Two cheers for Piketty: Or, why both he and the OECD and nearly everyone else are wrong on growth. Part 1
Today’s post is the first of two articles by Rupert Read, Reader in Philosophy in the School of Politics, Philosophy and Languages at the University of East Anglia, Chair of Green House and parliamentary candidate for Cambridge for the UK Green Party. Part 2 will appear tomorrow
Piketty’s alleged-updating of Marx, Capital in the 21st century, is taking the intellectual world by storm. I’m delighted that such an improbable happening can occur in our rather-impoverished public sphere, and pleased to cheer him on.
Piketty’s proposal for a global wealth tax to counteract the literally-insane levels of inequality now generated in our world is most welcome.
Piketty’s prior analysis of the importance of wealth-inequality (and not just income-inequality, on which Wilkinson and Pickett focussed in their epochal work The Spirit Level) is of course equally welcome.
That’s two thumbs-up. But sadly, I can’t give Piketty anything like a full-throated ‘three cheers’.
Piketty argues that if growth in a capitalist economy is higher then, other things being equal, wealth will be more evenly distributed. (I am extremely doubtful as to whether he has proved this; causation is of course not proven by mere correlation. The data are equally compatible with the claim that there has been a lucky partial correlation between high economic growth and periods of democratic regulation, reform and governance of the economy, and that it is the latter that have been more responsible for the relative evenness of wealth-distribution at times of higher economic growth.)
However, his claim in any case only applies to present-day people. Piketty fails almost completely to think about future people. If economic growth will lead to future generations suffering, then it is not egalitarian – provided that we take seriously that future generations matter, that they ought to be included as among our equals. Now, economists will counter that all people from now to the end of time are in their equations as if they live in a discounted present: but that it is the point. Rashly – madly – assuming that growth will continue forever, and additionally assuming that humans are selfish and don’t really care about their offspring, standard economists standardly discount the future: the further into the future one looks, the less the people living there matter, so far as economists are concerned. This is unacceptable.
I suggest that, at a time when it is ever clearer that humanity is running up against the limits to growth (the climate crisis being only the most large-scale of these phenomena), it is delusional and in fact disgraceful to seek to make an ‘egalitarian’ argument in favour of growthism. Growthism is causing the undermining of the living conditions of all our children and grandchildren: for it is above all economic growth that is to blame for our collective breaching of planetary limits. This alone is enough to completely undermine Piketty’s case for economic growth. For if we can’t take care of our descendants, what good are we? The first virtue of any decent society is to not destroy the conditions of possibility for its children, the conditions of possibility for their flourishing.
But there’s more. Piketty makes the assumption that our economy must remain fundamentally capitalist (and in this fundamental respect it is more than presumptuous of him to seek to don the mantle of Marx). But given the looming contradiction between capitalism and the planet, he ought not to have done so. Stopping doing so would mean that the truth, if such it is, that growth is necessary in a capitalist economy to help allegedly equalise the distribution of wealth no longer carries much weight: for we have to start to think beyond a capitalist economy.
A post-growth ‘steady-state’ economy by definition would not be one in which the growth imperative of capitalism was allowed to let rip: in such a post-growth economy/society, humankind would continue to develop culturally, but would no longer seek to expand the amount of economic activity and would seek to reduce to one-planet levels the amount of material throughput (i.e. of resource-use and pollution).
A post-growth society will be forced to face the question which growthist ideology – with its promise of an ever-growing pie – allows one endlessly to evade: how shall we share what together we have? So Piketty’s claim that a ‘stalling’ of growth is bad for the majority may well be exactly wrong. Not just because the capture of all growth by the elite is happening right now. But also because once one considers the future, and once one considers that we need in any case to be thinking beyond capitalist political economy, and once one considers especially the way in which growth functions as a rhetorical device to shield from view the necessity for sharing out the wealth more fairly, then it is simply no longer convincing.
I would submit in fact that a ‘stalling’ of growth – or, better, a facing up to living in a post-growth society – and a willingness to see that we simply can’t keep growing the pie now that the ingredients are running out, will finally be what force the majority to take back some of the wealth currently being hoarded by the rich.
Some portions of this article appeared previously in my Green economics versus growth economics, available here
Does income inequality hurt economic growth? From the OECD Directorate for Employment, Labour and Social Affairs