Parsons, A. (2014). Thomas Picketty’s Great Inequality Debate is Missing a Solution. Solutions 5(6): 1-3. https://thesolutionsjournal.com/article/thomas-pickettys-great-inequality-debate-is-missing-a-solution/
Editorial by Adam Parsons
Thomas Piketty’s Great Inequality Debate is Missing a Solution
T
he year 2014 may be seen as a turning point in the public debate on inequality, which is in large part thanks to Thomas Piketty’s best-selling book Capital in the TwentyFirst Century.1 There is no doubt that Piketty’s tome of analysis has done a great service for progressives in that it uses comprehensive data sets to discredit the prevailing economic ideology of our time.2 It is no longer just common sense to presume that extreme wealth is not good for everyone, and that the invisible hand of the free market will never lead to a fairer sharing of wealth among the population. However, many questions remain about Piketty’s blanket solution of a global tax on wealth, which he firmly places within the context of a market-dominated and consumerdriven economy. While such a tax may constitute a rational response to the continuing upward redistribution of wealth and income in advanced capitalist economies (even if it is a “usefully utopian idea,” as Piketty himself admits),3 it proposes merely reform and nothing to change the source of systemic inequality. Many critics of Piketty’s book have pointed out that the surest path to reversing inequality within countries is through strategies that create a better distribution of capital in the first instance, rather than relying on top-down, quick-fix, and state-centric strategies afterwards.4 In other words, it’s more effective to address the distribution of wealth at its source,
including through changes in institutions and policies to make pre-tax income distribution less unequal. This will inevitably demand the collective organization of labour, the protection of workers’ rights, and new ways for capital to be owned broadly by the populace—such as a dramatic ramping up of participatory ownership through cooperatives.5 These people-driven solutions point towards the shifts in power that are needed to create truly egalitarian societies, although this is a subject that Piketty leaves largely unaddressed. By far the greatest blind side to Piketty’s analysis, however, is his failure to take seriously the ecological limits to growth.6 It is clear that he defends the free market and the idea of perpetual economic growth, since his proposal for a global wealth
Tony Roberts
Picketty’s best-selling book has sparked public debate on inequality, but the text offers only ideas for reforms rather than challenges to the economic paradigm.
These people-driven solutions point towards the shifts in power that are needed to create truly egalitarian societies, although this is a subject that Piketty leaves largely unaddressed. tax assumes that wealthy countries will continue to grow at a rate of 1.2 percent (with a global growth rate of up to 5 percent). Nowhere in the book does he admit that infinite growth is unsustainable on a planet with finite resources, a position which is now conventional wisdom for many scientists,7 environmental activists,8 and civil society organizations.9 If degrowth on a global level is inevitable sooner or later—and there is enough evidence to suggest that it is—then the implications go far beyond Piketty’s solutions for how we can achieve a just and sustainable
world.10 When the pie cannot be grown any larger to share it out, much more serious questions of distribution arise given the planetary boundaries that economies are already hitting hard.11 As succinctly put by Herman Daly: “is not the solution to poverty to be found in sharing now, rather than in the empty promise of growth in the future?”12 To be sure, we cannot grow our way into a vision of prosperity for all that replicates the North American or Western European standard of living worldwide. Which leaves us with only one option: to share the
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