Thomas Piketty’s Brief History is the fourth installment of his assault on economic inequality, following as it does the best-selling Capital in the Twenty-First Century and Capital and Ideology. The third, Time for Socialism: Dispatches from a World on Fire, 2016–2021, is just a collection of popular articles based on which the New York Times dubbed Piketty a “vaguely left-of-center” economist. This slim fourth volume from Harvard University Press calls for far-reaching socialist policies to establish economic equality. It is a siren song of communism: “economic justice” without any cost or noteworthy harm to society. The primary reason for my concern with Piketty and this book is the relative influence of Karl Marx’s Communist Manifesto (written with Frederick
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Thomas Piketty’s Brief History is the fourth installment of his assault on economic inequality, following as it does the best-selling Capital in the Twenty-First Century and Capital and Ideology. The third, Time for Socialism: Dispatches from a World on Fire, 2016–2021, is just a collection of popular articles based on which the New York Times dubbed Piketty a “vaguely left-of-center” economist. This slim fourth volume from Harvard University Press calls for far-reaching socialist policies to establish economic equality. It is a siren song of communism: “economic justice” without any cost or noteworthy harm to society.
The primary reason for my concern with Piketty and this book is the relative influence of Karl Marx’s Communist Manifesto (written with Frederick Engels) versus his Kapital: A Critique of Political Economy. The Manifesto was short, on point, and politically actionable while Kapital was long, jargony, filled with footnotes, and nebulous concerning political action. Indeed, Marx’s view of history told Kapital readers to sit tight for generations and suffer, while the Manifesto was an immediate call to arms around the world!
In terms of relevance, the Manifesto’s ten-point program would become the political action platform for democratic socialists worldwide and public policy in leading nations by 1917. In contrast, the highly improbable Marxist takeover of Russia had no blueprint from Kapital, led to one economic disaster after another, and ended in failure, as Ludwig von Mises predicted. Piketty may have at least learned that lesson and advocates a social-democratic-type takeover.
All of Piketty’s books are terrible from an economic perspective. Most importantly, all are as dangerous to political economy as Marx’s books were catastrophic to hundreds of millions of people, especially the lower-income people Marx and Piketty propose to help. The brevity of this book makes it potentially the most socially devastating of the four.
Up until two centuries ago, more than 95 percent of humanity lived in “extreme poverty.” That number had fallen to about one-third of the global population by the end of the 1980s and is now less than 10 percent, and still falling, all during a period of rapid population increase. This is one of the most important facts you can say about the entire history of humanity, and yet it seems not widely known—and how it was achieved is completely lost on Piketty.
Piketty gives no indication to me that he is an economist or any kind of disinterested objective scientific observer. However, his statistic- and chart-filled books give the impression of a scientific basis for his policy conclusion. Piketty is a Marxist, an advocate for communism, but all in the guise of a conventional democratic socialism. However, his dedication of the book reminds readers of the Manifesto’s finale.
He does admit that the last quarter millennium has also been a powerful movement toward greater economic equality, but he largely ignores how the enormous, sustained increase in the standard of living was achieved. It just happened. He does want readers to understand his views that this improvement was not the result of capitalism, that sociopolitical systems are just a matter of democratic choice, and that various forms of socialist and union agitation are to be credited with economic progress.
His beliefs, which the intelligentsia and other second-hand dealers of ideas widely share, fly in the face of the facts. Individual rights, free markets, and freedom to trade created the opportunity for economic growth, wages above subsistence, and greater economic equality. Capitalism improved conditions for labor, hurt the wealthy and powerful in a comparative sense, and led to the emergence of the entrepreneurial, or bourgeois, class. The Industrial Revolution shifted the entire focus of the economy’s structure of production from the nobility’s demands to the workers’ needs; of this there is little doubt. It made people more equal, economically and otherwise, compared to the medieval system of authorities and serfs or even twentieth-century communism.
Instead, Piketty would like to attribute all these good developments to political action and uprisings. While there is a tinge of truth here, the main driver of all improvement is capitalism, even with all its political warts and injustices. It is just as clear that even most “Marxist” events, such as the French and Russian Revolutions, were driven by the emerging bourgeois and entrepreneurial classes, broadly conceived as the middle class, not the peasants.
Piketty ignores these facts and allies himself with the social democratic notion that outcomes can be achieved with a variety of voting systems and political choices regarding the nature of property systems, so that capitalism is no longer necessary. Furthermore, he believes that the equality that has been achieved is due to “conflicts and revolts against injustice” (p. 10), which is clearly not the case. For example, things like modern unions, socialist-leaning political parties, and “progressive” political platforms emerged after the surge of economic development and the spread of equality, not before. Indeed, the Industrial Revolution started in England after the political powers to control labor, capital, and trade were dissipated, not augmented.
Piketty also writes about politics and tactics in a way that might puzzle readers not intimately familiar with Marxist dogma and dialogue. However, make no mistake about it: Marxist, socialist, and progressive leaders, and the policies they advocate, are inherently violent, and they are not interested in pursuing scientific truth. They prefer that their opposition offer no resistance and ask no questions. Piketty’s recommendations knit together a system that helps guarantee no institutional chance of losing power, elections, and legislative majorities for the social democratic parties.
In terms of violence, of course, the favorite progressive policies, such as those in the Communist Manifesto’s ten-point program, are highly coercive and potentially violent. The ten points can be distilled into taking your land, income, and inheritance; i.e., “nationalizing” banking, communication, transportation, and the means of production; forced labor and resettlement; and all-encompassing cradle-to-grave propaganda.
Piketty extends his assault on history by declaring that progress—i.e., national wealth—exists. He fails to explain how that comes to be or is sustained, even though economists, at least since the time of Richard Cantillon and Adam Smith, have long considered it the essential question for economics to answer. Piketty also doesn’t explain why there was essentially no or little progress and often extreme inequality in the previous thousands of years.
Instead, Piketty wants to measure progress with education and health attainment statistics, which he attributes to the beginnings of the welfare state. He makes this claim even though education and healthcare were available to those outside the nobility long before the welfare state existed. Indeed, there were little education or healthcare opportunities before capitalism, and both metrics increased quickly with the movement toward freer markets. He tries to hide his subterfuge by displaying global and average statistics that disguise important national and marginal changes that would be more enlightening about freedom’s benefits, such as the remarkable increase in real wage rates in England during the nineteenth century.
Even with the undeniable progress toward more equality, Piketty’s personal view is that inequality remains “extremely high,” and he finds a problem with economic growth because he sees it as caused by population growth and global warming. He sees population growth rates as unsustainable and harmful. But does any serious social scientist see current population growth rates as a problem or perpetually sustainable? In our age of capitalism, population growth is now seen as more a matter of individual choice, not some mystical unknown or biological imperative. Social scientists have moved closer to the economic theory of population, first sketched out by Cantillon, and have moved on to the existing problems of declining population growth rates, declining populations, and the unbalanced demographics that have resulted from government policies in advanced economies such as China and Japan. Malthus is dead and has been for a long time.
At one point, Piketty attacks his own approach of using government statistics such as income measures, gross domestic product, and consumer price indices, as well as statistical averages and aggregates, as problematic for his purpose. Indeed, colleagues of mine have reexamined these government statistics, found them extremely misleading, and upon proper recalculation have found that most of the statistics propagated are monumental misrepresentations of reality in terms of economic inequality.
Instead, Piketty asks us to examine consumption, not money income, to assess inequality. But other economists have already done so, and their findings indicate that inequality in the US is much less a problem than the misleading income and poverty statistics suggest.
It is unclear how shifting focus to global warming and the “infernal life” it has wrought can save Piketty’s analysis or his policy agenda. The quality and integrity of that data are clearly bad, the science is deeply tarnished by government funding, and it is obvious to other scientists, engineers, and economists that capitalist and wealthy countries don’t face the imminent dangers, that global warming theorists allege, such as rising sea levels, but that noncapitalist economies might be negatively impacted if and when these dangers do emerge.
Piketty is an enemy of private property rights, which even most non-Austrian economists consider a necessary condition for prosperity. He does note that property is now more evenly divided than it was two centuries ago, before capitalism, but he seems unconcerned about how a middle class might have developed and flourished during that time. He thinks the question of ownership and control is a purely political one without substantive economic and legal ramifications. His whole discussion of these matters amounts to making wealth a Marxist-spawned whipping boy for even more progressive-income, wealth, and inheritance taxes and an ever-expanding welfare state.
Piketty does oppose colonialism and slavery, but he would no doubt be surprised to learn that it was liberals like Adam Smith (the philosopher of human happiness and empathy toward fellow citizens) that led the opposition to such institutions. He does quote Smith in these chapters, not as an opponent of colonialism and slavery, but as a strong supporter of Marxism’s nemesis, property rights!
If you properly understand capitalism as the union of market forces and the state, then the state has expanded and defended slavery, while market forces are what led to its withering away in both ancient and modern times. I can think of no other episode that better explains the state’s role in slavery than Piketty’s own country’s response to the slave revolt in Haiti, but that is a lesson lost on him.
Most remarkable of all is Piketty’s explanation for what he calls the “great redistribution,” which he dates from 1914–1980 (before World War I to when Reagan became US president and Thatcher became prime minister of the United Kingdom). He does say that this period was “no piece of cake” but that it ushered in progressive income taxation and the welfare state, thus creating the heavenly transformation of capitalism into increased economic equality, only to be set back by small steps toward market liberalization after 1980.
US statistics do indicate that after World War II, the middle class grew, that poverty shrank until President Johnson’s War on Poverty began in the mid-1960s, and that income inequality declined—to create what others have called the “Great Leveling.” Statisticians and accountants, including Piketty, have done yeoman-like work trying to estimate what happened to the numbers during this period. As fascinating as all that tinkering is for economists, it misses the bigger points regarding cause and effect.
The “leveling” occurred largely because of all the death, dislocation, and reduced family formation caused by World War I, the Spanish flu, the Great Depression, and World War II. When appalling numbers of young people die or are economically depressed, the subsequent number of births decreases. This leads to higher wage rates and results in a compressed, or leveled, income distribution. Under capitalism, real wage rates can and do increase, poverty declines, people get rich, and economic opportunity and equality improve without massive waves of death and destruction.
In contrast, Piketty sees progressive taxation and the welfare state as true salvation. He wants much more of both, in the form of a democracy that produces “progressive” increases in state power. You do not have to read too much between his lines to see that Piketty wants a complete Marxist state without the bad image of Marxism’s past economic failures, mass starvations, and genocides.
Piketty is a Marxist who has written a great deal on income distribution to promote income redistribution and other Marxist goals. He exhibits no knowledge of economics and economic theory except that implied by the construction of economic statistics. His proposed solutions are implicitly violent, destructive, and unable to achieve the desired results.
His books have been robust sellers by academic standards. Yet I am hard pressed to know of anyone who has read them, including all the economists I know and even people who work on this topic. I know a couple of younger economists who have read some of his coauthored papers.
Who bought these books? Who read them? Why did they get so little academic attention—serious reviews and critiques from economists? As a result, Piketty and his backers, largely unchallenged, have provided academic cover for socialism, higher taxes, and greater welfare spending to gain widespread acceptance.