Photo credit: Chris Gambat, The Phoblographer
THOMAS PIKETTY’S FIRST ENGLISH BOOK is called Capital in the Twenty-First Century and it was published in 2013. It is by far one of the thickest books I’ve ever held before. I picked it up not too long ago at the library because I heard about it so much; it’s so talked about and so widely renowned-by-influential-thinkers as being the most comprehensive and in-depth piece of modern literature that concentrates on economics that is available today.
Capital outlines many themes other than just income and wealth distribution, but as the title expresses, that is the primary focus. Co-authored with an American economist named Emmanuel Saez, it is a compilation of over 20 years of research focusing on the effects of different national policies which enable the system to accumulate wealth instead of divide it.
Paul Krugman (an American economist currently a professor at the City University of New York and a columnist for The New York Times; he was awarded the 2008 Nobel Memorial Prize in Economic Sciences) described Capital as the French economist’s “magnum opus“; as his masterpiece, his greatest achievement as a writer.
Mr. Krugman also wrote that “He [Mr. Piketty] also makes a powerful case that we’re on the way back to ‘patrimonial capitalism,’ in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent. To be sure, Mr. Piketty concedes that we aren’t there yet. So far, the rise of America’s 1 percent has mainly been driven by executive salaries and bonuses rather than income from investments, let alone inherited wealth.”
And the drift toward oligarchy continues.
The book highlights that we exist (in the 21st-century) in a very important time in human history which is on the precipice of something spectacular and monumental: a revolution of sorts.
Piketty’s book [Capital] is surely the most influential published by an economist in a generation, infuriating the right as much as it delighted an intellectually starved left. Using a mass of data, the book sought to expose why modern capitalism is an engine of exploding inequality: the rate of return on capital exceeds the rate at which the economy grows, he argues, and wealth is becoming ever more concentrated at the top of society.
Mr. Piketty does make some suggestions, some of which he himself calls “utopian,” such as a global tax system which would tackle the growing inequality issue:
In Piketty’s telling, it was only the unique circumstances between 1930 and 1975 that allowed capitalism’s natural drift toward inequality to be reversed. These circumstances included two world wars, a global depression and an outbreak of debt-fueled recession, all of which conspired to destroy vast amounts of wealth. Those years also ushered in government economic policies that consciously set out to redistribute income and economic power while spreading the latest technology to developing countries. Rapid growth in economic output in much of the world reduced the importance of inherited wealth and created a vast new global middle class with wealth of its own.
Nor is it clear, as Piketty asserts, that the only way to avoid a future of slow growth and extreme inequality is through confiscatory taxation. His prescription is an annual global wealth tax of up to 2 percent combined with progressive income tax rates as high as 80 percent. Yet as he acknowledges, the “golden years” were golden because of a complex interplay among laws, regulations, taxes and other restraints on corporate power. If confronted with unacceptable levels of inequality, why would democratic societies in the future be unable or unwilling to formulate a similar set of institutional restraints on capitalism?
Very large corporations in a globalized, technologically advanced world have taken over as the prominent providers (other than governments) — not because major conglomerates are at the center of a conspiracy or anything like that, but because they are more efficient in how they distribute goods and services to billions of global citizens (customers) demanding more than a nation-state could ever handle on its own.
In modernized circumstances, it is very hard to decipher between economics and politics because they are so diluted in what they do for their customers and their citizens. Nation-states are seemingly impotent to the poor within their borders, whom they are decreed to protect and corporations step in to lobby politicians with their great sums of wealth to influence national laws in their financial favor, completely ignoring the deep-rooted issues in particular areas and essentially diverting attention away from regular disparity.
Related on the web:
• You’re not imagining it: the rich really are hoarding economic growth
• Let’s Get This Class War Started
A CORPORATION LOOKS TO INCREASE ITS PROFITS but it also hopes to provide more and better services in a quicker way to many more people. In doing so, this leaves the poor with more opportunities if they can get to them but it doesn’t create an environment that takes advantage of the lower class struggling to conform to thrive globally. This broadening of their market to more customers around the world — their growth — has in part, left the role of the nation-state unnecessary but still vital in how things are done.
The role of the representative in government in a connected online world is not more profitable anymore and other streams of communication such as social media and national websites — through direct democracy rather than representative democracy — will consolidate the old-world forms of legislation instead.
What sort of world will come about when we do not need governments, borders, capital cities, elected officials, senators, national leaders or unilateral-multinational organizations to facilitate our most fundamental needs and tasks as a greater society which is made up of thousands of different civilizations? I guess we’ll have to wait and see.
During Russel Brand’s podcast called Under The Skin (to be specific: episode #39 entitled Beyond Conspiracy – The Terrifying Truth Of Corporate Power,) the journalist and broadcaster Jacques Peretti goes over that he once interviewed Mr. Piketty and he said that:
We could have a revolution…
Thomas Piketty @ 17:20
Then Mr. Peretti asked, “In what way are we going to have a revolution?” Because, as he notes, that we should look at previous revolutions: they were on an economic rise where you had a prosperous middle class demanding more — this includes the Russian revolution.
Mr. Piketty responded with, “What we have now is a potentially combustible force of a middle class who are disenfranchised from what they believe they are entitled to from the last 40 years, plus a huge underclass of people who literally cannot exist and that together is a recipe for revolution.”
Mr. Peretti then brought up that Adam Curtis also said in his film Hypernormalisation, “We’ve normalized the catastrophe and we accept that as part of the cycle.”
The world’s 500 richest people have increased their wealth by $1tn (£745bn) so far this year due to a huge increase in the value of global stock markets, which are likely to finish 2017 at record highs.
The big increase in the fortunes of the ultra-wealthy comes as billions of poorer people across the world have seen their wealth standstill or decline. The gap between the very rich and everyone else has widened to the biggest it has been in a century and advisers to the super-rich are warning them of a “strike back” from the squeezed majority.
The “potentially combustible force of a middle class who are disenfranchised from what they believe they are entitled to” and the “huge underclass of people who literally cannot exist” that Mr. Piketty suggested are together the ingredients for change and disorder that is eventually coming for the elites and the upper class if this unethical hoarding of wealth continues. This isn’t the end, it isn’t even close. We’re only starting to see what sort of world is waiting when only a handful of people have enough money to buy out our entire livelihoods.
Reality, however, isn’t as intractable as it may seem. As dark as economists may be, as ridiculous as politicians may be, as quiet as billionaires may be, and as loud as the working people may be; we’re all here working towards something that is cataclysmic.
Should that monumental event shift to the left or to the right depending on how it treats the rich or the poor will rely on how we use the internet that connects us more than it divides us, and ultimately how we talk to each other about the issue of income and wealth distribution in a more productive and new kind of way.