Sitemap

Book Review

The Post-pandemic Economic Overhaul Will Take More Than Tweaks

In Capital and Ideology (first published in 2019), Thomas Piketty documents the global rise of inequality and critiques ideas that legitimize it. He builds on his bestselling 2013 book Capital in the Twenty-First Century, which spurred a public debate on growing gaps between the haves and have-nots in Europe and the United States.

His latest work is important, especially because — before the pandemic —magazine The Economist had raised doubts about the extent to which inequality has really been rising. But in downplaying the roles of material interests, structures of production and capitalist dynamics, Piketty’s analysis is concerning.

His argument is that societies always try to justify their imbalances and that the prevailing justification rests on shaky foundations. He argues that differences in wages today are often justified by a “meritocratic fairy tale”, in which people believe that the entrepreneurial earn wealth and those living in poverty simply need to work harder. But, of course, Western societies are not meritocratic. As Piketty demonstrates, discrimination is common — based on status, race, gender and religion. In the COVID-19 pandemic, could our obvious dependence on undervalued work in sectors such as nursing, care of children and older people, grocery provision and delivery shift perception of the extent to which these workers deserve the low wages of their jobs, which are often precarious?

Piketty discusses what he sees as the success of the period of social democracy in Europe and the US in the 1950s to the 1970s when the gap between the richest and poorest was narrower. He notes that most people who voted for social-democratic parties between 1950 and 1980 were workers, but that the vote has since shifted to the educated and middle class. Uneducated workers have thereby largely been left behind, paving the way for phenomena such as the election of US President Donald Trump and the United Kingdom’s referendum on leaving the European Union.

Piketty does not recognize the political battle over ideas in academia, although this could help him to explain shifts since the 1970s, including economics departments squeezing out Keynesian and Marxist perspectives. Instead, Piketty simply draws a sharp line between knowledge production and politics. He labels his own empirical work “rational” and “unbiased”, but his policy recommendations “ideological”.

This is problematic. Economists’ perceptions of their own analyses as being free of ideology often hinder open and democratic debate. The behavioural-economics work suggesting that the United Kingdom should not enter lockdown, which might have guided the UK government at the beginning of its COVID‑19 response, is just one example. In that case, a particular way of seeing the economy — as composed of separate individuals responding rationally to incentives — was presented as an objective foundation for an evidence-based policy that legitimized delays in social distancing. Yet such evidence cannot be considered purely objective, and in this case, it contradicted World Health Organization recommendations.

Piketty makes sweeping statements: he sees ideologies as social constructs with lives of their own, independent of what stakeholders stand to gain or lose. For example, he argues that one of the stated justifications for colonialism was the colonizers’ idea of having a “civilizing mission”; this is true, but the prevailing motivation was, without doubt, the vast wealth to be acquired. Clarity here is essential for understanding the generation of massive global injustice. Similarly, Piketty does not provide convincing evidence that, as he claims, inequality in post-colonial countries such as South Africa is driven by ideas legitimizing chasms in opportunity, rather than, for example, the stubborn persistence of racist institutions.

It is ironic that Piketty nods frequently to Karl Marx while simultaneously ignoring key Marxist insights about dynamics such as the profit motive, unequal access to and ability to develop technology, and labour-squeezing cost-cutting. At times, it seems that Piketty simply equates capital with wealth, because he focuses both his analysis and his policy recommendations largely on wealth transfers. For example, rather than interrogating how we as society work, produce and consume, his solutions are biased towards redistribution without changing the core of the system.

This limits his capacity to explain global phenomena. This is clear in his view on the effects of trade liberalization: rather than exploring how the removal of barriers to imports in the 1980s led to a collapse of industry in the global south, Piketty focuses on the loss of income from tariffs. In the same vein, his proposals shy away from discussing the massive rebalancing of global finance and production that is necessary; instead, he focuses on aid transfers to governments and taxation.

His policy proposals don’t challenge our reliance on capitalist growth. Rather, they involve adjustments to the existing order, such as redistribution and the inclusion of employees on company boards. Therefore, the worry articulated in the United Kingdom’s most right-leaning quality newspaper, The Daily Telegraph, that Piketty is back “more dangerous than ever”, because of his vilification of entrepreneurs and billionaires, is in my view unfounded.
Despite its shortcomings, this book does have the potential to start an important debate about how to restructure society in a more egalitarian and ecologically sustainable way.

Related Articles

The Ecological Transition Is The New Mission For Europe

The Green Deal, which aims to achieve climate neutrality in the EU by 2050, could go a long way towards resolving geographical divisions and...

Human Resource Surveys

COVID-19 – The Greatest Learning Experience Of Our Lives

The Coronavirus is accelerating one of the biggest business transformations in decades. Yes, it’s a health crisis, but for most companies, it’s also an...

Nikolina Janković, Assert

Talent Assessment In The Service Of Human Resources Optimization

Faced with the dynamic market situation caused by the health crisis, organizations need to review their investments in an adequate way and with optimal...

Vladimir Marić, Director of the Intellectual Property Office of Serbia

Regulations Serving Intellectual Work

Dostoevsky once wrote that “it's always interesting to talk with an intelligent man”. I was fortunate enough to build my professional career alongside top...

European Parliamentary Research

Is 5G Technology Bad For Our Health?

The fifth generation of telecommunications technologies, 5G, is fundamental to achieving a European gigabit society by 2025. The aim to cover all urban areas,...

Amancio Ortega

World’s Largest Fashion Clothing Retailer

Amancio Ortega, the founder of clothing retailer Zara, is the sixth-richest person in the world, according to Bloomberg. The 83-year-old Spaniard is worth an...

After the Pandemic The Office Dress Code Should Never Come Back

Most workplaces have at least some kind of dress code, and for many of those who greet customers and perform service jobs, a specific...

Romanian contemporary art

Transition, Trauma And The Cluj Connection

For several years now, Romanian painting has been touted as the new big thing. The contemporary art world is, of course, constantly awash with...

More...

Explained: Most Famous Missing Artworks Of The World, What Is Known About Them

From Nazis to Sicilian mafia, disparate groups have stolen art across the world, and across centuries. Believed to be missing for 60 years, late acclaimed...

10 German Books You Have To Read Before You Die

These ten novels, ranging from the late 19th century to the last couple of years, are modern German classics. Earning international acclaim, each one...

Ten Most Expensive Paintings Ever

Can you think of a world in which there would be discounts on works of art? It’s so unreal that I find it hard...

Artistic director, curator and selector BITEF

Ivan Medenica: On The Edge Of The Future

“We considered it necessary to give our all to nonetheless create a sample of the festival this year, to come up with a three-day...

News

Belgrade Galery Shoping Center Opened Within The Belgrade Waterfront

The opening of the Belgrade Waterfront Galeria mall, reported to be the biggest in the region, was attended by...

Oxford Covid Vaccine Works In All Ages, Trials Suggest

Covid vaccine being trialled by Oxford University and AstraZeneca offers hope for all age groups One of the world’s leading...

Parliament Adopts Law On Ministries

National Assembly of the Republic of Serbia adopted the Law on Ministries, which created the conditions for the formation...

Presentation Of MICS 6 Results

New data on the situation of women and children in Serbia show progress in key areas, including breastfeeding and...

European Day Of Justice: Further Efforts Taken To Strengthen The Independence Of Judiciary In Serbia

On the occasion of the European Day of Justice – 25 October 2020, the Council of Europe Office in...

Belgrade Galery Shoping Center Opened Within The Belgrade Waterfront

The opening of the Belgrade Waterfront Galeria mall, reported to be the biggest in the region, was attended by...

Oxford Covid Vaccine Works In All Ages, Trials Suggest

Covid vaccine being trialled by Oxford University and AstraZeneca offers hope for all age groups One of the world’s leading...

Parliament Adopts Law On Ministries

National Assembly of the Republic of Serbia adopted the Law on Ministries, which created the conditions for the formation...

Presentation Of MICS 6 Results

New data on the situation of women and children in Serbia show progress in key areas, including breastfeeding and...

European Day Of Justice: Further Efforts Taken To Strengthen The Independence Of Judiciary In Serbia

On the occasion of the European Day of Justice – 25 October 2020, the Council of Europe Office in...

Belgrade Galery Shoping Center Opened Within The Belgrade Waterfront

The opening of the Belgrade Waterfront Galeria mall, reported to be the biggest in the region, was attended by...

Oxford Covid Vaccine Works In All Ages, Trials Suggest

Covid vaccine being trialled by Oxford University and AstraZeneca offers hope for all age groups One of the world’s leading...

Parliament Adopts Law On Ministries

National Assembly of the Republic of Serbia adopted the Law on Ministries, which created the conditions for the formation...

Presentation Of MICS 6 Results

New data on the situation of women and children in Serbia show progress in key areas, including breastfeeding and...

European Day Of Justice: Further Efforts Taken To Strengthen The Independence Of Judiciary In Serbia

On the occasion of the European Day of Justice – 25 October 2020, the Council of Europe Office in...