Will Piketty’s Book Change the World?

When I was a child I had a little book that purported to list and describe one hundred "books that changed the world." I forget what most of them were, but I am virtually certain that the Bible and Marx's Das Kapital were prominent among them.

The current ecstasy on the left about Thomas Piketty's new book on economics and income inequality titled Capital in the Twenty-First Century is more than mere admiration. The acclamation appears to reflect the left's hope that it will be another of those books. To the left, Picketty's arguments are so clearly brilliant (and/or so potentially seductive to the have-nots and the guilty haves), and the problem of income inequality so vast, that their hope is that the book will finally be the ticket to convincing the reluctant of the benefits of the left's economic proposals.

Just for the sake of argument, let's imagine that Piketty's thesis is correct. The question then would remain as to whether Piketty is merely preaching to the choir, or whether it is likely that a significant number of people who are not already convinced of the truth of what he says would be persuaded by what he writes. In other words, would the American people accept his "remedies," such as an 80% tax on the rich (defined as 500K to 1 million in income) and a 50%-60% tax on the sort-of-rich-but-not-all-that-rich (defined as an income of 200K) and think those are actions they should support politically?

I can't see that happening in the foreseeable future, although I can see taxes on the rich being raised somewhat, as they have under Obama, and then millimeter by millimeter inching upwards over time. But if such taxes do end up rising to astronomical levels, it probably won't be because of Piketty and his attempt to use history and statistics to convince us that they should. It will be because politicians on the left have been successful in using rhetorical appeals to the envy that is ever-present in the makeup of human beings. They've been doing that more and more lately already, without Piketty's help.

Karl Marx's highly influential book -- the one that "changed the world" -- was titled Das Kapital: Kritik der politischen Ökonomie (Capital: Critique of Political Economy). Why did it catch on so? Probably because it was an idea whose time had come. Capitalism, and the industrial revolution that really got the capitalism engine going, were still relatively new and unregulated, and socialism/Communism on anything but a micro level had remained relatively untried. Back then it was easier to hope and even to think that it might work as Marx said it would. And it's important to note that America was always one of the less fertile grounds for Marx's theories as compared to Europe, in part because Marxism derives a great deal of its appeal from the "class struggle" in societies where the classes are more rigid than they are here.

The relative fluidity of the American classes has been remarked on many times, most recently in a study by professors Mark R. Rank and Thomas A. Hirschl:

It turns out that 12 percent of the [US] population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution....

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

It makes sense that this would be a large part of why this country has been somewhat resistant to socialism so far, and part of the reason that Americans have also traditionally had less tolerance for high taxes on the rich than Europeans have (the high taxes of mid-twentieth century America were offset by generous tax shelters and deductions that effectively neutered them). Many Americans have a not-completely-unrealistic hope that they might some day join the rich's ranks.

That doesn't mean that socialism couldn't take hold here. There is little question that it could, and that the current Democratic Party has gone further in that direction than at any time since the 1930s.

Piketty himself certainly seems to have that goal -- to reach Americans with his book and thus change the world. On the subject of the long nightmare of the Soviet Union, Piketty and his legions of supporters say that there's a way to do leftism better, and that they're the ones to implement it:

Mr. Piketty is not the first utopian visionary. He cites, for instance, the "Soviet experiment" that allowed man to throw "off his chains along with the yoke of accumulated wealth." In his telling, it only led to human disaster because societies need markets and private property to have a functioning economy. He says that his solutions provide a "less violent and more efficient response to the eternal problem of private capital and its return." Instead of Austen and Balzac, the professor ought to read "Animal Farm" and "Darkness at Noon."

Even if Piketty were correct in his economic conclusions and the prescriptions that follow (which I do not think he is), would it be a good idea to implement them? I submit that it would not, if a person values liberty. The compromises with liberty that such policies would entail, and the consequences of depriving the somewhat-wealthy and the really wealthy of most of the fruits of their labor (which Piketty considers the unjustified and unearned fruits of their labor), are horrifying. Whether it would end with mass kulak-murder and the Gulag, or merely a soul-killing torpor induced by the fact that initiative and innovation would no longer be especially rewarded and sloth and covetousness would be encouraged, it sounds like the opposite of Utopia.