A review of Thomas Piketty’s “Capital and Ideology”
bostonreview.net
bostonreview.net
As I understand it in the book, property is not, and should not be seen as, a 100% inalienable human right. If it was so, it would be completely fair that slave-owners in Haiti and Santo Domingo were paid to forego slavery, when slavery was abolished. It was seen as a compensation for this new law that reduced the value of their property: slaves. Of course, slaves themselves were not compensated. Since they were the main beneficiaries of this new law, they actually had to pay for it in some cases. This is actually what happened.
In the USA, there were discussions about a similar outcome, but the sheer enormity of the needed compensation made it impossible This was one big reason that lead to the civil war.
This is the kind of weird, morally unacceptable reasoning about property rights that you will run into if you accept property as a all-powerful, unconstestable principle.
I think we ended up with private property because the alternatives have been tried and they are worse (e.g. tragedy of the commons).
https://econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/OstromSJ...
What about other ways of organization for our societies? Transitions are possible.
E.g freedom to roam in the Nordic countries is based on the idea that it is unthinkable that we should allow people's access to nature to be monopolised.
I don't thinl it is all or nothing. Private property is overall a very good idea and principle, and Piketty says that too. But when someone sees property it as inalienable right, at any level, is a problem.
For example, if one person talks about a tax based on wealth, two people can have a healthy disagreement, and discuss how to implement.
But when someone does not event want to consider it... because it would supposedly bring us back to communism dark ages, that is basic ideology in action, not rational thinking.
It is to protect individuals against spoliation by the state or powerful, and even to assert an even more basic right to own property at all. It obviously does not mean that property cannot be taken away from its owner but that this must follow a fair and lawful process.
It's actually a bit of a mess, conceptually and practically.
Property is really not a simple concept. Most people think of it as "Stuff I own" which reduces the argument to "I don't want the government stealing my house or my furniture," which sounds trivially obvious.
In fact all claims on property are complex - see also IP, stocks, and so on - and personal ownership is always a trade-off between individual benefits and socialised/externalised costs. This doesn't just apply to extreme situations like a war economy, or impounding the proceeds of crime - it's inherent in the practice itself.
You won't find much about that in orthodox economics.
Also the folk against the eternal protection of priv prop is not all authoritarian commies. You find them a lot on the left, all the way to the democratic socialists (not to be mistaken for socdems).
Malthus does not stand up to scrutiny.
There's two distinct concepts being confused as one. The first concept is property rights in general. This concept is singular and correlated with the ideas of ownership and territory. This is may be a universal concept and may be a good candidate for designation as a "natural right". The second concept is the classification of what counts as property. This concept is numerous because we have to actually enumerate everything that counts as property.
Slavery is exceptional because it counts people as property. The error is not with the first concept of property but an error of the second kind, an error of misclassification. Owning a farm and working the land is ok. Owning a farm and owning slaves to work the same plot is immoral.
We see this reified during Reconstruction with Sherman's promise of forty acres and a mule. Where former slaves would be compensated by being granted property rights to the land they worked. Property rights were to be their salvation. As we all know that didn't happen. And a century of systematically denying the rights (including property rights) of their descendants (or anyone who looked like them) is the major reason for the disparities between black Americans and other racial groups.
However, quite a few individuals do seem to view property rights as inviolable, and reject the exceptions you enumerated.
At the time of the Founding Fathers, Benjamin Franklin and Thomas Jefferson were in agreement about playing down the protection of property. Franklin saw property as a "creature of society"[1]. This is why they changed the language of the Declaration of Independency to "life, liberty and the pursuit of happiness". The last is not meant to be a stand-in for "property" or "estate," it actually derives from a separate clause in the Virginia Declaration of Rights[2]: "life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety." Jefferson intentionally dropped the property clause in the Declaration of independence, reflecting how he saw property: not an inalienable right.
Entering into the early US, the majority of fiscal revenue was based off of taxing property (there was no income tax). This aligns with Franklin and Jefferson in basically saying that the state has a claim to the property that is possessed by citizens.
[1] https://en.wikipedia.org/wiki/Life,_Liberty_and_the_pursuit_... [2] The Virginia Declaration of Rights was an influence on Jefferson's Declaration of Independence https://en.wikipedia.org/wiki/United_States_Declaration_of_I...
The average person has no ability to connect past and future. Most people, when tested, struggle to connect yesterday with today. Typical people don't save enough, don't plan and don't risk assess. If society gives an inch on property rights as an all-powerful, uncontestable principle then how exactly are we supposed to give people who plan ahead enough power to influence the flow of society?
For example, we're currently facing what is probably a 1:100 year pandemic. There are specialists out there (actuaries, some entrepreneurs, some doctors) who are comfortable with thinking about 1:100 year pandemics. If property rights were truly unbreachable, those people would quite happily build up a strategic supply of masks, tinned food, etc, etc ready for deployment in a crisis. Their families would make out like bandits once every hundred years; we'd be minting people as wealthy as Croesus. They don't do that. Because it would be stupid to. Because in a crisis, property rights break down a bit and it would be quickly identified that they don't 'need' supplies for 100,000 people and they would be pressured to give up supplies at an economically irrational price.
Nigh unconstestable property rights and the ability to act like a bastard in the short term are critical tools for linking the past and the future. Break that at your peril. I know 95% of people don't care about that link as much as they'd like to; but the 5% who use it are the people who accomplish literally all the infrastructure creation and planning. You won't miss it until it is gone; even then most people don't seem to understand what is happening if the communist failures we see every decade or so are any guide.
I would contest the position that so few are able to make that link. Perhaps in the abstract they are not, but many people are able to conceptualize that link in concrete terms through their children. If people see a way that they can ensure a better life for their kids, they will often make the necessary choices to bring that about.
To consider your example, in the current crisis, there are plenty of people who did not link anything from past to present, but who do show up in hospitals evry day, help people and save lives. They have a much bigger impact on society than the smart planner who could link past and present, but they see no rewards for it. Property rights do very little for those people. See how first responders of 9/11 got treated as another example.
I am afraid that incentivising property rights to absurd levels such as protecting slave-owners through compensation, or protecting people stock-piling masks does not do much for society, even in the long run.
There are ways to do it in an organised, moderate, law-abiding, rational and fair way though. To me, using words like "communism" is just a red-herring to avoid a rational discussion.
The same argument would argue that medical professionals could and should ask for much higher compensation in times like these, but they won't, because they're good people who wouldn't use other people's lives as leverage, and because the community backlash to doing so would be insane. It would go on to claim that if medical professionals did make bank in crises like these, we'd have more medical professionals ready to step in in times like these, and that this would save lives. Surge pricing makes surge capacity viable.
The reason the wealthy get wealthier in this country is because they can spend their wealth to motivate society to help them accumulate more wealth. Money is just a coupon that you can redeem by spending it on some form of human productive output. If we give all of the coupons to people who love accumulating wealth, they eventually redeem them all to channel all of human productive output into building more wealth for them.
A true capitalistic system can only work with some form of UBI, to break this feedback loop, and to allow society as a whole to decide where to spend human productive output, rather than just a select group of billionaires.
> The reason those medical professionals aren't paid better is because the money we spend on healthcare is going to pharmaceutical companies and hospitals, which eventually ends up in the hands of the private equity companies that own them.
That's the result, but I think a big part of the reason that this is the case is because society (including the medical professionals themselves) absolutely refuses to let people use human life as leverage for bargaining. If workers cannot use the fruits of their labour as leverage, of course capital wins.
Not society. Just the wealthy. Why do they feel this way? Because that means they don't get that money. They set the rules, and they get to decide what we work on (through funding companies and buying lobbyists).
> If workers cannot use the fruits of their labour as leverage, of course capital wins.
That's why we need UBI, so workers can use their dollar as leverage and the billionaires don't get to decide what we're allowed to work on and what we're not allowed to work on.
This is great point. I see this on social media commentary all the time and wonder if educated elites being merely oblivious or totally asshole about working class concerns.
These people are not ignoring the plights of the poorer working class; they are altogether completely blind of it. They know that 3 million people just filed for unemployment, but they only know about it as an abstract statistic. The human cost is entirely lost on them.
[0] https://crooked.com/articles/we-are-doing-fine-coronavirus/
In a thread on HN someone commented that the 3m unemployment figure was only 1% of the population. I had to take a moment to let that sink in.
It makes me worried about a future dominated by technocrats.
There's nothing uniquely non-empathetic about technocrats.
This would be approximately 3M / 158M [0], or a 1.8% rise in the unemployment rate.
In the 2008 recession, we saw a total unemployment rate of almost 10%, so we'd have to lose an additional 7-8M jobs to get to that level.
[0] https://www.theguardian.com/business/2020/mar/26/us-unemploy...
[0] https://www.usnews.com/news/economy/articles/2020-03-23/fed-...
"So we need to make sure that our economic recovery does not come at the expense of those who can least afford it or who are just getting started in life: Hard-working young people in service industries and retail that are being decimated by layoffs; all those who are hustling to make a living in the gig economy, and those who were already struggling to get by before this crisis, who are drowning in credit card debt or student loans, and who now are in even greater need of a lifeline."
When I scroll further down the page I can see a fundraiser for readers to support "people and communities who are more vulnerable and need extra support during this time" including the National Domestic Workers Alliance, Restaurant Workers Community Foundation, and One Fair Wage. Apparently readers and podcast listeners have contributed about $650 000 which at least from an Australian perspective seems non-trivial.
Finally, one of their most recent articles (I'm going through the articles because I'm not going to listen to the podcasts) on the politics of a pandemic titled "How Democrats Should Navigate Pandemic Politics" talks about the importance of directly supporting workers including with "paid-leave provision that’s much bigger than the one the White House watered down in the initial House bill, along with a broad Emergency Unemployment Insurance provision".
I can't reconcile all this stuff with being blind to it. It looks like the founders of this site were in the white house while the medicaid expansion was passed which, at least from an outside perspective, seems to be the most important legislation of the past few decades for the poorer working class.
Even that article you linked to doesn't seem like a damning indictment. If you read it a bit more closely it's at least partially a joke article where the writer talks about the resilience of the human spirit while writing on the walls in lipstick, getting gum in her hair, and napping in the middle of sentences. If it was a manifesto of values I'd agree with you that a lack of focus on unemployed people undergoing hardship would be notable, but it's not. It's just a joke.
I lean to "oblivious" argument. People inherently see things through their own experience.
Back in the 80s I took some classes that tried to break through the bubble (especially funny that it was MIT where I like to joke "if you don't arrive arrogant they'll beat it into you").* This was just before the CMC machine tools arrived so we were working on WWII surplus Bridgeport mills and the like. And we were sent down (literally in the basement of building 35 IIRC) to work on them under the supervision of the folks in blue who were all polite but also unstinting in their criticism (in my case -- I deserved it!). After a few sessions of this, in lecture we were reminded that "you'll be up in the air conditioned design shop sending prints down for these guys to build. They may only have a high education but they are at lest as smart as you guys, often smarter. If you send something stupid to them you'll hear about it". It was a good lesson.
* This is actually an exaggeration: in my experience nice people continued to be nice. But MIT does have quite a few jerks, not all of them intentionally so.
BUT their upbringing, the media they consume, and the reinforcement of beliefs through their social echo chamber makes it insanely hard to change their "obliviousness", to the point where it's not so innocent anymore - more like willful ignorance.
His first job out of school was at an investment bank. The world of blue collar work was entirely foreign to him.
Part of the problem is the two-party system, which essentially ensures that control remains between the Dems and GOP. This is why so many presidential elections wind up being contests of the least-worst option.
But I do agree with you in that it's an issue.
That does not square with the US electing donald trump.
As an aside, and hoping you find this interesting: Ralph Nader, who was a serious presidential candidate as late as 2000, did embrace exactly that combination ... I believe he claimed that (relatively) open borders were ipso facto anti-union.
Even the corporate VP making half a million dollars thinks she's middle class.
it's more obvious then to see that the 20-80% middle class standard of living has unambigously become more stressed, debt-laden, fearful, and immobile over the last 50 years, while the 1% has become much freer in all dimensions.
we need to bring that back into balance (which is not perfectly equal distributions by the way).
Friedrich Merz, a politician of Angela Merkel's Christian Democratic Union, but purged by her years ago, is trying to become next party chief and chancellor.
He is a board member of Blackrock. A lobbyist, and a successful business lawyer. He owns private airplanes.
Yet, in a much laughed about interview, he claimed to belong to the "upper middle class".
[1] https://www.nytimes.com/2020/02/14/business/france-blackrock...
In a capitalist society, class is determined by ownership of, and your relationship to, capital.
Conversely, except in SV, everyone I know that pulls over $300k thinks they're rich.
The other is highly educated people feeling economically unprivileged and concluding that this now means they are the working class and what's in their interests is what's in the interests of the working class.
Both are misguided. The former leads to patronizing policy, the latter selfish. The best example I can think of for the latter is student loan forgiveness - lots of educational elites have student loans, comparatively little of the working class does.
Well said. I cringe a little whenever I hear a complaint like "we're the first generation who won't be as well off as our parents", usually from educated young adults who've never known what it's like to have your utilities shut off, or not know where your next week of meals is coming from.
I don't mean to trivialize issues like health care costs, student debt, or general economic anxiety; those problems are real, and go far beyond finger-wagging admonitions to "stop wasting money on lattes and experiences". But there's absolutely a conflation by many young college graduates that because they face uphill economic challenges (relative to their middle-class norms), that they must be in the same category as the hand-to-mouth working class. To the extent that creates political solidarity, great; but quite often, it belies selfishness and entitlement, with no awareness of, or gratitude for, much better they have it than the majority of the planet.
(Full disclosure: I have a bit of a grudge against twenty-somethings at the moment, for talking a big game, and then failing to show up to the primaries this year.)
However, depending on the union, rank and file members have lost power and representation.
1.) For the welfare of the worker, social programs, universal healthcare, "standard of living"
2.) Open borders immigration, free trade, outsourcing, and other ultra capitalist policies.
[1]https://www.washingtonexaminer.com/opinion/democrats-double-...
The point is workers elsewhere is equally entitled to support and liberty.
I'm not commenting on whether that's right or wrong, but it certainly suggests that the left favors open borders.
[1] https://www.politico.com/story/2018/07/11/immigration-ice-ab...
So far as I can tell the wish for the abolition of ICE is primarily tied a desire to eliminate an unrestrained, rogue, abusive policing org that's showed serious cruelty and abuses of civil liberties. I'm ok with eliminating ICE since they play such a harmful role such as they exist today, their leadership and members should all be fired with many jailed.
If people were calling to abolish the Border Patrol that could be construed as supporting open borders. Calling to abolish ICE is calling out corruption, abuse, and injustice in our immigration enforcement far from the border.
The borders are policed and enforced by Customs and Border Protection (CBP), specifically Border Patrol.
This is technically true and often-cited, but it's really misleading. Its 'creation' was more of a restructuring.
When ICE was created in 2003, it absorbed many parts of the United States Customs Service (founded 1789), the Immigration and Naturalization Service (founded 1933), and the Federal Protective Service (founded 1971).
Before ICE, the INS was responsible for arresting and deporting those who violated immigration laws.
All this aside, I'm sure we can agree:
(1) there's a correlation between (A) willingness to illegally immigrate and (B) the risk of deportation after crossing the border.
(2) that an increase in illegal immigration without governmental response would more closely resemble the concept of open borders.
The socialist left is against free trade and outsourcing. Period. We are internationalist and support trade with countries that will raise their labor conditions to parity. We also support anti-capitalist struggles abroad.
Except like so much with socialism, the reality and the hypothetical are in stark contrast. You are arguing that in theory, open borders allow for laborers to take their value to wherever it will benefit them the most. But in reality, it not particularly easy for an individual to pick up and move their entire lives, especially when we are talking about distances on the scale of international travel. So the workers who are willing to move end up being those with the least to lose, meaning those who do end up moving are those willing to settle for less.
Say Mexico and the US opened their borders tomorrow. Do you see American laborers taking their skills to Mexico en masse? Or do you see Mexican laborers taking their skills en masse to America? How do you think the value of an American laborer is affected when the labor market gets flooded with supply, many of whom will likely be willing to work for less than their American counterparts?
Given the structural inequalities between USA and Mexico allowing free movement of capital between USA and Mexico enriches USA and impoverishes Mexico.
However, since you asked, yes Mexicans, who have been abused would flood into the richer north. Socialism is ultimately about creating an equal society, not about preserving disparities between the rich and the poor. However, we would need policies to help preserve American's livelihoods, such as a Federal Jobs Guarantee otherwise open borders would be unpopular and damage living standards.
It's worth asking yourself why people born on one side of an invisible line deserve comfort and power and a baby born on the other side does not deserve to walk one foot north and find a better life.
What? I seriously don't understand this. Find what deals? How does it make it harder?
> Nations are fake.
In what sense? Surely, given the opportunity, most people would prefer to live in Sweden as opposed to Liberia. Most would pick US citizenship over, say, Vietnamese.
The most instructive places to look at in that direction are border areas in general, and the Middle East in particular.
Often times when you look at border areas you will see absurd divisions of people who would normally work together. The border between Ireland and Northern Ireland is a strong example.
For the clear negative impact of borders though, the absurd creation of most Middle Eastern countries by British diplomats is one of the clearest examples. The arbitrary lines that were drawn through tribal lands and small fiefdoms, the people left without countries of their own (e.g. the kurds) or brought to power over vast swaths of other people (the Saudis)- it is all as absurd as can be, and has proven as poisonous as expected.
* https://www.nytimes.com/2020/03/08/books/review/capital-and-...
Krugman liked Piketty's previous book (Captail-21C), but concluded this one needed some more editing:
> The bottom line: I really wanted to like “Capital and Ideology,” but have to acknowledge that it’s something of a letdown. There are interesting ideas and analyses scattered through the book, but they get lost in the sheer volume of dubiously related material. In the end, I’m not even sure what the book’s message is. That can’t be a good thing.
Attempted to read antifragile and was hit with a wall of incomprehensible jargon. The thesis of the book seemed appealing but he's too abstract, smells like a hack.
He is right that Piketty's first book is probably just worth it for the introduction and most non-economists never read the rest, but if he cant get through A Brief History of Time then he's got other problems. Hawking made that book very readable and accessible!
But I still think any account of the woeful separation between the Democratic Party and the common people which ignores the rise of the pro-life movement has to be incomplete. Piketty thus misrepresents those who are concerned about the prevalence of destructive beliefs among the working class:
>“The problem” with the story of a bottom-up defection “is not just that it depends on the notion that the disadvantaged classes are by their very essence permanently racist...”
But racism, while extant, is not the most significant ideological issue that separates the elites from the working class, nor can it reasonably explain their disagreements with Democrat policy -- current anti-racist policy is laughably weak, and elites are not consistently anti-racist. That award must certainly go to religion, not racism.
That an elite who bemoans the disconnection between the elites and the working class could write a book about ideology which largely ignores the predominant ideology among the working class in Western countries is painfully ironic. Ignore this correlation at your peril:
https://www.pewresearch.org/wp-content/uploads/2018/11/FT_18...
One could argue, of course, that the pro-life movement has been cultivated and manipulated for the benefit of capital. But it would be better to actually write the argument. Such a key step should not be left as an exercise to the reader.
From the way it sounds, the program of social democracy nearly destroyed the country. I would take Piketty's nostalgia for those times with a grain of salt.
However, I do believe that any ideas that people want to try because they believe human behavior has changed are guaranteed to fail.
If it turns out that Piketty's history is incorrect, then the past failure of such plans should make us cautious about trying them again.
Also the “social democracy” you talk about is still there. University education is still free. Social democratic programs have not been completely destroyed.
Don't know exactly what you mean by that, but OK.
> You can gather any number of “experts” on any given topic to give you any form of a story you’d like to tell...
Trivially true. Are the arguments sound? Are the basic facts correct? Those are the questions that matter.
> Also the “social democracy” you talk about is still there.
Arguable, but in any case certainly not to the degree it was in the 70's. Why?
> University education is still free. Social democratic programs have not been completely destroyed.
And yet the documentary claims that there is still a very high-level of student debt in Sweden. Not because of the education, but in order to subsist while going to college.
I'm not sure if I'd call that a documentary. The makes describe themsevles as "comedy news show" who are "equal-opportunity offenders":
https://www.wetheinternet.tv/:
> ABOUT US
> We the Internet TV isn't your average comedy news show: we're equal-opportunity offenders with new videos every week on current events, politics, and culture. You might call us a safe space for satire. Or you might call us something else in the comments section. We make fun of everyone—especially you—so don't say we didn't warn you!
https://en.wikipedia.org/wiki/Pomperipossa_in_Monismania
Next election the social democrats lost it for the first time in 40 years.
Sweden today is very different from the 70s, politically.
[1] Not far right as in Nazism, but as in pro capitalism, state intervention is communism (boo hiss!).
Perhaps, but something still has to explain why the nordic countries are considerably less socialist than they were in the 70's.
> That was the time when the nordic countries built their succesful system that's in place today and is widely held in high regard.
The argument in the documentary is that the wealth and success was built prior to the period of social democracy, and that abandoning the system was the necessary step to avoid collapse.
Claiming SD was abandoned is a pretty drastic interpretation. Strong unions, employee representation in company boards, high income transfers and health/parental/pension/unemployment benefits, free education, wide popular acceptance of high taxation, big public spending on culture/public broadcasting/civic education etc is still all there and popular even though the daily political rhetoric is much less red than it was when these were all first implemented. Keep in mind that in the multi-party nordic systems the right of center parties are much to the left of US democrats, even the anti immigration parties aren't attacking the welfare state.
You could say that this is the end goal of SD, it's just the new normal and the pragmatic good solution to running a society, when the system is in place there's less need to have a lot of SD flag waving. People will defend the policies just on pragmatic grounds, without feeling there's ideology involved.
Other nordic countries, like the market economy of Denmark[1]?
> Claiming SD was abandoned is a pretty drastic interpretation.
I think it would be pretty drastic to claim that the political situation has been largely unchanged from the 70s, which is the period of Social Democracy which Piketty is defending.
[1]https://www.investors.com/denmark-tells-bernie-sanders-to-st...
Yes of course things have changed a lot from the 70s, I agree about that, but the strong welfare state is alive and well, though is under attack, and has wide popular support.
My claim is that the Social Democracy that Piketty suggests we return (the kind that was present in the 70s/80s) was rejected by Sweden, and for very sound reasons, and that his positive view of those times should be taken with some degree of skepticism.
https://en.wikipedia.org/wiki/Cato_Institute
Continuing with wikipedia: Sweden is a competitive and highly liberalized, open market economy. The vast majority of Swedish enterprises are privately owned and market-oriented, combined with a strong welfare state involving transfer payments involving up to three-fifths of GDP.[27][28] In 2014 the percent of national wealth owned by the government was 24%.[29]
So again this is not the Soviet type of socialism(which I've lived through) but strong welfare state is definitely part of Sweden.
This means I have to assign this a low-magnitude coefficient of trust (not a high-magnitude negative coefficient[1]).
That means what you're describing could well be true. I just don't know it based on who's saying it.
0: Compare http://web.archive.org/web/20090402090751/http://www.cato.or... with what I knew at the time
1: The classic "There is no gold buried here" is a high-magnitude negative coefficient
Nonetheless, I see what you mean about high vs. low magnitude coefficient trust. Personally, I don't assign a particularly high-magnitude coefficient for Cato either. However, I don't assign a particularly high magnitude coefficient to any economic/political think tank. For two reasons:
1. Economics is not a science in any meaningful sense of the word. There is no empirical process for falsifying theories; there is merely a dialectic. Now, the dialectic can be more or less rigorous, but there is an upper-bound to the level of certainty that dialectic can provide.
2. Everyone has an agenda. This is inescapable when it comes to politics. The best we can hope for is that all parties demonstrate some self-awareness of that fact.
Relative to plenty of other sources, I would say that Cato ranks relatively well. At the very least, they are one of the most respectable libertarian sources, and should probably be taken seriously (even if you disagree with them).
I am a staunch Capitalist and I'd like to see another great era of America ingenuity and invention. I think the path to solve inequality comes from creating wealth and solving big global issues in energy, health and transportation.
[0] There is a debate between Piketty and Marx-leaning philosopher/economist Frederic Lordon in French: https://www.youtube.com/watch?v=dDY3aczWOd0
That weird place is simply social democracy. It seems to be unpopular because it is essentially the "centrism" of the capitalism/socialism debate, and everyone hates centrists these days.
It's much easier (and more historically accurate) to see social democracy, socialism and capitalism on the same axis, and not to think that social democracy transcends all hitherto established political and economic thought by The Right Choice as if by default.
> Socialism is a political, social and economic philosophy encompassing a range of economic and social systems characterised by social ownership of the means of production and workers' self-management of enterprises. [wikipedia]
It may be possible to claim that inequality does not matter. In the absence of poverty that may be possible, but when the richest country in the world (USA) has a health system that leas out ~20% of the population and one of the poorest (Cuba) has a gold plated health system, that is a hard claim to make.
There's a really easy refutation of that point: it is literally impossible over any major span of time, because r is a component of g. If r were to grow systematically faster than g, it would end up dominating everything else, with the result that g = r.
r>g is unstable, and it will collapse.
It should have collapsed in 2008, but capitalism is very resilient and capitalists very resourceful and they persuaded the victims to pay the costs.
Perhaps it will not survive the current pandemic, I fail to see how it can survive the looming environmental collapse, but time will tell.
(By "it" I mean a economic system with r>g)
https://fee.org/articles/the-myth-of-cubas-glorious-health-c...
https://www.nytimes.com/2017/09/29/world/americas/brazil-cub...
https://slatestarcodex.com/2018/06/24/book-review-capital-in...
Go vote. Go work on things that truly matter.
Edit: If you have ideological differences please consider posting a reply rather than just downvoting.
But in the face of power imbalances ineffective.
In effect, forming a network that bypasses the current powers until they disappear.
Billionaires shouldn't unilaterally decide how society spends its human productive output, that should be a decision society as a whole gets to make. How do you accomplish this? Universal basic income would dilute billionaire's ability to control how human productive output is spent, and instead, society as a whole would get to make that decision.
Inflation caused by UBI only hurts one class of people -- billionaires. Everyone else ends up better off, and has more of a say on the direction of human civilization.
such inequities imbalance the power between labor and capital, which then destabilizes the social structures resting on these economic (and political) foundations. power is a highly dynamic, and as a result, a highly destabilizing force. no (static) socioeconomic idealogy (that we've come up with so far) can dominate it, not even capitalism.
and that means we can never truly rest in our vigilence to create and retain the properity, peace and stability that we enjoy only fleetingly.
the balance between labor and capital has tipped wildly and we need to enact measures--progressive and dynamic taxes/tariffs, both removing and enacting regulations, de-monopolizing markets, etc.--to bring it back into balance.
I'm just so exhausted by all the rhetoric, kabuki, ideology, dogma, propaganda. Arguing about the placement of the deck chairs as the Titanic sinks.
The 2nd (with higher inequality) is obviously preferred.
What would make sense to me would be measuring the wealth of the majority of the population (3 middle quintiles) and then bringing up the bottom quintile to an acceptable level with transfer payments.
That reminds me as well, a lot of the inequality measures that you see ignore government transfers. So yes, the Gini would measure employment income, but it's not an accurate picture of actual income at the end of the year.
Is this really obvious to modern left?
My first response was that the lefties (catchall phrase for purpose of this reply) I know fret over fairness. To even frame discussions in terms of power is seen as distasteful and largely avoided.
Then I was reminded that many lefties, especially younger cohorts, talk about privilege. In Ezra Klein's interview with Will Wilkinson, they discuss "white privilege" in terms of power. And power is a topic Ezra Klein is far more comfortable discussing (compared to me).
In conclusion, I mosdef agree that we lefties have a more systems-based view, where the relative power of the belligerents are considered. Further, the themes of privilege, equality, bias, opportunity, fairness (as used by misc lefties sub-cohorts) as rhetoric are really talking about relative power.
We have targets for inflation and employment already, writing a Gini coefficient into law (in my country such thing would go into the Constitution) and forcing the government to chase it would be great.
“What I mean,” Piketty says, explaining his differences with Marx, “is that your class position is not enough to determine your view of what’s the best system of property, education, taxation. We need ideas and ideologies and we need to take them seriously.” (Guardian in Feb). However, that is a trivially wrong mischaracterization. Marx himself was from a relatively privileged background and he, Engels, Lenin, etc have never argued for a mechanical determination of ideology.
In general I think his analysis is that "capitalism should just change some specific things to reduce inequality" without any materialist, political-economic understanding of why inequality is so rampant in the first place - why capital's dominance comes from the structure of the economy. That is why marxism is interesting, marxism makes a very compelling argument for it, and liberals ignore it at their peril.
Economists use the word "capital" without making reference to Marx. Marx didn't come up with that word, it had a meaning in classical economics since Adam Smith (and maybe before).
I think the rest of your post is wrong too. Marx does argue for a "mechanical determination of ideology". For Marx, man is the animal that labors, not a rational animal or a political animal. What matters is what you make with your body. If you labor with your body then you're a proletarian, and you will experience class consciousness from that perspective. If you make money from other people's labor, you're bourgeois, and you will experience bourgeois class consciousness.
I don't know if Marx talks about bourgeois who consider themselves Marxists (like Engels -- Marx was not bourgeois).
> In general I think his analysis is that "capitalism should just change some specific things to reduce inequality" without any materialist, political-economic understanding of why inequality is so rampant in the first place - why capital's dominance comes from the structure of the economy. That is why marxism is interesting, marxism makes a very compelling argument for it, and liberals ignore it at their peril.
This is also bizarre. Piketty does have a theory about "why inequality is so rampant in the first place". He just thinks we can change the laws and fix it!
How does this refute OP's point? They're really just pointing out how absurd it is that a study on wealth inequality and class fails to even consider the Marxist perspective. Genuine scholarly negligence.
> This is also bizarre. Piketty does have a theory about "why inequality is so rampant in the first place". He just thinks we can change the laws and fix it!
OP isn't arguing that Piketty has no theory -- just that it's a pretty naive one. A Marxist perspective understands that "changing the laws to fix it" is not enough. The state is dependent on the bourgeoisie for its survival (see [0]), and will thus bend to their demands. So long as we have no organized and militant labor movements (and labor parties to represent them), the working class will have neither leverage over the state nor the means to enact their demands.
[0]: https://en.wikipedia.org/wiki/Marx%27s_theory_of_the_state#T...
I don't know how to break this to you...but you not everyone accepts the Marxian viewpoint. It's utterly bizarre to speak of "genuine scholarly negligence" when you mean "difference of opinion".
> OP isn't arguing that Piketty has no theory -- just that it's a pretty naive one. A Marxist perspective understands that "changing the laws to fix it" is not enough.
Right, and Piketty says it is. You (and the original poster) have a serious problem distinguishing between disagreement and being wrong.
Not the OP and I must confess that I haven't read anything by Piketty just yet but imho if these are indeed his views then OP seems certainly to be right in saying Picketty only wants that "capitalism should just change some specific things to reduce inequality".
That's also not want Marx really believed in, i.e. he certainly did not believe that we'll all be better off under a different, better form of capitalism. That's what guys like Lassalle [1] believed and what modern European social-democracy really believed too, starting with the 1930s (see the Popular Front in France [2]) up until the 1980s - 1990s (when all modern European social-democracy went into clinical death). Imho the only true heir of Marx that really got to put its hands on the reins of power was Lenin, and it would have been interesting to see how Trotsky would have extended the world revolution outside USSR's borders had be managed to outplay Stalin.
He literally doesn't. He is a materialist in that he doesn't believe in magic or god. He is not a mechanical, deterministic one because he doesn't think there's an obvious 1-1 determination of social structure -> ideology, but instead that the two influence each other in extremely complicated ways even though ultimately everything flows from material reality. This is a pretty basic point and embarrassing to get wrong if you're an economist talking about Marx! And obviously Marx thought Engels could be a communist despite being from a bourgeois background, which is what Piketty is saying Marx has an extremely crude theory of.
> Piketty does have a theory
The other person responded to this but yeah I did not say he doesn't have a theory, but that his theory is flawed in that he thinks "why don't we just change the laws the bourgeois made".
Piketty's summary of Marx is accurate as far as I'm concerned. If you want to show that it's not, please provide some evidence.
The fact that the American left is about as ignorant of Marx as the average creationist is of Darwin just goes to show how deeply capitalist ideology has usurped the US political system.
Piketty articulate what he thinks is wrong with Marx in "Capital in the Twenty-First Century" with fairly compelling arguments.
But I think people who find this sort of thing interesting would find marxism's analysis of the economy much more interesting and convincing. Start with Wage Labour And Capital then try either Value Price And Profit or Capital itself.
Also anyone interested in Marx should take the time to understand the Labor Theory of Value. It's a lynchpin of Marx's analysis, and it's an idea long since thoroughly discredited. Marxism is a house built on sand.
that's quite a claim to make without any backing ("everything is nothing" is not particularly useful).
i've read some of the main critiques [0], but none thoroughly discredits it. yes, the critiques show flaws, but not fatal ones.
so what's the fatal flaw?
[0] https://en.wikipedia.org/wiki/Criticisms_of_the_labour_theor...
The labour theory of value is simply describing the cost of producing something. Whether people are willing to buy it as that price (which would be same as selling it at cost) is an entirely different matter.
beyond market settling times, what the delta between labor value and market value very likely indicates is some sort of mispricing in the market, often due to some external, malign manipulation (i.e., an application of force, or power). efficient markets should tend toward the labor value of production, that is, profits are minimized to that of idiosyncratic risk (like pandemics).
It isn't about what I think. When people make purchases they will typically try to buy as cheaply as possible. If someone is looking to make a purchase they will typically go to whoever is offering it cheapest, if other people want to compete they will either have to offer it at the same price or cheaper.
Are you claiming this isn't true? Because I have witnessed it with my own eyes. I used to work in a Petrol Station we were ones of the cheapest places around and we had a lot of custom.
Other places that were more expensive were empty at the same time on the same days because they were more expensive. There is of course exceptions to this (Head and Shoulders Shampoo being the classic example) but they are outliers.
The same with a labour market. The market rate for a C# programmer is approximately £350-450 a day in the UK. More specialist development roles pay more e.g. Angular JS developers which are typically £500-750 a day (the last time I looked). There is less Angular JS developers that are available (low supply) so to attract talent companies that wish to hire need to raise the rate. However C# developers in the UK are much more common (higher supply) so companies won't pay those high prices.
Are you telling me this isn't happening? Because you can go to total jobs yourself and put C# developer Manchester and you will see difference in market rate yourself.
> beyond market settling times, what the delta between labor value and market value very likely indicates is some sort of mispricing in the market, often due to some external, malign manipulation (i.e., an application of force, or power). efficient markets should tend toward the labor value of production, that is, profits are minimized to that of idiosyncratic risk (like pandemics).
Not true. You are making several assumptions:
1) That there is abundance of said product (high supply).
2) People are wanting or needing to make a purchase.
3) That there isn't other competitors which have improved their processes or paying their employees less.
Number 2 being the most important IMO as everything else is normally equal. If nobody wants to buy it at the cost (or higher) you will be selling it at a loss.
Recently because of panic buying of loo roll, there wasn't any loo roll available in the UK. On Amazon for a 12 pack of decent quality loo roll was selling at 4 times the price of what it would be normally and they became sold out.
You can lament about the ridiculous panic buying. However demand outstripped supply and the price reflected this. In normal circumstances they wouldn't have sold for these prices and people would have had to sell at the regular price.
Oil in some regions of the world literally seeps out of the ground (known as petroleum seep) and until the 19th century it wasn't really deemed to be something of value.
so this seems like a vindication of the LTV as I understand it.
Even if you didn't accept that as realistic. Sure competition would drive down the price. However people would be finding ways to produce it for cheaper. They may pay people less, they might find way of producing it with less people involved.
LTV can't explain any of this. The labour market itself is driven by market forces.
also yes, capitalism drives down the labor cost of things through innovation or lowering workers’ living conditions. yes that lowers their value (labor value) according to LTV. that’s fine and not only consistent with but essential to LTV and results in, yes, lower prices longterm.
two further things. first, yes, LTV doesn’t talk about temporary supply-demand price drops. that’s not the point of it or in its scope or what it’s useful for. that’s fine. it has many other different useful conclusions unrelated to determining the exact price of a commodity at a given time under given market conditions.
second: I mean this in good faith. you have expressed the same misconception a couple times now. Please read Wage Labour And Capital, it’s a short pamphlet written for 19th century working class people. It’s very readable and if after reading it, you still think LTV is invalid, you might be able to express why more clearly. However I think you might be surprised.
EDIT: as a caveat yes cartels can distort this and sell high and collect super profits. but really please just read the source material so I don’t have to go over everything like this! marx is a good writer!
No it isn't. You are constantly using the term value when you should be using the term cost. The monetary value of something is largely subjective and is dependant on whoever is purchasing, the cost of something is objective.
To someone that cycles everywhere the price of petrol is always too high because a bicycle doesn't need petrol.
For example there was Head and Shoulders shampoo. When they first introduced it nobody bought it because it was too cheap. People just assumed it didn't work. When they increased the price people started buying it. Tell me how the LTV explains that? It doesn't.
The LTV doesn't explain the price of Art, It doesn't explain the second hand market. There are all sorts of things the LTV doesn't explain.
> In your hypothetical, the price of oil would nosedive for a while as long as there was over investment in getting it out of the ground that would be wasted if it wasn’t sold low. This is just a higher supply. But at some point, the lower demand for plastics, etc would use that up, leading to a steady state - one in which oil would again be sold at its value, its labor cost. It can’t be sold for less long term because otherwise the people digging it up and selling it would make a loss on doing that.
What happens if plastic is replaced by something else?
> also yes, capitalism drives down the labor cost of things through innovation or lowering workers’ living conditions. yes that lowers their value (labor value) according to LTV. that’s fine and not only consistent with but essential to LTV and results in, yes, lower prices longterm.
Yes that is because the labour market itself is subject to supply and demand. If there was no oil tomorrow, there would be no need to pay for the oil derrick workers. Their worth in that market would be nothing. They would be out of a job.
As I said in another reply here. Go to Total Jobs in the UK (it just happens to be the site I use) and search for C# developer in Manchester. The going rate for ASP.NET developers in £350-450 per day. The rate for Angular JS is £500-750 per day (the last time I looked). Why is that? It is because many companies are building single page applications and there are less Angular JS developers. So to attract talent they have to raise their rates accordingly.
I can program in python. There isn't one single Python job in my area (that is advertised at least). If I knew only Python I wouldn't be able to get a contract because there is no demand for it.
> But at some point, the lower demand for plastics, etc would use that up, leading to a steady state - one in which oil would again be sold at its value, its labor cost. It can’t be sold for less long term because otherwise the people digging it up and selling it would make a loss on doing that.
The materials that produce plastic are a by product of crude oil refinery. So in this scenario plastic would get very expensive to produce, people wouldn't pay for it and manufacturers would just find another material to build things with. If it is uneconomic to drill for oil, they would just stop drilling for oil.
LTV doesn't explain any of this. Market forces do.
> two further things. first, yes, LTV doesn’t talk about temporary supply-demand price drops. that’s not the point of it or in its scope or what it’s useful for. that’s fine. it has many other different useful conclusions unrelated to determining the exact price of a commodity at a given time under given market conditions.
Right so it doesn't explain things accurately. When things aren't accurately described by theory, then the theory is incorrect and must be either modified or you have to find an alternative explanation.
LTV doesn't explain it (as you have admitted). Market forces do.
> second: I mean this in good faith. you have expressed the same misconception a couple times now. Please read Wage Labour And Capital, it’s a short pamphlet written for 19th century working class people. It’s very readable and if after reading it, you still think LTV is invalid, you might be able to express why more clearly. However I think you might be surprised.
I don't think I really need to. You have continually ignored that things are only worth what people are willing to pay for them and haven't addressed it. Additionally you can't seem to distinguish the difference between the price that something is sold for and the cost of its production.
This is ridiculous. Goodbye.
But I will retract and restate. The Labor Theory of Value is taken seriously by Marxists because they require it, but in terms of expert opinion it's long since been rejected. If you don't care about expert opinion and are willing to listen to ideologues then you will find compelling feeling arguments for the whole shambolic mess that is Marxist ideology.
The Labor Theory of Value isn't a single flaw in Marxism, but one of dozens of serious points of incoherence. Marxism is an anti-empirical archaism of the Victorian era. Marxism is built on a dialectic that literally cannot reveal truth. Marxism makes many predictive claims that are false. Russell took apart the contradictions and irrationality of Hegelianism a long time ago and ended Hegelianism in the Anglo-American philosophical world because of it.
If you dropped the constantly condescending hyperbolic anti marxist stuff and made substantive criticisms besides linking to wikipedia this could be a more interesting conversation!
Not really? It has neither been proven nor disproven, not because of unsoundness in theory, but because of lack of ability to measure the data needed to (dis)prove it (http://bnarchives.yorku.ca/308/2/20101200_cockshott_nitzan_b...).
On top of this, sure Marx made some bad predictions, but the breadth of his work was not predicting the future or describing what a socialist economy looks like, but the analysis of capitalism and the social relations that form around it. This analysis is still extremely relevant, regardless of his value theory. Sure some people cling to it and pretend all parts of Capital are still relevant even though things have changed drastically, but that doesn't negate all of Marx's work or ideas.
I hadn't mentioned it, but Marxism's anti-empiricism is another incredibly serious issue as well that both shows what a freakish 19th c archaism Marxism is, but also undermines enough to not make it seem worth saving the micrograms of baby for the kilos of bathwater.
I'm not a fan of Capitalism at all, but Marxism is even worse.
To try to help ^^: "Social Safety- And Inner Politics Rules Behavior 'Ethicaly' ?" -So, if that was the Question Socialism wanted to answer... (-;
HINT://de.m.wikipedia.org/wiki/Ethik#Das_Ziel_menschlichen_Handelns