Thomas Piketty’s bestselling Capital in the Twenty-First Century galvanized global debate about inequality. In his audacious follow-up, Capital and Ideology, he exposes the ideas that have sustained inequality for the past millennium, reveals why the shallow politics of right and left are failing us today, and outlines the structure of a fairer economic system. We caught up with him to ask about his new book and to discuss the politics behind the long history of inequality.
Capital in the Twenty-First Century was an unusually ambitious book. What prompted you to write another major book so soon?
I’ve learned a lot since the release of Capital in the Twenty-First Century. I was invited to countries about which I knew little, met new researchers, and participated in hundreds of debates. All these exchanges pushed me to renew my reflections. To summarize Capital briefly, it showed how, in the twentieth century, the two world wars led to a very strong reduction in the inequalities inherited from the nineteenth century. I also pointed to the disturbing ascent of inequalities since the 1980s. But the book had two main limitations. The first is that it was very Western centered. In this new book, I widen my scope: I examine the history of “ternary societies” [organized into three classes: nobility, clergy, and workers] and societies of owners or proprietors, but I also study slavery societies, colonial regimes, communism, post-communism, social democracy, the case of castes in India, and inequality regimes in Brazil, China, and Russia. The second limitation is that Capital only scratched the surface of the deep question of the ideologies that support inequalities. It was a black box that I decided to open.
What is the fundamental argument you’re making about these ideologies?
I tell the story of many unequal regimes, and the conclusion that emerges is that dominant ideologies are always much more fragile than we imagine. Inequality is a political construction, not the product of “natural” forces of the economy or technology. Every society needs to tell itself a plausible story to show why inequalities are acceptable, to justify the organization of social groups, and to explain the nature of property, borders, the tax system, and education. Revisiting this story allows us to see our current ideologies from a different perspective. We often have the impression that inequalities from the past were necessarily unfair and despotic and that those of the present are necessarily meritocratic, dynamic, open. I do not believe a word of it. Macron's “leaders in the rope line,” the job creators of Trump, the glorification of fortune whatever its number of zeros: all this speech is as religious in its way as traditional and explicitly religious justifications for inequality.
In your account, history has lurched from one regime of inequality to another, but you’re nonetheless optimistic. Why?
History shows that it is impossible to predict the evolution of regimes of inequality. Take Sweden: we sometimes like to say that the Swedish social model feeds on a very old culture, going back to the Vikings. In fact, Sweden was for a long time an extremely unequal country. The census system until 1911 stipulated that the owners of the biggest fortunes could have up to one hundred votes per person! Political mobilizations have transformed the country. If someone had predicted in 1910 that Sweden would become a social democratic country, nobody would have taken it seriously. That’s why I do not believe that the current system is indestructible or cannot be transformed.
If inequality has been rising since the 1980s, why haven’t political parties mobilized to reduce it, as they did after World War II?
The main political parties have radically changed since the 1980s. In the social democratic era that followed the war, the poorest and least-educated classes identified with parties of the left, whether Democratic, Labour, Socialist, Communist, or Social-Democratic. But in the age of hyper-capitalism, parties of the electoral left ceased to make improving the lot of the disadvantaged their main focus. Instead, they turned their attention primarily to serving the interests of the winners in the educational competition. Left-wing political parties and movements turned themselves into representatives of the highly educated. We now have political systems dominated by two elites: what I call the wealthy “merchant right”—the Republicans, the Conservatives, and so on—and the highly educated and generally prosperous “Brahmin left,” represented by the Democrats, Labour, and Social Democrats. The least advantaged no longer see themselves in the electoral left. This has left an opening for nativists and other opportunistic politicians to seek their support. But this may be changing, even in the United States, as catering to the highly educated does not reflect the egalitarian values of an important part of the Democratic electorate.
You conclude the book with a series of recommendations for economic and social reform, which include the adoption of German-style co-management of businesses.
The real challenge of our societies is that of power: there has been a capture of economic power and politics by private money. I sketch in the book a form of “participatory socialism,” the opposite of hyper-state Soviet socialism, which led to disastrous results. Co-management offers this possibility. Only Germany and the Nordic countries have followed this path since the 1950s, but the Labour Party in the United Kingdom and the Democrats in the United States have begun to reflect on it. In Germany, employees are allocated half of the voting rights on the board of directors for large companies. In Sweden, it's a third, but this also applies to smaller companies. Such a system has made it possible to have less excess than elsewhere in the payment of executive salaries and a better investment in employees. I propose to go further, by limiting the voting rights of the largest shareholders to allow smaller shareholders to enter the game and form coalitions with employees.
You also want to reform property tax so that it funds a “universal endowment of capital”? What’s that?
Currently, half of the population inherits nothing at all. I imagine a kind of “legacy for all.” At the age of 25, all people would receive a capital endowment of something like 120,000 euros, which represents 60 percent of the average wealth per adult in France. This could be used to buy your home: this would stop society being divided between those who pay rents—often generation after generation—and those who, also over the generations, own and receive rents. It would also encourage people to create a business and motivate employees to buy shares in their company. This would be financed not only by the proceeds of the inheritance tax but also by a progressive tax on net wealth. This new form of progressive property tax would ensure the permanent circulation of property and guarantee that very large wealth holdings do not perpetuate themselves.
Another area you focus on is education.
If we look for an explanation for the halving of the rate of economic growth since the 1990s, I suggest we should be interested in educational underinvestment. Education expenditure has stagnated in all developed countries while the number of students has risen sharply.
Do you consider the book a blueprint for getting beyond capitalism?
We can’t promise the abolition of capitalism without debating long and hard about precisely what will be put in its place. I try to contribute to that debate.
You’ve said in French interviews that you prefer this book to Capital in the Twenty-First Century.
Yes. I think I’ve made some progress and that this new book is much better. If you read only one of the two, please read this one!