Book-review: Piketty does not answer man´s need to flourish

Renowned economist Thomas Piketty writes engagingly and with insight about increasing inequality, but needs to be challenged on his ideology of humanity.

I sat there, a bit starstruck, together with a good part of Oslo´s political and economic nerds, in the splendid aula of the University of Oslo one early autumn morning of 2014. One of the world´s most debated economists entered the stage. Thomas Piketty caught the attention of the listeners in his usual manner, and as expected, got the Norwegian press engaged in a renewed discussion about the cause and solutions to counter the increased economic inequality around the world. Through his recently published book «Une brève histoire de l`egalité» (a brief history of egality), he makes his decade-long work available in an accessible way for most of us. 

Combat script 

«Humanity progresses», Piketty establishes early on in the book. The non-fiction genre and the fact that the book in his usual manner is packed with statistics, does not give us ample possibilities to get to know the author himself. Yet, what does come across strongly is his glowing passion to counter the increasing economic inequality in the world. In this way, the book may be seen as a combat script. What also clearly comes across, is the author´s strong leaning towards the left side of the political spectrum.  

Despite his ample descriptions of the problems of inequality, the French economist describes a continuous feast through the 20th century which in broad terms describes why most of us in Europe no longer are suppressed, poor farmers, but most probably belong to the broad, well-off middle class. But, says Piketty, this feast came to an abrupt end with the introduction of the neo-liberal policies of Ronald Reagan and Margareth Thatcher in the 1980s. Once again, it is the wealthiest (especially in the US but also in Europe) that run away with most of the profit and most of the growth.

Armed with heavy and well-backed statistics about the economics of historic colonies (the basis of the enormous wealth discrepancy which grew forth in the 18th and 19th century), CO2-emissions, income and real estate distribution, Piketty paints a picture of how the world went from gross inequality with a small but extremely rich and powerful elite in the beginning of the 20th century, to a much better distributed wealth 80 years later.

The growth of the middle class

The picture he paints is in broad terms this: The 1% richest part of the population has moved from a position of owning about half of all real estate in the western countries, to owning about 25% today in France as an example. The poorest 5% of the population has been on a steady-state level of owning 5% of all real estate – as a group. Thus, it was a new middle class that grew forth between these two groups. The reason for this development was first and foremost the nation-states’ ability to introduce and execute a progressive tax-system, where those who own and make the most, pay the most taxes. Through this, the development of the modern welfare-state, as we know it today, came into being.  

The growing inequality is felt both in Europe and the USA. As the economist Ron Ivey and lawyer Tim Shirk writes in Newsweek on Nov 15th 2021, «From 2001 to 2016, middle-class families saw their median net worth shrink by 20 percent and working-class families lost 45 percent. (…) Ninety-nine percent of Americans now pay more than double the rate the wealthiest 1 percent pay in taxes relative to their interests in the estate.» In my home-country of Norway, this is felt to a lesser extent, but it also shows up here: It is no longer possible for the average-joe to settle down in the capital city of Oslo without a more-than-significant amount of equity to start off with.

As such, it is easy to follow Piketty in his descriptions. His writing is, contrary to his earlier publications, easy to follow, catchy and in his typical manner, extremely insightful. In addition to his basic case about the distribution of wealth, he also strongly confronts our colonial history, the lasting and ongoing problem of racism and sexism, which both and in their own ways, continue to make outcasts in our societies.

Need ideological challenges

When it comes to Pikettys more holistic suggestions to solve the deep divides of wealth and opportunity, it isn’t as easy to buy into his package of solutions. It is easy to agree that a renewed focus on progressive taxation is needed, so that we secure what also Adam Smith was concerned about in the «Bible» of capitalism, «The Wealth of Nations». In it, Smith writes that «The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate.» The richest today take a disproportionate large piece of the economic value created in many countries around the globe today. This obviously is the case in the USA, but the phenomena are also to some degree relevant in our political debates even in the quite egalitarian Nordic countries.  

But where Piketty desires «…a new form of democratic, de-centralized and autonomous socialism, environmental-friendly and plural, which makes it possible to build another world, much more emancipated and egalitarian than the one we see today», it will, as I consider it, be necessary to challenge his ideological platform. This should be done both from a Christian democratic and from a more conservative point of view. His justice- and redistributive thinking seem technical and materialistic, and does not give credible answers to the thesis that the state is able to redistribute in such a way that allows for healthy human development and flourishing.

A decisive question for Mr. Piketty is this: Should not living virtuously and acting wisely or creating economic value, rather than making bad personal decisions, be rewarded? In this respect, Piketty´s redistributive thinking may limit and lower the inherent dignity of human beings. The Scottish philosopher Alasdair Macintyre touches on this in his view of justice.

In summary, Piketty adds a crucial contribution to our understanding of one of the world´s largest and most basic challenges today. A much too large part of the value-creation ends up in the pockets of the richest few, and this contributes to a less dynamic world economy even according to basic capitalistic thinking. This significantly slows down our ability to produce the necessary means to counter the burning climate crisis. With his last book, these thoughts become available for more of us, and I hope «Une brève histoire de l`egalité» will contribute to an even broader debate. The goal then, should not be only to bring along more economic equality, but that we as societies may find better ways to give our citizens the opportunity both to develop and flourish, in a sustainable way.

This book review was first published in the Norwegian daily «Vårt Land» on Nov 19th 2021, and may be read in it´s original version in Norwegian here: