Piketty’s data

[LBird]

alanjjohnstone wrote:

Even though it is from an unashamed capitalist apologist and with an intention or contaext  that we do not share, this author's concluding comment is appropriate.

Quote:

He is to be commended as well for demanding a humbler empiricism from the community of economists. But if we are to proceed from analysis to action, we still need a more robust theory of what is actually causing the problem …

I'm afraid that 'this author's concluding comment is' not 'appropriate', ajj.'Empiricism' (whether 'humble' or 'arrogant') will lead to conservative ideas being expressed.They'll pretend to extract the 'more robust theory' from 'The Facts', by 'induction' (sic), and that theory will suit their own purposes.What we need to do is to clarify our own 'theory' prior to reading Piketty, and this will allow us to discern his own 'theory', and thus determine the 'theory-ladenness' of Piketty's so-called 'facts'.

[Young Master Smeet]

http://theconversation.com/labour-takes-baton-from-piketty-as-it-ramps-up-for-election-year-28063This article shows the sort of disconnect thebween the readers (and implementers) of Piketty's book and his policy prescriptions.

Quote:

Beyond the popular image, it does not take long to realise that Piketty is no socialist thinker – when asked: “What’s the matter with inequality”, he affirms that inequality per se is not a problem. The issue is rather in the way inequality is becoming blatantly inimical to how the economic system works and is impeding its recovery. I wasn’t sure that the audience at the Class event, filled with progressive thinkers, would agree with such statement – and it got me wondering.[….] The debate at Class found him also proposing new solutions such as share ownership schemes, popular in Germany.

But, the imjportant thing to note is that his r>g has shaken the sort of social-democrat thinking that saw micro-economic efficiency leading to economic growth being the solution to poverty (and inequality, perhaps).

[alanjjohnstone]

Or if you want to be simplistic, his name has become a hook for anybody to hang their coat from.I earlier read a review that simply concentrated solely on Piketty's remarks on education quoting him claiming it being a means towards more equality and the article incorporated Piketty into calls for education reform in America thats being debated. This was that readers take as a solution to poverty , r>g is forgotten and something considered more practical is declared the routehttp://www.minnpost.com/community-voices/2014/07/considering-thomas-piketty-inequality-and-family-fragmentationThey'll pix and mix what they want from the book until its all but forgotten about. 

[alanjjohnstone]

They read it to save you from reading it.http://equitablegrowth.org/2014/03/25/dialogue-ten-so-far-worthwhile-reviews-of-and-reflections-on-thomas-pikettys-capital-in-the-twenty-first-century-wednesday-focus-march-26-2014/

[LBird]

alanjjohnstone wrote:

They read it to save you from reading it.http://equitablegrowth.org/2014/03/25/dialogue-ten-so-far-worthwhile-reviews-of-and-reflections-on-thomas-pikettys-capital-in-the-twenty-first-century-wednesday-focus-march-26-2014/

This, to me, seems the most relevant of the reviews from ajj’s link:

Steve Randy Waldmann wrote:

“The story I was told in my impressionable youth was this: Karl Marx had been a sharp analyst, but he was a terrible futurist….Marx thought that capitalists were trapped in an unstable dynamic of capital accumulation from which they benefited, on the one hand, but which led inevitably to collapse and from which they could not, as a class, escape…. Marx had underestimated the ingenuity and flexibility of capitalist societies, and particularly of the United States during the New Deal. Government intervened to solve Marx’s collective action problem, enabling capitalists secure their enlightened self-interest by keeping a distribution of prosperity sufficiently broad that the predicted collapse could be avoided…. To my father, American capitalism’s adaptability and ingenuity had proved Marx definitively wrong, in the best possible way….I really did giggle when I realized that an argument I thought of as conventional wisdom about how America proved Marx wrong sounded, perhaps because my audience was of a different generation, vaguely Marxist.I’m not taking issue at all with the substance of Yglesias’ post, which I think is smart and quite right. Health care costs are millions of people’s livelihood, and inefficient health care costs are a big part of that. Much of how modern economies survive is by protecting information problems and barriers to competition that sustain overpayments. This broadens the wealth distribution while permitting recipients the fiction that flows of purchasing power involve no transfers (“welfare”), only proud, self-reliant income….It is not those who advocate, but those who prevent, stabilizing transfers of purchasing power, who are the true Marxists. These self-styled capitalists do not espouse Marx’s theories, but they do something much worse: They perform them. They behave in precisely the way that Marx expected capitalists to behave. They cripple the American system’s greatest strength — its ingenuity, flexibility, adaptability. They prevent the sort of collective action through which earlier generations proved that capitalism could made be consonant with decent, stable, and broadly prosperous societies. In doing so, they risk proving Marx right.

[my bold]Leaving aside the nonsense about ‘American strengths’, it shows that even supporters of capitalism are, in effect, saying ‘Marx was right’.The real issue, then, for both them and us, is whether political action (ie. either peaceful reforms or destructive wars, separately or together) can overcome the tendencies of the system to do what it says on the tin: markets transfer wealth to the rich.Piketty is arguing ‘yes’. A judicious mixture of war and reform worked last time, and his book displays the ‘facts’ to support his argument. How will the 'market reformists' within the socialist movement react to this prescription for 'war socialism'?Do you look good in khaki, ajj?

[LBird]

Here’s some backing for my opinion that Piketty (perhaps ‘subconsciously’, as my sop to his fanclub – “Gosh! He’s a professor!”) is advocating ‘War Socialism’; and, to satisfy the Engelsian Gradgrinds [ http://en.wikipedia.org/wiki/Gradgrind ] amongst us, here are some ‘Pikettian facts’:

Piketty, p. 237, wrote:

…the two world wars, and the public policies that followed from them, played a central role in reducing inequalities in the twentieth century. There was nothing natural or spontaneous about this process…

[my bold]

Piketty, pp. 498-9, wrote:

…it is important to realize that progressive taxation was as much a product of two world wars as it was of democracy….tax rates, even on the most astronomical incomes, remained extremely low prior to World War I. This was true everywhere, without exception. The magnitude of the political shock due to the war is quite clear….The top rate stagnated at insignificant levels until 1914 and then skyrocketed after the war…

[my bold]I’d suggest that the only thing that compels the ruling class to divest itself of its wealth is ‘FEAR’. Both fear of other ruling classes (actual war) and fear of  its own exploited classes (potential revolutions produced post-war by war).It’s not democracy, decency or enlightened self-preservation that drives the ruling class, but fear.And… just in case any comrades think that Piketty actually believes in his own ‘peaceful’ solutions of ‘world reformism’:

Piketty, p. 27, wrote:

It is possible to imagine public institutions and policies that would counter the effects of this implacable logic: for instance, a progressive global tax on capital…It is unfortunately likely that actual responses to the problem…will in practice be far more modest and less effective.

[my bold]So, ‘imagination’ and ‘fortune’ don’t favour us, boys and girls!It’s ‘War!’The Pikettian 'immodest and effective' solution, as proved by the ‘facts’ of history (as related by Piketty) and the ‘facts’ of Pikettian logic (as related by me).Gradgrind would be proud of me!And no ‘ideology’ in sight!Most important of all, neither Piketty nor I have exposed our own ‘ideologies’; we don’t employ one, and have just reported the ‘facts’.If you believe that last one, of either me or Piketty, you’re all dafter than I thought!

[ALB]

LBird wrote:

Leaving aside the nonsense about ‘American strengths’, it shows that even supporters of capitalism are, in effect, saying ‘Marx was right’.The real issue, then, for both them and us, is whether political action (ie. either peaceful reforms or destructive wars, separately or together) can overcome the tendencies of the system to do what it says on the tin: markets transfer wealth to the rich.Piketty is arguing ‘yes’. A judicious mixture of war and reform worked last time, and his book displays the ‘facts’ to support his argument. How will the 'market reformists' within the socialist movement react to this prescription for 'war socialism'?

LBird wrote:

I’d suggest that the only thing that compels the ruling class to divest itself of its wealth is ‘FEAR’. Both fear of other ruling classes (actual war) and fear of  its own exploited classes (potential revolutions produced post-war by war).It’s not democracy, decency or enlightened self-preservation that drives the ruling class, but fear.And… just in case any comrades think that Piketty actually believes in his own ‘peaceful’ solutions of ‘world reformism’:

Now we are getting somewhere. Having read the book you have been able to confirm (a) that Piketty regards the 'natural or spontaneous' tendency of capitalism is for the rich to get richer proportionately as well as absolutely; (b) that he thinks that this tendency can be, and has been, stopped or reversed by certain outside events at least temporarily (c) that he himself doesn't think that the political interventions he proposes to try to do this are likely to be implemented.In other words, he is being inconsistent. He ought to draw the conclusion that we do — that the only way out is to replace capitalism with socialism (or communism, the same thing).I don't think (b) invalidates the socialist argument. Yes, the tendency can be temporarily slowed down (even you concede this) but the point is that this will always only be temporary; in due course the 'natural or spontaneous' tendency will begin to win out again.I would also add that we don't necessarily have to be committed to (a) in full, i.e we only need accept that the tendency under capitalism is for the rich to get richer absolutely, i.e that they don't necessarily have to get richer relatively to the rest of the population. That depends on the specific property and inheritance laws  in force at a particular time and place. It didn't apply to the sort of state capitalism in the old USSR where the ruling class  collectively monopolised the means of production without individual private property rights and where being a member of the exploiting class was not handed down through inheritance. The point is that, as Marx explained, the logic of capitalism is the accumulation of more and more capital out of surplus value extracted from the wage working class, irrespective of who owns or benefits from the accumulated capital.Finally, there are of course no 'market socialists' nor advocates of 'war socialism' here, though there are plenty around elsewhere, e.g amongst the Leninists and Trotskyists.

[LBird]

3 possibilities?ReformThe ruling class choose reform, to pacify ‘The Stupid/The Great Unwashed’ (Aldous Huxley’s ‘Brave New World’ ?), by ‘bread and circuses’ (panem et circenses: modern trans.: ‘Big Macs and Big Brother’);The exploited class display their inability to rise to class consciousness, because of the ‘natural’ stupidity of their ‘sheep-like’ nature.RegressionThe ruling class choose forceful extraction: a new form of ‘slave society’ or ‘eternal war’, with necessarily lower living standards for workers;The exploited class: as aboveRevolutionThe ruling class are expropriated;The exploited class choose resistance to the sheep-pens of both ‘mindless, meaningless existence’ and of ‘Auschwitz and the Gulag’.I think both Pikettians and the market socialists would like to opt for ‘reform’, because they are, like Keynes, essentially elitists. None have any time for the notion of class struggle and consciousness leading to [insert one’s name for a non-market, democratic production, society], because ‘workers’ are not capable of developing as a ‘group’ (of course, the elitists don’t discount a minority of individuals from a ‘working’ background developing as ‘individuals’).The real conundrum is whether there is an internal dynamic to capitalism which compels a choice from between only Regression or Revolution.Piketty wants reform, but fears the ‘compulsive dynamic’ does exist. I think if he’s pushed in the direction he fears, he will choose regression.As the good sociopath that he is, of course![since DJP considers the use of this term ‘un-profound and un-nuanced’, but likes Python, I’ll rephrase it to ‘Piketty is a very naughty boy!’]

[ALB]

LBird wrote:

The real conundrum is whether there is an internal dynamic to capitalism which compels a choice from between only Regression or Revolution.Piketty wants reform, but fears the ‘compulsive dynamic’ does exist. I think if he’s pushed in the direction he fears, he will choose regression.

I don't think that there is much point in debating which way Piketty would jump confronted with a choice between Revolution or Regression, but it could be of interest to speculate which way reformists in general might.If we're talking about a democratic, majority revolution (rather than some minority-led insurrection) I don't see why they would want to opt for regression/repression. After all, mosr of them will be reformists today not because they want to "save capitalism"  but because they want to improve things for people but don't see any alternative to capitalism. I would have thought (would like to think) that, with socialism/communism as the only remaining way to do this, that they'd opt for this. In fact, won't the future socialist majority inevitably have to be made up of  former reformists?

[alanjjohnstone]

At long last, something i can actually use on our blog !http://socialismoryourmoneyback.blogspot.com/2014/07/thomas-piketty-jaccuse.html

[LBird]

ALB wrote:

I don't think that there is much point in debating which way Piketty would jump confronted with a choice between Revolution or Regression, but it could be of interest to speculate which way reformists in general might.

[my bold]Most reformists want to help other humans. I include Piketty in this ‘general’ group. But reformists are elitists: this must be so, otherwise they’d be in favour of the democratic control of the economy and the end of markets and money.Reformists can’t imagine everybody having the same say in the production, distribution and consumption of our wealth. For reformists, human nature gets in the way. Put simply, they believe that most people are not interested in politics, economics or culture, and are most happy when well-treated, well-fed, well-housed, well-rewarded, etc. As long as the reformists are the ones to determine ‘well’ in all these regards, the reformists have done their social duty, to help other humans live a good life. For reformists, where the Communists go wrong is to insist that ‘well’ should be determined by those who are the object of ‘well’; that is, that Communists insist that ‘well’ should be the product of democratic methods. For reformists, ‘well’ is necessarily (because of human nature) a product of elite considerations.To put this thinking simply, the reformists want to ensure that the ‘madhouse’, that is the natural human experience of most humans, is run on ‘humane’ lines. But, by nature, ‘humanity’ is restricted to a few; to allow the ‘inmates’ of the ‘madhouse’ (which is the natural, daily, experience of humans) to run the ‘madhouse’, as Communists propose, really is mad! The Communists propose letting the inmates take over the asylum.This basis to their thinking leads the reformists into a cul-de-sac, within our three choices of Reform, Regression and Revolution. They really want Reform, as Piketty clearly argues; Revolution is a non-starter, and not even a consideration.But, if, as Piketty also seems to imply, there is this internal compulsive dynamic to capitalism, it implies Reform will be taken off the agenda for reformists. As they’ve already discounted Revolution, there simply isn’t any rational choice, within capitalism, when its compulsive dynamic comes to fruition, other than Regression. For Piketty and the other reformists, since only capitalism is even imaginable as a free system for individuals, the best option is the ‘short, sharp, shock’ of Regression, to reset capitalism back into a workable state, so that Reform and ‘well-being’ for the masses can be reinstated.These politico-economic questions are predicated upon theories of ‘human nature’. Reformists might wish to treat people ‘well’, but those people really are, when all is said and done, just ‘beasts in the field’. Panem et circenses really is the best that these beasts can hope for, and the real issue for reformists is how to get the only system which can produce those ‘bread and circuses’ of ‘well-being’ back into a workable order. If solving that issue requires a touch of Regression, then that’s inescapable, a part of Piketty’s internal compulsive dynamic. Hayek, Friedman, and Pinochet are the logic of Reformism.Whilst workers display little or no class consciousness, then the ‘beasts in the field’ ideology will hold sway. Go to the pub, match, playground, bus, train, office, factory… would you let these people decide on your future? Or, god forbid, run ‘science’?We’re all Pikettians now!

[Young Master Smeet]

Quote:

Reformists can’t imagine everybody having the same say in the production, distribution and consumption of our wealth.

This is just blithering nosense.  Many "reformists" would say they agree with our ends, but disagree with the means, and believe that piecemeal change can work.  Essentially, it is a project management question.  They either suggest peice by peice implementation (or parrallel running, in some circumstances) but we suggest a hard change over. 

[ALB]

I agree that reformists in one sense are elitists in that they want to do something for people instead of people acting for themselves, but I was thinking of it in a wider sense that most of the working class today have a "reformist consciousness", i.e they don't see any alternative to capitalism either and just seek the best they can within the system. Which is why they vote for and follow reformists in the narrower sense.I still don't think it necessarily follows that, given a choice between socialism and an openly repressive capitalism, reformists in the narrower sense would necessarily choose repression rather than revolution. After all, many of themselves consider themselves to be "socialists" (including Piketty as a member of the French PS).

[LBird]

ALB wrote:

I still don't think it necessarily follows that, given a choice between socialism and an openly repressive capitalism, reformists in the narrower sense would necessarily choose repression rather than revolution. After all, many of themselves consider themselves to be "socialists" (including Piketty as a member of the French PS).

You're probably right, ALB!"Socialists", under the bonnet, are all the same. They wouldn't 'choose' Regression, would they?That nice Mr. Wilson… he wouldn't 'regress' to breaking strikes, would he, now? Or, Mr. Kinnock, he wouldn't, if he had the chance…And even Herr Hitler has 'socialist' in the name of his party, so it's pretty unimaginable, that 'socialists' would Regress in the face of the capitalist systematic imperatives, that Piketty seems so afraid of.I suppose that the only way to sort out this 'opinion' of whether 'socialists' will flock to Regression or to Revolution, is to examine the 'facts' of history. 1919? 1926? 1936? 1968? The 1976 Labour Party conference, given the choice between the 'people' and the IMF?Hmmm.. I'm inclined to think, ALB, that 'choosing repression' is precisely what 'reformists' (even those trading under the banner of 'socialism') will do, if Piketty's suspected dynamic continues on its merry way.The obvious answer is to declare that 'Piketty is Wrong!' That is, that there is no compulsive systematic behaviour to capitalism, and it's just the interactions of individuals, who can choose to 'do the right thing'.Perhaps they'll just choose the bits of Piketty's book that suits their existing ideologies (goverment spending, higher taxes, etc.) and ignore the inconvenient bits ("Spectre over Europe"-type stuff). He is French, after all, and they're inclined to hysteria. Good old Anglo-Saxon restraint is what's needed. As long as the 'restraint' is applied to the 'beasts in the field', of course.'Austerity'? It's just another name for 'Socialism', I'm sure they'd argue.

[LBird]

Young Master Smeet wrote:

Quote:

Reformists can’t imagine everybody having the same say in the production, distribution and consumption of our wealth.

This is just blithering nosense.  Many "reformists" would say they agree with our ends, but disagree with the means, and believe that piecemeal change can work.  Essentially, it is a project management question.  They either suggest peice by peice implementation (or parrallel running, in some circumstances) but we suggest a hard change over. 

[my bold]Ever heard of Eduard Bernstein, YMS?http://en.wikipedia.org/wiki/Eduard_BernsteinYes, 'ends and means'.

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