Thomas Frank — The problem with Thomas Piketty: “Capital” destroys right-wing lies, but there’s one solution it forgets

After "Capital," we'll never talk income inequality or meritocratic myths the same way. But we must talk unions...

Is revising the unions the solution? Frank thinks so.

Piketty’s biggest blind spot is that he has virtually nothing to say about labor unions. He starts Chapter 1 of “Capital” with an anecdote about a bloody strike in South Africa and he returns to that same tragic episode at the very end of the book, but in between he addresses the matter almost not at all. Piketty talks a good game about democracy, but like other economists who have made inequality their subject, he prefers solutions that are handed down from the lofty heights of expertise.

The best remedy for inequality, however, is the one that comes up from below. Economists may not think very highly of those hardened people in SEIU t-shirts—some of them smoke too much, some are suspicious of “free trade,” some of them (gasp!) didn’t go to college—but the fact remains that in nearly every particular they represent the obvious and just about the only social force on the ground in America that might bend the inequality curve the other way....

Consider the crazy imbalance in the current capital-labor split, which is the central thread holding together Piketty’s enormous book. Well, having strong unions that are able to negotiate effectively would remedy this situation almost by definition. That’s the idea of unions in the first place....

The disappearing middle class? This is labor’s grievance par excellence. The minimum wage? Labor is always the loudest voice calling for an increase. Stratospheric college tuition and student debt? The AFL-CIO has been admirably forthright on the issue. Social Security and the rest of the welfare state? There is no more dedicated supporter than organized labor. Were labor strong instead of weak, privatization and the other attacks on the welfare state would probably never even come up. Certainly no Democratic president would be able to say, as Barack Obama did in one of his debates with Mitt Romney, that his own position was “somewhat similar” to the Republican’s on this issue.

Salon
The problem with Thomas Piketty: “Capital” destroys right-wing lies, but there’s one solution it forgets
Thomas Frank
(h/t Lambert Strether at Naked Capitalism)

On Thomas Jefferson and hereditary wealth and privilege:

As Gustavus Myers tells the story, there were victories and defeats in America’s long war against inherited privilege, until finally we get to the twentieth century and the estate tax, which make up the final chapters in the journalist’s account. Although it was established in 1916, the tax on inheritance was raised to deliberately confiscatory levels in 1935. The rationale then was as plain as it was in Jefferson’s day: Americans raised that tax because Americans detest aristocracy. “Great accumulations of wealth cannot be justified on the basis of personal and family security,” said President Roosevelt, on the occasion of demanding the massive increase in estate taxes. “In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.”

Check the IRS website today, however, and you will find that critical moment in tax history explained not as the expression of a leveling social policy but merely as a way to “generate needed funds.” Our contemporary debate over inequality is the same: a bland, technical matter of thinktanks and academic conferences and debates among professional economists—just another problem for the experts to solve. It is as though we have completely forgotten the democratic passions that drove our ancestors.

Well, the right certainly hasn’t. Their policies may give us things like perpetual trusts—legal instruments designed to cement the privileges of the plutocracy many generations into the future—but the right’s rhetoric always goes back to sympathetic souls like Jeffersonian family farmers who are supposedly put at risk by the “death taxes” of those grasping government elites....

As Gustavus Myers told us back in 1939, bringing the aristocracy to heel is entirely within our power and our tradition, and American statesmen from Jefferson to FDR (the man on the nickel, the man on the dime) have taken enthusiastic part in the business of leveling. There is nothing utopian about it at all. It is not an opium dream to imagine that Grover Norquist and company might one day be defeated or that the estate tax might be brought back in full Rooseveltian force; both are eminently possible, if only the Democrats would pull their heads out of their butts.

The political problem now is that both parties represent different cohorts of the wealthy.