Thomas Piketty's Return to Marx

The international left has fallen on hard times. Since the Berlin Wall fell and the Cold War ended, leftist intellectuals have been forlorn.

Communism was a great idea. It was the great hope for the future of mankind. Theoretically, it made perfect sense. How could it have been defeated by the mini-minds of a nation like America?

It was déjà vu all over again.

Many serious Continental thinkers never forgave America for winning World War II. They might not be willing to admit it, but many French thinkers were horrified at the thought that their great nation needed British and American troops to liberate it from its Nazi occupier.

With the fall of Communism they deftly shifted their anger and contempt: they hated America for having won the Cold War. Being good Marxists they believed that world history would eventually punish the Great Satan.

To restore their dignity as serious thinkers, especially as thinkers who were so smart that they were never wrong, leftist intellectuals set out to punish America for defeating Communism. They would do everything in their power to undermine its liberties, the better to prepare the way for the Second Coming of Marx.

By their analysis, capitalism’s victory was Pyrrhic. Capitalism’s internal contradictions, as the Marxists called them, remained. In time, capitalism would produce such a glaring societal chasm, so much raw inequality between the very rich and the rest that conflict would be inevitable. This would lead to a new world government that would usher in a golden era of equality in a new Worker’s Paradise.

Leading the return to Marx is French economist Thomas Piketty. In his new book, one that has set leftist minds aflutter on both sides of the Atlantic, Piketty argues that capitalism must necessarily give rise to a rentier society where wealth is concentrated in the hands of very few.

Apparently, Piketty does not focus very often on America, but, one might argue that the new socio-economic order replicates the structure of a decadent aristocracy that lives off its dividends while the rest of the nation eats cake. Why should we credit this to capitalism?

We will grant that America is suffering from considerable income inequality. We will also grant that Democratic politicians have been riding the inequality donkey because they are terrified of running on Obamacare in the next election.

If we use America as a test case, we might ask whether the blame for this situation lies in Reagan tax cuts and deregulation, as Paul Krugman says, or whether the situation is more complicated than it first appears.

Even before the Soviet Empire imploded on itself, American capitalism was fighting what appears to have been a losing war against those who would undermine it in the name of social justice and equality.

Beginning with Lyndon Johnson’s Great Society, America’s government has been empowered at the expense of the individual. Thanks largely to liberal Democrats and their Republican enablers, America has become an entitlement society, where everyone is guaranteed a living even if he or she does not work. And stifling government regulations are preventing people from starting and expanding business.

Sad to say, but Obamanomics has aggravated inequality. None would seriously call it a free market, capitalist policy.

Moreover, as has often been noted, the richest of the American rich are invariably Democrats. Whether tech oligarchs or Wall Street bankers or hedge fund managers—think George Soros—this group happily supports all liberal causes.

They are perfectly willing to throw a few crumbs to the underprivileged, but they thrill to the notion that government bureaucracy is stifling any entrepreneurs who would compete with them.

Thomas Piketty has become the new champion of state socialism of the Marxist variety has a new champion. His new book, Capital in the Twenty-First Century, has been cheered as the latest and greatest critique of capitalism. Left-leaning thinkers, like Paul Krugman, are cheering from the rafters.

With Piketty, redemption is finally at hand. His prophecies will lead us out of capitalism and toward a new, egalitarian socialism.

About the horrors unleashed by Marxist governments, horrors that far exceeded the moral depravity of our decadent new Gilded Age, today’s Neo-Marxists have nothing to say.

Nothing except their insistence that totalitarian Communism was not the real Marxist deal.

Nor do the great minds who are mulling over this return to Marx have much to say about the difference between Mao’s China and Deng’s China. 

Where Communism produced a famine that starved tens of millions of people to death, Deng’s reforms reduced, within the space of three decades the extreme poverty rate from 82% to 14%.

Of course, when everyone was starving equally there was no extreme inequality. 

Obviously, I am not qualified to do anything like an analysis of Piketty’s statistics. For your edification I will skip to the good part: Piketty’s policy solutions to inequality.

Piketty proposes a wealth tax on capital and a tax of 80% on high incomes. Does this sound familiar? It should: it’s called the political program of the  French Socialist Party.

Piketty wants us all to become just like France. He wants the rest of the world to emulate a failed policy. Need I say, you have to be very, very smart to think such things.

France already has a wealth tax on capital, and the government of Francois Hollande did try to institute a 75% tax on high incomes. 

One recognizes that great minds do not lower themselves to the mundane and the profane, but you should ask yourself: How did that work out for France?

As it happened, the French Socialist Party just got destroyed in the last round of municipal elections. President Hollande fired his Prime Minister and is setting out on a more capitalist road.

The Economist reported the electoral that occurred two weeks ago:

A CRUSHING defeat at French local elections has intensified pressure on François Hollande to reshuffle his government. At a second round of voting on March 30th, Mr Hollande’s Socialist Party lost over 150 towns, most of them to the opposition centre-right. This morning, the French president was holed up at the Elysée, the presidential palace, consulting close advisers over reshuffle plans, which could be announced as early as today.

The Socialist losses were devastating. Although, as expected, the party hung on to Paris, where Anne Hidalgo becomes the capital’s first female mayor, the rest of the country snubbed the ruling party. Among the more dramatic losses were Toulouse, a city in the south-west that it had thought was safe, Roubaix  and Tourcoing, two industrial cities in the north with a deep left-wing heritage, and a string of other cities, including Amiens, Caen, Tours, Reims and Limoges, held by the left since 1912. Even some towns in the Paris region, which had been governed by Communist Party since the second world war, such as Villejuif, swung to the right.

High taxes and regulations, accompanied by a bloated bureaucracy have produced economic stagnation in France. Worse yet, it has induced France’s best and the brightest to pack up and leave France. As I have reported, the French presence in London has exploded during the Hollande era.

Of course, Piketty is well aware of this problem. He knows that when one nation taxes capital excessively, capital moves to another, friendlier nation. How much French wealth is in Switzerland? How much Argentinian wealth is in Uruguay, New York and Miami?

To solve this problem Piketty proposes something like a world governmental agency, one that could, in principle, prevent people from moving capital to safe havens around the world.

This dream of world government, more delusion than illusion, feeds the dreams of the Neo-Marxist left. It’s better than trying to explain the catastrophe that Marxist governments unleashed through the better part of the twentieth century. It’s far better than taking responsibility for those calamities.