Tag Archives: thomas piketty

Thomas Piketty On The Winners Of Globalisation

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Thomas Piketty gets dismissed a lot: from the right-wing since they either think there’s much inequality or that it’s unimportant. From the left, he gets ridiculed for not being a Marxist or even Post-Keynesian/Keynesian enough. Whatever the criticisms, there are some things which he says which are useful and highly important in the current political climate. My view is that he is a bit late to it but some of his analysis adds more light.

Snapshot from a promotional video for Seuil.

In his book Capital And Ideology, he talks of how the dynamics of winners against losers of globalisation creates interesting politics. For example in pages 812-817:

Will the Democratic Party Become the Party of the Winners of Globalization?

…

Nevertheless, other factors cast doubt on the long-term viability of a transformation of the Democratic Party into the party of the winners of globalization in all its dimensions: educational as well as patrimonial. First, the presidential debates of 2016 showed the degree to which cultural and ideological differences remain between the Brahmin and merchant elites. Whereas the intellectual elite stressed values of level-headed rationality and cultural openness, which Barack Obama and Hillary Clinton sought to project, business elites favored deal-making ability, cunning, and virility, of which Donald Trump presented himself as the embodiment.16 In other words, the system of multiple elites has not yet breathed its last because at bottom it rests on two different and complementary meritocratic ideologies. Second, the 2016 presidential election showed the risk that any political party runs if it becomes too blatantly identified as the party of the winners of globalization. It then becomes the target of anti-elitist ideologies of all kinds: in the United States in 2016, this allowed Donald Trump to deploy what one might call the nativist merchant ideology against the Democrats. I will come back to this.

Last but not least, I do not believe that this evolution of the Democratic Party is viable in the long run because it does not reflect the egalitarian values of an important part of the Democratic electorate and of the United States as a whole …

  1. Note that the recourse to overtly anti-intellectual and anti-Brahmin leaders like Donald Trump is not limited to the US Republican Party: the European right has gone in a similar direction as shown by the choice of a Silvio Berlusconi in Italy or a Nicolas Sarkozy in France.

and on the EU referendum/Brexit, page 861, Chapter Sixteen, Social Nativism: The Postcolonial Identitarian Trap:

… in all three countries [United Kingdom, United States, and France], the “classist” party systems of the period 1950–1980 gradually gave way in the period 1990–2020 to systems of multiple elites, in which a party of the highly educated (the “Brahmin left”) and a party of the wealthy and highly paid (the “merchant right”) alternated in power. The very end of the period was marked by increasing conflict over the organization of globalization and the European project, pitting the relatively well-off classes, on the whole favorable to continuation of the status quo, against the disadvantaged classes, which are increasingly opposed to the status quo and whose legitimate feelings of abandonment have been cleverly exploited by parties espousing a variety of nationalist and anti-immigrant ideologies.

Quinn Slobodian’s Review Of Capital And Ideology

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Yesterday I had recommended Ingrid Harvold Kvangraven’s review of Thomas Piketty’s book Capital And Ideology, which raised important points about the book totally ignoring the need for a rebalancing of global finance and production.

However, there’s another perspective to look at a great point missed out in the review.

Quinn Slobodian has a Twitter thread, where he points out why Piketty’s book is important. He says:

[T]he central point of piketty’s book-in-the-book is devastating: left parties have gone from being the party of the poor and less educated to the party of the highly educated, losing ever more voters to the right.

and also on the EU Referendum/Brexit:

among the most striking passages are when he concedes the “no” votes on referenda and the “leave” vote on brexit were rare moments of clear classist voting pattern: “a complete divorce between the less advantaged and the European project”

Hence the need for an egalitarian internationalist movement.

Link

Ingrid Harvold Kvangraven’s Review Of Thomas Piketty’s Capital And Ideology

Nice review of Thomas Piketty’s book Capital and Ideology:

… his [Piketty’s] policy recommendations largely on wealth transfers. For example, rather than interrogating how we as society work, produce and consume, his solutions are biased towards redistribution without changing the core of the system.

This limits his capacity to explain global phenomena. This is clear in his view on the effects of trade liberalization: rather than exploring how the removal of barriers to imports in the 1980s led to a collapse of industry in the global south, Piketty focuses on the loss of income from tariffs. In the same vein, his proposals shy away from discussing the massive rebalancing of global finance and production that is necessary; instead, he focuses on aid transfers to governments, and taxation.

Picture from Thomas Piketty’s Twitter page

Thomas Piketty On Globalisation And Borders

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Thomas Piketty has an interesting observation on globalisation and migration/borders.

From slide 11 from a lecture from July (and in earlier talks too):

Globalisation—under the current rules of the game—puts a constraint on the expansion of economies. So Piketty thinks that this can explain the debate around migration since the last few years. Although he doesn’t say that, I’d imagine that he is saying that the distribution of income favouring lower classes is difficult because of the race to the bottom caused by globalisation.

Thomas Piketty’s New Book

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Thomas Piketty is out with a new book Capital Et Idéologie.

Picture credit L’Obs

His tweet, announcing. The English version will be released in a few months.

Branko Milanovic has already read it and his review has this explanation of Piketty’s brilliant phrase, Brahmin Left:

… In [the second] part, we find the Piketty who plays to his strength: bold and innovative use of data which produces a new way of looking at phenomena that we all observe but were unable to define so precisely. Here, Piketty is “playing” on the familiar Western economic history “terrain” that he knows well, probably better than any other economist.

This part of the book looks empirically at the reasons that left-wing, or social democratic parties have gradually transformed themselves from being the parties of the less-educated and poorer classes to become the parties of the educated and affluent middle and upper-middle classes. To a large extent, traditionally left parties have changed because their original social-democratic agenda was so successful in opening up education and high-income possibilities to the people who in the 1950s and 1960s came from modest backgrounds. These people, the “winners” of social democracy, continued voting for left-wing parties but their interests and worldview were no longer the same as that of their (less-educated) parents. The parties’ internal social structure thus changed—the product of their own political and social success. In Piketty’s terms, they became the parties of the “Brahmin left” (La gauche Brahmane), as opposed to the conservative right-wing parties, which remained the parties of the “merchant right” (La droite marchande).

To simplify, the elite became divided between the educated “Brahmins” and the more commercially-minded “investors,” or capitalists. This development, however, left the people who failed to experience upward educational and income mobility unrepresented, and those people are the ones that feed the current “populist” wave. Quite extraordinarily, Piketty shows the education and income shifts of left-wing parties’ voters using very similar long-term data from all major developed democracies (and India). The fact that the story is so consistent across countries lends an almost uncanny plausibility to his hypothesis.

One of the finest insights on political economy!