The French economist Thomas Piketty’s latest book, the provocatively titled Capital, is currently receiving a great deal of attention from certain sections of the media and thinktank worlds. I should start by saying that I haven’t yet read the book, and should therefore hold back on commenting on it. Breezily ignoring that advice to myself, do Piketty’s conclusions have any implications for political philosophy? [The interpretation and explanation of Piketty’s work that I rely on is taken partly from this review by Doug Henwood.]
At least in the mainstream of liberal theory, the answer is no, not really. Piketty’s most publicised finding is the same as Marx’s almost 150 years ago, namely, that in capitalist systems wealth tends to concentrate in fewer and fewer hands. It’s the old adage on which investment banks and hedge funds are built: ‘money begets money’. The lesson that Piketty takes from this is that in capitalist systems, barring disasters like war, wealth inequalities tend to increase over time, as the rate of return on capital increases at a greater speed than national output, most importantly wages. So even if the poor get richer, the rich get even richer: a rising tide lifts some boats more than others.
John Rawls, the most significant political philosopher of the twentieth century, included in his famous theory of justice, what he termed ‘the Difference Principle’. This principle states that strict equality may be abandoned so long as these inequalities materially benefit the least advantaged in a given society.
The principle, which is one of the most discussed topics in political philosophy (and some would say one of the most tedious), is arguably indeterminate as to the actual width of inequalities that a just society may permit. If wide inequalities improve the material conditions of the least advantaged people (read: the structural poor), then those inequalities are just.
There doesn’t seem, to me at least, a major intersection between the descriptive (Piketty) and normative (Rawls) accounts of inequality here, and as a result, Piketty’s findings, if true, don’t have much bearing on Rawls’s Difference Principle. At the point at which inequalities cease to be to the benefit of the least well-off, Rawls’s theory tells us to act to limit or reduce those inequalities through some form of income or wealth tax. His theory deliberately fails to tell us exactly when this point is reached. It was likely reached long ago in both the UK and the US, but Piketty’s book does not give this judgment any further justificatory force.
What this may indicate is a deficiency in Rawls’s theory. There have been many forceful criticisms of Rawls’s form of egalitarianism, and luck egalitarianism more broadly. The most vigorous, in my view anyway, is this article by Elizabeth Anderson.
It may also indicate a deficiency in another way. Rawls’s focus, especially in his earlier work, was on the idea of justice and of what a just society might look like. This foucs, as the political philosopher Raymond Geuss has pointed out, is to the detriment of another important issue: power.
The extent of the inequalities that we currently see in developed liberal democracies may be beneficial to the worst off (then again they may not, and in my view aren’t), but this is not the sole criterion by which we can judge inequality. The cliché ‘money is power’ has been largely proved right in the twenty-first century, and it is the inequality of power that money elicits, rather than the material differences it permits, that may lead critics to condemn it. As this recent NASA-funded piece of historical ‘futurology’ worryingly told us, one of the key causes of civilizations’ collapse is social inequality. Rawls’s theory, on this interpretation, doesn’t allow for a condemnation on these grounds, and inequality can flourish if the poor get better off, even if the power inequalities this allows destabilise society and hasten its collapse.
All of this relies on a fairly ungenerous or caricatured account of Rawlsian liberalism, but I think it points to a much more troubling problem for political philosophy. As the realist movement in political philosophy has argued, contemporary liberal theory in the Anglophone world does not give us an adequately action-guiding account of power in contemporary politics. Specifically with reference to Piketty’s findings, it is ill-equipped to respond to the power generated by footloose globalised wealth and its idealisations and abstractions make it impotent when faced with the real exercise of (wealth generated) power. It may also suggest that liberalism’s accommodation of the facts of capitalism is more pernicious than previously thought.
Piketty’s book may not have relevance for a narrow conception of political philosophy, but it may encourage us to widen that conception if we want to have a normative basis for opposing widening inequality.