Two cheers for Piketty: Or, why both he and the OECD and nearly everyone else are wrong on growth. Part 2
Today’s post is by Rupert Read, Reader in Philosophy in the School of Politics, Philosophy and Languages at the University of East Anglia, and the Chair of Green House and parliamentary candidate for Cambridge for the UK Green Party. Part 1 of the article is here.
Piketty has shied away from grasping the uncomfortable implication of his own data: that growthist capitalism is an engine for inequality both in the present and over much longer timescales. For growthist capitalism – and there is no other kind – systematically leads to inequality. It leads to inequality-in-the-future in part because the exponential return on debt, so as not to lead to excessive human exploitation, has instead relied on exploitation of the planet as an alternative property-right-claim to reduce the cumulative impact of the impossibility of paying returns to money: but this exploitation results in brutally depleting the future. And it leads to inequality-in-the-present in part because we still insist on paying returns to money anyway, and in most of the world are no closer to implementing a debt-jubilee or even a debt-audit than we were in 2007.
The resulting inequality, when the economy is growing faster, may be less than it otherwise would be only so long as one takes the “otherwise” in question to be comparing only with a failing (low-growth) period of capitalism. Not if one takes it instead to be comparing to a deliberately low/no-growth alternative political economy. A sharing post-growth society that we simply must now start to envision and create.
For there is, as we have seen, a strong case against growthism on the grounds of its devastation of our posterity, on the grounds of its complicity with the inegalitarian destructiveness that is capitalism (an inegalitarianism due in significant part to the requirement of compound growth of financial property rights: a requirement that a deliberately post-growth society would deliberately bring to an end, through monetary reform), and on the grounds of rhetorical excusing of inequality.
We can add to that that there is a strong precautionary case against growthism: The fantasy of infinite material expansion is just reckless, and ultimately insane, on a finite planet. And we can add further that there is a strong case against growthism, at least in countries like the UK, on the grounds too of well-being: Having more and more stuff and more and more consumer-choice is no longer making us happier, but rather the reverse.
Post-growth-ism is what my colleagues and I at Green House lay out, in our new book The post-growth project: how the end of economic growth could bring a fairer and happier society, you can link to via the image above. The title sums up, I think, how we seek to offer an ‘antidote’ to Piketty.
So: I give Piketty two cheers; one for his tremendous achievement in laying out in its full statistical inglory the dynamics of modern inequality of wealth, and another for his policy proposal on how to start to fix this. But that’s all: to earn three cheers, he would have had to have faced the limits to growth and seen how this offers an opportunity for a much more radical break with (literally) business-as-usual than he has as yet found his way to. Piketty favours free trade and opposes protectionism: that’s very conventional mainstream economics. Whereas protecting the local, globally, can be a radical and a green goal. We don’t have to choose between a global wealth-tax and a return to countries and regions protecting themselves against the unfettered depradations of capital. We could have both.
But we are going to have in to look beyond the complacent and bankrupt assumption, common to Piketty, Stern, the OECD, the recent massive Global Commission on the Economy and Climate, and in fact still virtually everybody, that it is wise or even possible to continue seeking economic growth as the answer to our problems. The hegemonic nostalgia for high-growth needs to be overcome.
What is coming, in overcoming growthism, is not just radical: it is nothing short of revolutionary. Both in terms of a transformation of economics and of a transformation of actually-existing political economies. For a post-growth society will be one in which it is no longer possible to promise trickle-down economics. In a post-growth economy, the 99% will demand that the wealth be shared much more equally: both now, and with future generations.
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