Piketty on the Covid-19 Crisis: “It Is High Time to Use This Opportunity to Counter the Dominant Ideology and Significantly Reduce Inequality” — ProMarket interviews Thomas Piketty

“Inequality is neither economic nor technological; it is ideological and political.” Thomas Piketty’s latest book, Capital and Ideology, is a 1200-page tome chock-full of facts, figures, policy proposals, and digressions that defies easy categorization, but its main argument can be best summed up by its opening line....

Ideology is the lens through which one views reality. The angle of vision or "spin," so to speak, shapes how one perceives and conceives reality as an individual in a cultural and social situation that influences one's way of seeing. 

Economic liberalism is learned as being compatible with the other aspects of liberalism, social and political, and, indeed, a prerequisite for them. Economic liberalism pretends to be a way of seeing through the lens of science, therefore, "naturally," just setting forth things that are objectively.

Inequality is a function of choices that affect distribution and these choices are largely a matter of policy that is expressed through institutional arrangements and attitudes. A lens based on economic liberalism is ground so that profit and rent flow to the top, because growth, the chief priority of society, is based on capital accumulation. The rationale is that growth leads to a higher standard of living as a tide hat "lifts all boats." The name for this assumption is trickle down.

While this is true to a degree, absolute numbers do not tell the whole story. The relative numbers that result lead to social dysfunctionality. Why? Because economic liberalism is in the final analysis incompatible with social and political liberalism owing to the increase in asymmetric wealth and the power to which it leads.

Those at the top lose the vision of the whole and the consequences reverberate through the entire society. They are not so noticeable during good times, but they stand out in bad times.

Worth a read.

I think it’s a much better book. My previous book was too centered in Western Europe and North America. It was not entirely my fault, due to lack of access to proper data, but it was also a limitation in my thinking. I was very centered on how World War I and World War II reduced inequality in Europe, and to a lesser extent in the US.

But from the point of view of inequality in Brazil, or India, or South Africa, or China, World War I and World War II are not so important, or at least they don’t have the same critical importance as in Western Europe.

In this new book, I take a much broader comparative perspective of what I call inequality regimes, which in my view are systems of justification of inequality—a system of institutions that try to organize a certain level of equality or inequality between social groups....

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Piketty on the Covid-19 Crisis: “It Is High Time to Use This Opportunity to Counter the Dominant Ideology and Significantly Reduce Inequality”
ProMarket interviews Thomas Piketty