The Chronicle Review

Piketty Envy

What the left gets wrong about the French economist

Brian Taylor for The Chronicle Review

August 18, 2014

One expects the resistance of many on the right to Thomas Piketty’s conversation-setting book about economic inequality, Capital in the Twenty-First Century (Harvard University Press, 2014). But Piketty’s spectacular success has also been an unwelcome surprise for some of his fellow leftists.

Piketty purports to show that capitalism produces inexorably widening inequality. This, complains the well-known Marxist geographer David Harvey, "is, for many of us, hardly news." Indeed, Harvey writes, Piketty’s book reproduces "exactly Marx’s theoretical conclusion in Volume 1 of his version of Capital." For Benjamin Kunkel, writing in the London Review of Books, Piketty’s success presents a puzzle. Only the pathological timidity of professional economists and journalists "can explain why Piketty’s discussion of inequality, a preoccupation on the left for decades, has struck them as such a singular revelation." Piketty has discovered that capitalism generates increasing inequality? We Marxists have been telling you this for over a century!

This response reminds me of a scene in the film The Last King of Scotland. Idi Amin has just made a political blunder. His Scottish doctor helpfully reminds him that he told him not to pursue the course of action that led to disaster. Forest Whitaker’s Amin stares at the doctor accusingly. "You did not persuade me!" he says.

An older generation of leftists, including Harvey, the philosopher Slavoj Žižek, and the literary critic Fredric Jameson, have indeed been telling us for many years that capitalism is on the road to ruin, but the public hasn’t taken much note. The success of Piketty’s book, on the other hand, suggests that many people have found his conclusions convincing. Capital in the Twenty-First Century convinces because Piketty supports his arguments about inequality with two innovative forms of evidence largely neglected by his predecessors on both the left and the right. The first is an unprecedented trove of historical economic data, which Piketty uses to demonstrate increasing inequality due to the long-term tendency of returns on capital to outpace economic growth. The second is a series of literary works, which Piketty uses to reveal the social and psychological consequences of this inequality in its erosion of human dignity.

"The depth and range of evidence Piketty marshals allows him to deliver a devastating blow."

The depth and range of evidence Piketty marshals allows him to deliver a devastating blow to the confidence of many economists that capitalism is a tide that gradually lifts all boats. In the process, he mounts an effective critique of the tendency of economic writers on both left and right to rely on theories and formal systems. Many who were content to ignore the warnings of Harvey and company that our economic system will produce unsustainable levels of inequity find that they cannot ignore Piketty’s.

Intellectuals of all political stripes are using the Piketty phenomenon to project and define their own economic positions. In this context, the tragedy of the Marxists’ Piketty envy is the loss of a golden opportunity to mark the crucial difference between Marxist radicalism and the reformist liberalism of Piketty or Paul Krugman (though Krugman emphasizes the gap in wages over that in family capital holdings).

Writers like Harvey and Kunkel defend against Piketty the wrong part of their radical heritage. After the complaint that Piketty simply repeats Marx, the most common objection by radicals is that Piketty describes inequality without explaining it. This charge is so common that Zachary B. Levenson, a doctoral candidate in sociology at the University of California at Berkeley, has satirized it in a brief Jacobin article, "How to Write a Marxist Critique of Thomas Piketty Without Actually Reading the Book." Point 5 states: "OK, inequality. But then point out that he doesn’t explain it!" Clearly Harvey and Kunkel have read Capital in the 21st Century. But their critique hinges on its supposed explanation deficit. Piketty expresses the mechanism of inexorably increasing inequality with the formula R > G: The rate of return to capital exceeds income growth. Harvey writes: "But a statistical regularity of this sort hardly constitutes an adequate explanation, let alone a law. So what forces produce and sustain such a contradiction? Piketty does not say."

Marx, Kunkel points out, does explain capitalism’s contradiction. In search of profits, owners squeeze increasing productivity out of labor, which enables them to make do with fewer workers. But since profit depends on "the gap between what labor contributes to production and what it receives as income," this process leads to a falling rate of profit. The result is an immiserated mass of workers, stockpiles of unsold goods, and economic and social catastrophe. As Kunkel writes: "In formal terms, Marx’s theory is clearly superior. It proposes a genuine contradiction—capital accumulation undermines itself—and entails a mechanism specific to capitalism: the drive for profits through the exploitation of wage labor."

All things being equal, we prefer a theory that explains more of the world to one that explains less. But all things are not equal. We also want a theory that is robustly supported by evidence. In terms of how much of the world it explains, creationism is clearly superior to evolution. Puzzles and problems that confront evolutionists simply don’t exist for the creationist. We prefer evolution, not because it explains more, but because it is better supported by the available evidence. Piketty’s reluctance to advance explanations that go beyond what his data will support is not a flaw, but a feature.

It is not at all clear, on the other hand, that Marx’s law regarding "the tendency of the rate of profit to fall" can be supported in the same way as R > G. Aware of this, Kunkel points out that Marx himself "attached many conditions and qualifications to the theory." Marx’s confirmation problem doesn’t detain Kunkel for long. What matters for him is not how well a theory comports with the historical evidence, but how much the theory explains "in formal terms."

One begins to suspect that Harvey and Kunkel think the most relevant evidence for confirming an economic theory is Marx’s text itself. Mike Beggs, in his article (also in Jacobin) "Zombie Marx," identifies Harvey as suffering from a kind of "scholasticism ... the need to ground everything in a 140-year-old text." The consequences of this scholasticism for the treatment of literary texts are especially disappointing. Harvey dismisses Piketty’s use of literature, saying his data are merely "spiced up with some neat literary allusions to Jane Austen and Balzac." Kunkel, a novelist, neglects to mention literature at all. Their practice resembles that of critics like Jameson, who read literary works as illustrations of Marxist theory. But Piketty turns to literature for a different form of economic knowledge. He uses novels to delineate the complex ways inequity poisons human relationships. The literature of capitalism offers a potent riposte to the claims of those on the right that complaints about inequality are just symptoms of resentment.

"Too much energy has been and still is being wasted on pure theoretical speculation," Piketty writes. His book challenges both mainstream economists’ faith in untested mathematical models, as well as radicals’ resistance to subjecting Marx’s economic theory to rigorous testing. Marxists can learn from both Piketty’s commitment to historical research and his use of literary knowledge. In claiming that Piketty simply repeats Marx, or castigating him for his divergence from Marx, radicals cling to their faults. In so doing, they blind themselves to the root of Piketty’s difference from Marx.

Today, Marx’s work is perhaps best read not as an explanation of 21st-century economic conditions but as an expression of radical values. Read this way, the profound difference between Marx and Piketty quickly emerges. Piketty dislikes inequality because he believes in equality. Inequality is "potentially threatening to democratic societies and to the values of social justice on which they are based." He finds the prospect of widening inequity "terrifying."

Marx, on the other hand, has no interest in equality. In his "Critique of the Gotha Program," the work in which he most clearly articulated his vision of socialism, he rejects calls for equality as "ideological nonsense." The belief in equality is "stigmatized by a bourgeois limitation." In socialism, each will give "according to his ability," and take "according to his needs."

Marx desires a world transformed far beyond anything Piketty is willing to contemplate. The prospect of increasing inequality strikes Marx not as "terrifying" but as the welcome symptom of capitalism’s demise. This demise will transform the very basis of social life. Marx’s radical values resonate with contemporary discontent far more deeply than Piketty’s work. And Marx articulates a more profound hope for the possibilities of human collective energy. This discontent and this hope are the radical birthright. Proclaimed forthrightly, they will attract some and repel others. But the belief in the final demise of our economic system, and the faith in an unknown future, is an infinitely more powerful resource than the petty scholasticism in which too many of our radicals now traffic.

Read properly, Piketty may yet prove the radicals’ best friend. He is gloomy about the prospects for his own proposal to reform capitalism. Perhaps, in describing the mechanism by which capitalism tears itself apart, he has given us the best evidence yet of the eventual triumph of Marx’s vision.

Michael W. Clune is an associate professor of English at Case Western Reserve University. His books include American Literature and the Free Market (Cambridge University Press, 2010).

Correction (8/19/2014, 4:53 p.m.): We slightly misquoted Forest Whitaker's Idi Amin. The article has been updated to reflect that the character said "persuade" rather than "convince."