The key argument in Thomas Piketty’s book, Capital in the Twenty-First Century, has gained much attention of late, as it should. Quite simply, we are headed for continued disparity between the very wealthy and the rest of us, unless we create international governing schemes that can control the growth and movement of capital. And the chances of that happening are not very great.
As he admits, it doesn’t take a rocket scientist, or even an economist, to figure out the current trends. Capital—things like real estate and stocks and bonds—which can be seen as unearned income, will probably get a return of 4 to 5 percent, while return on earned income such as labor, will probably see an increase of around 1 percent. In such a future, the rich get richer and the poor get poorer.
This is not the first appearance of this argument. At the end of the 19th Century Henry George make a similar argument, and actually proposed a similar solution: a tax of capital. (Progress and Poverty). Will Pikett’s work become as well known as George’s once was and then as completely ignored? Hard to know. What is different is that George actually offered a new way of seeing things, a new story. Piketty, on the other hand, remains within the story of an economics of property. As far as we know from this book, he hasn’t taken seriously Karl Polanyi’s 1940 claim that labor, land, and money are not properties. Labor is a human activity, land is a biotic community, money is a social relation.
Even before Polanyi, George argued that land is a commons, something that belongs to all of us. Therefore, increases in the value of land should be shared with all citizens, in the form of a land value tax. Not a bad idea, but it would require either the generosity of landowners, which is unlikely, or the activation of citizens to take their democracy and make it work for the majority instead of the wealthy minority. Something that has not happened yet.
There is really nothing surprising that capitalism only work when political leaders represent the interests of all citizens rather than only the capitalist elites. I don’t think Piketty would disagree with this, but he doesn’t really offer a framework that would energize citizens to direct the economy. To limit economic analysis primarily to changes in income, with now more and now less going to labor or to capital, may motivate a few to try to improve things, but not many to transform them.
We need not to think outside the box, so to speak, but to change the box we think in. Instead of thinking about the distribution of income, we need to think about the distribution of provisions. Instead of thinking about increasing economic growth, we need to think about protecting the commons we all should share—especially the planet. Capital, after all, comes out of the commons. Just as all energy comes from the sun, all capital comes from the commons. Furthermore, money should not be treated as capital. It is a means to get what we deserve. If people are hungry, it is not because of the shortage of food, but the shortage of money to buy food. So, create the money. There should never be a shortage of money to buy food, or the other necessary provisions for a good life.
Let’s be truthful. Capitalism is driven by fear. Its origin is the Atlantic triangular trade, where enslaved Africans become the “property” of landowners. Slaves were not just labor. They were capital. Property rights are only the other side of this fear. As long as we are caught in this box, it is difficult to be too pessimistic. If we can build a new box, based on citizen participation and aimed at making provisions for all, we can have hope.
Christopher Boehm points out in his book on moral origins that one difference between humans and their closest cousins—chimpanzees and bonobos—is that we blush, a sure sign of shame.[i] Shame occurs when we experience a gap between how others see us and how we want to be seen. It turns out that our morality has its origins not in individual development, but rather in what evolutionists call “social selection.”
Boehm believes that when hunter-gather societies began to hunt large game, they required cooperation of all hunters, and this requirement made it necessary that the division of the kill would also be equally distributed. How else to ensure that all would participate fully in future hunts? Although the earliest humans may have been egoists, around 45,000 thousand years ago, when hunter-gather communities required cooperation for survival, they “become decisively equalitarian”[ii]
By itself, this equalitarian requirement would not have made humans moral. The moral conscience emerged because a few threatened this social cooperation. A few of the hunters sought to capture more than their share of praise for a successful hunt or to take more than their share of the killed game. These are the early thieves, cheats, and free loaders that we know all too well today. Our moral conscience, it turns out, emerged in dealing with such “deviants.”
Boehm found groups used various means to deal with such deviants. One common form was gossip. Gossiping about someone’s bullying antics might potentially so damage his reputation that he would not engage in such behavior again. Especially if one’s reputation was socially valuable in gaining access to community goods or a better mate. In Boehm’s research, he finds instances not only of shaming, but also of exclusion, ostracism, and even capital punishment. These acts of protecting an equalitarian social order had another consequence: they produced a consciousness of what one should be like. As hunter-gather communities protected themselves from bullies and other deviants, in other words, they also developed a sense of what they were protecting—egalitarian, and generous human relationship. What emerged over time was a consciousness not only of what was wrong (a bully) but also what was right (a generous person).
These two processes—the protection of social norms and their affirmation through internalization—do seem to go together. In any case, early human communities knew that the world was a dangerous place and their best way of living together involved providing for one another, and protecting their social practices of cooperation from thieves, cheaters, bullies, and sociopaths. I doubt if our world today is much different.
[i] Christopher Boehm Moral Origins: The Evolution of Virtue, Altruism and Shame (New York: Basic Books, 2012.
At the center of complexity theory is that idea that a whole system is larger than its parts, and that out of this wholeness emerges newness. This seems like a good description of some events and processes. It helps us understand them better. In other cases, it leads to misunderstanding. This is especially true when complexity theory is applied to economics and politics. The reason for the misunderstanding is that complexity theory tends to erase the part that human decisions and actions play in human history. One could say complexity theory may be good for understanding human behavior, but it does a lousy job in understanding human action.
Complexity theories tend to overlook the difference between natural and social systems. Social systems include not only events, processes, and feedback loops, but also choices. Humans make choices because there are alternative courses of action—things could have been otherwise and could be otherwise. Human decisions and actions must be included in any complete (complex) history of economics or politics.
Where complexity theory runs into trouble is when one uses its doctrine of emergence to interpret human systems. I remember a question and answer session with one of the leaders in the doctrine of emergence, Otto Scharmer. In this meeting, he talked about his book, U Theory: Leading from the Future as It Emerges (2009). The idea was that we need to slide down the one side of “U,” letting go of everything holding us back, until we reach the bottom, and then join the new that emerges on the other side. Scharmer said he got this theory from the German philosopher Martin Heidegger. Well, Heidegger certainly did have a strong belief in emergence. In the early 30s, he believed the rise of Nazism was an emergence of a new humanity. I asked Scharmer if he had known about Heidegger’s use of the doctrine of emergence, and more to the point, how he could discern if what was emerging was good or evil. To put it nicely, he didn’t have a clue. Neither did Heidegger, because whatever emerged was beyond good and evil. Wherever we erase human choices from social systems, as Heidgger and Scharmer do, we also ignore the distinction between good and bad choices—the moral dimension of human life.
The classic case of erasing human action from social systems can be found in Adam Smith’s The Wealth of Nations. During his years in Glasgow meeting with the tobacco lords of Glasgow (they made him a honorary citizen), Smith wrote about the invisible hand as the dynamic for economic development. How reassuring to these tobacco lords, whose enormous wealth depended on the tobacco plantations in Virginia and Maryland, that the hand that created their wealth was not the visible hand of the slave merchant or the slave owner, but the invisible hand of the market.
A fine example of writing human history that includes both trends and human choices is Orville Schell and John Delury’s Wealth and Power: China’s Long March to the Twenty-First Century (2013). They integrate deep collective motives and themes with individual choices by leaders and intellectuals. Sun Yet-Sen, for example, decided to align himself with the Russians rather than the West in 1923 and 1924. He made this choice in a thick context of social currents, of course, but he could have done otherwise, just as the Americans could have created stronger connections with China instead of Japan after the Second World War.
There are many strong trends today, and we all find our choices embedded in social systems. Still, if we cannot point out some of the choices that got us to our current situation and some of the choices that may move us toward a better future, then why bother?
1. Stop the selling of arms in the Middle East
2. Stop using drones against our enemies
3. Get people working with pay to build their communities
4. Eliminate the interest on student debt
5. Build public banks
6. Return citizen’s rights to released prisoners
7. Protect women from government intrusion
8. Decrease carbon emissions
9. Build renewable energy facilities
10.Get involved in representative politics
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