When Thomas Piketty’s Capital in the Twenty-First Century burst upon the American scene in 2014, its author was most often compared to Tocqueville.footnote1 Here was another Frenchman with a panoramic historical vision, holding up the mirror to give Americans a new image of themselves—but this time, to reveal not a vibrant democracy but an alarming income gap. Piketty’s work crystallized liberal discomfort in the trough of the financial crisis, but also gave its readers reason to congratulate themselves for acknowledging the true importance of inequality. For Paul Krugman, it was probably the most important economics book of the decade; Americans would never talk about wealth and inequality in the same way again. For Rana Foroohar, too, it was ‘the economic tome of our era’. For the Nation, it was the most significant study of its subject for half a century. Martin Wolf deemed the book ‘extraordinarily important’. Lawrence Summers thought its treatment of inequality was perfectly matched to its moment; Piketty had rightly been proclaimed a rock star of the policy-intellectual world, and his work was richly deserving of such attention.footnote2 David Graeber (according to legend) had already mined Piketty and Emmanuel Saez’s suggestive use of irs data on top-income percentiles to supply the insurgents of Occupy Wall Street with their slogan, ‘For the 99 percent’.
There were criticisms. Piketty’s argument was based on the hypothesis that the rate of return (r) on capital investment tended to be greater than the rate of overall economic growth (g). In the now famous formula, r > g had obtained throughout most of human history. As the income from capital outpaced the income to labour, which closely tracks the rate of growth, and with the largest fortunes growing fastest, inequality would rise—potentially without limit. How then to explain the falling levels of inequality between 1918 and the mid-70s? This was a result of external shocks: the destruction wrought by two world wars and the Great Depression cleared the way for an exceptional thirty years of relatively high growth, high taxation and low inequality after 1945, in which g temporarily exceeded r. The tension between the explanatory force of Piketty’s two arguments—the first a ‘law’ inherent to capitalism; the second turning on political and economic ‘shocks’ that defy its writ—also figured in the final prescriptions of the book, which called for a global progressive tax on wealth before dizzying levels of 21st-century inequality could trigger ‘a violent political reaction’.footnote3 While the libertarian right called Piketty a communist, the left pointed out that his explanation for the advance of equality in the mid-20th century ignored the rise of organized labour in mass workers’ parties and trade unions. With data drawn mainly from tax returns in France, the uk and the us, Branko Milanović noted, Piketty ignored the evidence supplied by household surveys; nor was it clear that his findings could be applied to high-growth China and India.footnote4
The arrival of Piketty’s latest work, Capital and Ideology, prompts a comparison with another French thinker, who also won widespread fame for a generic attack on inequality published at a time of profound economic crisis. In 1840, Pierre-Joseph Proudhon’s What Is Property? rebutted claims that the answer ‘It is theft!’ was the signal for another 1793. The proposition should be ‘recognized as a lightning rod to shield us from the coming thunderbolt’, he wrote, just as Piketty hoped his warnings that rising levels of inequality in the 21st century could be incompatible with democratic values would produce tax reforms to fend off violent upheavals comparable to those that put an end to the Belle Époque.footnote5
Mutatis mutandis, of course. For the journeyman printer, born into a family of Besançon peasants and small-traders, going barefoot to school, read: the son of ex-Trotskyist soixante-huitards, growing up in the leafy Parisian suburb of Clichy Hauts-de-Seine. For La Voix du Peuple, the World Incomes Database; for imprisonment at the Conciergerie, chairs at the lse, Berkeley and ehess; for the people’s bank, the global tax on capital. Proudhon’s pamphlet was also a slower burn than Capital in the Twenty-First Century. It took two years before scandal, prosecution and counter-polemic elevated What Is Property? to international notoriety, hailed as a ‘penetrating work’ in Marx’s paper, the Neue Rheinische Zeitung. When they met in Paris, the young German radicals did their best to educate Proudhon in political economy and the dialectic. In response, six years later, he produced the two fat volumes of his System of Economic Contradictions, or Philosophy of Poverty—drawing from Marx the stinging Poverty of Philosophy. Later, Marx would laughingly chastise himself for having infected Proudhon with Hegelianism—‘for his “sophistication”, as the English call the adulteration of commercial goods.’footnote6
Six years after Capital in the Twenty-First Century, Piketty now presents his thousand-page Capital and Ideology as addressing the main criticisms levelled against his earlier work. In some respects, Piketty’s ‘sequel’ seems poised to land at an auspicious moment: in the 2020 Democratic primaries his proposal for a wealth tax was taken up by Warren and Sanders. Calls for the Biden Administration to follow suit have now gone mainstream.footnote7 But in seeking to ‘clarify’ the way inequality has ‘evolved’, Piketty’s latest tome departs quite dramatically from his previous account. The greatest shortcoming of Capital in the Twenty-First Century, he now writes, was to treat political and ideological changes as a ‘black box’. It was also overly focused on the rich world.footnote8 In Capital and Ideology, r > g has all but vanished, and the role of violent ruptures in recalibrating teetering wealth and income differentials is rejected outright. What has taken their place?
Capital and Ideology unfolds a typology of ‘inequality regimes’ on a Weberian scale. Piketty’s starting point is the hypothesis that every society must justify its inequalities, otherwise its entire political and social edifice stands in danger of collapse. Dominant narratives, though always contested, bolster the legitimacy of the ‘inequality regime’. His subject here is the historical transformation of these regimes, which he hopes will shed light on our present impasse. Tax schedules, inheritance records, legal property codes, examination systems and political-participation rates supply the evidentiary core of the book, supplemented by readings from novels and films (Balzac and Austen once again loom large). Rejecting conservative notions of ‘natural’ social inequality, Piketty also dismisses what he describes as the Marxist approach, in which ideology is the superstructural expression of economic forces. Rather, ‘the political-ideological sphere is truly autonomous’.footnote9 He warns insistently against ‘determinism’, which cannot account for the sheer political diversity of societies at similar stages of technological development: ‘alternatives always existed—and always will.’ ‘Switch points’ and ‘alternative pathways’ form a leitmotif in the comparative survey of ideological formations that follows.
Piketty opens with a model of three ‘estates’—nobility, clergy, commons—derived from European feudalism, which characterize what he calls ‘ternary’ societies. Here, regalian functions of justice and legitimate force are inseparable from control of property. Justificatory narratives of inequality are ‘trifunctional’, based on the idea that each of the three social groups fulfils a specific function and that this tripartite division of labour benefits the whole community. What interests Piketty is the relative size and weight of these orders: in France, the clergy and nobility combined accounted for just over 2 per cent of the adult male population on the eve of the Revolution, down from 5 per cent two centuries earlier. At this point, nobles owned over a quarter of all land, while the Church held another 15 per cent—or 25 per cent, if the capitalized value of the tithe is included. Piketty finds similar orders of magnitude in other ternary societies: the churches in Spain and Ethiopia also owned around 30 per cent of property.footnote10