Rothwell Si, Piketty No!
I haven’t read the famous economist Thomas Piketty’s new book, but I hope to have time to do so in the future. My reader will also forgive, I hope, the “cultural appropriation” of a Cuban Revolution slogan in the title of this post. For now, I have read a review of Piketty’s book in The Economist (“A Bestselling Economist Sets Out the Case for Socialism,” March 5, 2020). From what I gather there, the book naively defends the sort of hard socialism that we would instead expect to find in the dreams of some befuddled French sociologist.
The Economist quotes the incipit of the book, where Piketty pontifies:
Every human society must justify its inequalities.
I checked on Amazon that it is a faithful translation of the French original:
Chaque société humaine doit justifier ses inégalités.
Especially for an economist, the declaration raises an immediate question: How does society do that? Is it the top 1% who must provide a justification through its collective mouth? Or the bottom 1% through its different mouth? Or some group of rationally ignorant voters? Or everybody through some mythical “social welfare function”? Or is it some philosopher-king—like Piketty, to take an example at random—who will interpret the general will?
The Economist’s reviewer explains another thought of Piketty (the quotes inside the quote are from the latter):
The notion that people have “an inviolable natural right [to] strictly private property” cannot withstand analysis, since the “accumulation of wealth is always the fruit of a social process, which depends, among other things, on public infrastructures … the social division of labour, and the knowledge accumulated by humanity over centuries.”
Could we say, in a parallel fashion, that the notion that individuals would have the right to marry whom they want cannot withstand analysis because dating and marrying are always the fruit of a social process which depends, among other things, on public roads (except when the two lovers live in the same apartment block) and on the knowledge of sex accumulated by humanity over centuries? We can’t say, except metaphorically, that “society” choses that, but we can certainly say that, until 1967 (Loving v. Virginia), certain American state governments, influenced by some majority or mob or faction, did negate the right of individuals to marry outside their race. So, Mr. Piketty, was that good?
The Economist criticizes the book for a number of different reasons, including:
After all, socialism carries its own risks and distortions. Reductions in material inequality might be offset by increases in other sorts—in access to public services, say, or in free expression and political power. Businesses run by “the workers” might be captured by trade unions. A more powerful state might become more self-serving. Would such societies be truly just and their inhabitants truly free? In the end, Marx came to worry about this complication. Not Mr Piketty.
Let’s get serious. An interesting book about equality and inequality is Jonathan Rothwell’s A Republic of Equals: A Manifesto for a Just Society (Princeton University Press, 2019). I review it in the just-out Spring issue of Regulation. (Regulation is not gated.) In line with Rothwell’s thesis, my review is titled “The One-Percenter State.” As I explain, Rothwell argues that (the quotes inside the quote are from Rothwell)
“the extreme inequality that exists in the contemporary United States and other countries is not the result of well-functioning markets,” but, on the contrary of “political inequality and corrupted markets.” In other words, “well-functioning markets—characterized by mutually beneficial exchange among political equals—lead to egalitarian outcomes with respect to income and well-being.”
The book contains many surprises documented with scholarly research and statistical analyses. The fact that Rothwell is principal economist at Gallup and senior fellow at the Brookings Institution makes his approach and conclusions even more valuable—even if I don’t always agree with him. I am not sure he will succeed selling the value of free markets to the left or, for that matter, to the right, but his book is well worth reading if one wants to think seriously about equality and inequality.