The national United States holiday called Labor Day has for me traditionally been a time for reading on the beach, for saying goodbye to summer, and for reflecting on the history of workers and unions . This recent Labor Day (two days ago) found me nowhere near a beach, but I did manage to spend some time looking for references to workers and unions in the pages of the passing summer’s surprise nonfiction bestseller – liberal French economist Thomas Piketty’s 685-page historical and economic tome Capital in the 21stCentury.
Except for a brief opening reference to South African workers who struck and met deadly police violence in August of 2012, my search was fruitless. In his instantly heralded volume on the long history of economic inequality’s ebbs and flows (in which he shows that capitalism’s inexorable underlying tendency is towards the increased concentration of wealth) in the world’s richest nations, Piketty gives no discernible role or agency to workers, unions, labor parties, and working class struggle. The deletion is so complete that the index to Capital in the 21st Century doesn’t contain the words and terms “unions,” “trade unions,” “workers,” or “working class.” That is quite consistent with leading Marxist academician David Harvey’s criticism of Piketty’s “mistaken definition of capital.” Harvey rightly describes capital as “a process not a thing … a process of circulation in which money is used to make more money often, but not exclusively through the exploitation of labor power. Piketty,” Harvey notes, “defines capital as the stock of all assets held by private individuals, corporations and governments that can be traded in the market no matter whether these assets are being used or not.”
Workers’ absence is quite a glaring omission from Piketty’s subject matter. If Piketty thinks that labor history and the broader history of the working class and labor-capital struggle holds no bearing on the long duree patterns of wealth and income distribution under the profits system, he is badly mistaken. You cannot begin to fully understand historical wage and income patterns, the decline of inequality in the rich nations during the middle third of the last century, or the dramatic upward re-concentration of wealth and income over the last four decades (the long, so-called neoliberal era that is correctly understood by Piketty as a return to capitalism’s long-term anti-egalitarian norm) without “factoring in” workers and class struggle. It’s more than pure coincidence that the significant reduction in US inequality which took place between the 1930s and the 1970s took place alongside the emergence and consolidation of an at first militant new mass-production unionism. And it is not for nothing that the US state-capitalist economic and power elite launched a “one-sided class war” (former United Workers President Douglass Fraser) against workers and unions – a top-down campaign that has reduced US union density (the percentage of US workers enrolled in unions) from over 30 % in the 1960s to 11.3% (and below 7% in the private sector) today– as an essential part of their effort to roll back “excess democracy’ and re-concentrate wealth and power since the 1970s.
The deletion of workers, unions, and labor history is hardly the only significant flaw in Capital in the 21st Century. Piketty’s “masterpiece” (conservative French demographer Emmanuel Todd) is excessively long, tedious, and (consistent with its failure to include working-class people and their struggles) dull. To make matters much worse, Piketty’s “magisterial treatise on capitalism’s inherent dynamics” (elite academician Dani Rodrik) praises Western capitalism’s “modern economic growth” for having averted what he revealing calls “the Marxist apocalypse” (disparity and poverty so great as to usher in a communist revolution) but pays no serious attention to how “modern” growth-addicted capitalism is generating a real-life environmental apocalypse right before our 21st century eyes.
Piketty foolishly sees the failure and collapse of the Soviet dictatorships as events that discredit radical left anti-capitalism – as if serious left radicals have ever thought that the Stalinist Soviet- bloc tyrannies represented a workers’ and peoples’ alternative to bourgeois rule.
Piketty says he “ha[s] no interest in denouncing inequality or capitalism per se – especially since social inequalities are not in themselves a problem as long as they are justified, that is, ‘founded upon common utility,’ as article 1 of the 1789 Declaration of the Rights of Man and the Citizen proclaims.” But what justifications of “common utility” can possibly be found in the extraordinary level of the socioeconomic disparity the profits system generates today? Just here in the US, where more than 16 million children – 22% of all children – languish below the federal government’s inadequate poverty level, the top 1% owns more wealth than the bottom 90% and a probably comparable share of the nation’s “democratically elected” officials. Six Walmart heirs have more wealth between them than the bottom 40%. Between 1983 and 2010, the Economic Policy Institute has calculated, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline.
This savage inequality comes courtesy of the class-based socioeconomic regime called capitalism, a defining aspect of which is a constant underlying tendency towards the concentration of more wealth in fewer hands. It also comes from forms of elite business-class agency that Piketty does not come close to thoroughly examining. Last May, the left economist Jack Rasmus rightly took Piketty to task for missing two leading explanations for strikingly increased inequality in the US since the 1970s: “the manipulation of global financial assets and speculative financial trading” and the “reducing of labor costs across the board.” Focusing almost exclusively changes in the tax system (the third leading explanation by Rasmus’ account), Piketty ignores both the aforementioned top-down managerial class war and the remarkable proliferation and de-/non-regulation of financial instruments (credit default swaps and other complex derivatives and financial “innovations”). These omissions are part of why David Harvey is correct to observe that Capital in the 21st Century “does not tell us why the crash of 2008 occurred and why it is taking so long for so many people to get out from under the dual burdens of prolonged unemployment and millions of houses lost to foreclosure.”
What does the neo-Jacobin Piketty recommend in the way of solutions, so as to bring inequality back into the proper bourgeois-revolutionary boundaries of “common utility”? Proclaiming that that the standard liberal-domestic tax, spending and regulatory agenda is now ineffective in the face of capital’s planetary reach, he advocates a measure that is beyond the grasp of any currently existing national or international body: “a global tax on capital”– something Piketty candidly calls “a utopian idea” (Capital in the 21st Century, 515). Only such a worldwide levy “would contain the unlimited growth of global inequality of wealth,” Piketty writes.
Given the monumental logistical and political barriers to the implementation of such a tax, it’s hard not to see Piketty’s heralded Capital as feeding popular pessimism about the existence of any alternatives to the United States’ drift into what former New York State Tax Commissioner James Wezler calls “a plutocratic dystopia characterized by wealth inequality approaching that of ancien régime France.” Piketty feeds the “de facto mental slavery” (David Barsamian) of our time: the widespread sense of powerlessness and isolation shared by millions of citizens and workers and the intimately related idea that there’s no serious or viable replacement for – and nothing much that can be done about – the dominant order.
Given all this and more, including its oversized and tedious nature, why was Piketty’s Capital in the 21st Century such a big hit with relatively well-off, highly “educated” and supposedly “left”-leaning, bi-coastal US liberals this last spring and summer? Dean Baker, co-director of the Center for Economic and Policy Research, got to the heart of the matter last May, at the peak of the Piketty craze. In an email to Columbia University journalism professor Thomas B. Edsall, Baker wrote that “a big part of the appeal is that it allows people to say capitalism is awful but there is nothing that we can do about it.” The author of a comprehensive domestic policy agenda for reducing inequality, Baker told Edsall“that many people will feel that they have done their part after struggling through a lengthy book on economics, and now they can go back to their vacation homes and say it’s all a shame.”
It takes a lot more time and energy to read Piketty’s Capital in the 21st Century than it does to vote for Barack Obama. Still, it’s hard to miss the parallel here. Like poking a ballot card for the fake-progressive president, purchasing (and maybe even working through some of) Piketty’s book seems to help some liberals think they’ve made a contribution to solving the world’s injustices even while it asks them to do nothing of substance to fight inequality and justifies that nothingness by suggesting that nothing much can be done anyway.
Paul Street’s new book is They Rule: The 1% v. Democracy(Paradigm, September 2014)
1. This is not to say that the first Monday in September is the most appropriate day for such reflection, historically speaking. It isn’t. May First is. For reflections on the reactionary business class considerations behind the official US Labor Day’s dating at the beginning of September rather than May 1st/May Day (the international workers’ day commemorating the Eight Hour Day Struggle in Chicago in 1886), see Ken Layne, “Labor Day is a Scam to Keep You Poor and Miserable Forever,” Gawker (August 30, 2013). Thanks to Matt Gardner for this source.
2. For an account of declining inequality in the mid-20th century US that is sensitive to the role of workers and unions, see Paul Krugman, The Conscience of a Liberal (New York, 2007), Chapter 3, “The Great Compression.”