy is dominated by very high incomes from labour—or a subclass of supermanagers—rather than by inherited wealth