Seth Ackerman — Piketty’s Fair-Weather Friends

Does Capital In the Twenty-First Century represent a new departure for modern economics? Is Palley right to fear that Piketty’s book will be domesticated? Is Krugman right to hold it up as a vindication of the mainstream? And does it make a difference? 

It’s been pointed out that in France, where Capital in the Twenty-First Centurywas first published, Piketty and his book got nothing like the rock-star reception they found in America. The difference, it seems clear, was due to the book’s relentless prepublication promotion here by a cadre of prominent liberal economists and friendly commentators who have long sought to push the subject of inequality to the center of American public debate. Obviously, they’ve succeeded more than they could have guessed.

But as the book is digested, it’s increasingly doubtful whether (or how) its arguments can be reconciled with the MIT-style economic paradigm to which Piketty’s most ardent American promoters — liberal economists like Joseph Stiglitz, Paul Krugman, Brad DeLong — swear allegiance. Piketty is having trouble on his liberal flank.

He’s having trouble on his left flank, too. For example, Thomas Palley, a left economist formerly with the AFL-CIO, has expressed the fear that after the excitement dies down, “Piketty’s book may end up being Gattopardo economics that offers change without change” (a reference to Giuseppe di Lampedusa’s 1963 novel of the Italian Risorgimento in which a nineteenth-century nobleman tells his uncle that “if we want things to stay as they are, things will have to change”). Suresh Naidu likewise warns of the potential for a “bastard Pikettyism” — a mainstreamed re-interpretation of the book that domesticates its critical messages.

In a response almost calculated to confirm Palley’s fears, Paul Krugman, the very model of the MIT liberal, chimed in. For him, the lesson of Capital in the Twenty-First Century is that mainstream theory has shown its worth: “You really don’t need to reject standard economics either to explain high inequality or to consider it a bad thing.”

Jacobin
Piketty’s Fair-Weather Friends
Seth Ackerman, an editor at Jacobin and a doctoral candidate in history at Cornell