Thomas Pikettys Plan to Fix the Economy – The New Republic

Today, Piketty proposes, we live in a neo-proprietarian inequality regime, which takes the logic of the inviolable right to property and extends it to wealth and income (which was, by the way, Carnegies argument in 1889). The extraordinarily high incomes of tech executives, corporate lawyers, and unicorn entrepreneurs, their defenders argue, are theirs to keep, because they are earned in a dispassionate meritocratic system, largely emanating from our countrys higher-education institutions. Of course, we know now the dispassionate meritocracy is a lie; its a system that allows people with a head start to stay ahead. The ruling class is defined and legitimized by educational credentials; our last five presidents have all had Ivy League degrees, a fact that shows only a weak correlation between education and competence. The meritocracy, in fact, is quite similar to the purportedly dispassionate system of contracts and rational government that legitimized the concentrated wealth in France and the United States after their revolutions.

Pikettys solution is that we move beyond private ownership to some blend of private, public, and temporary ownership. (Total abolition of private property, la Soviet Union, for Piketty, was an ill-advised failure.) Since many societal goods are often already owned publicly, like electrical grids, highways, or parks, and some are owned communally, like worker cooperatives, it is easy to imagine this realm expanding. Temporary ownership is different, and would require permanently high levels of taxation (perhaps written into a countrys constitution) to ensure that any number of temporarily private goods return to the community on a regular basis. Homes, wealth, real estate, patents, and financial assets like stocks and bonds would all benefit the community if they were owned only temporarily.

A steep wealth tax could also pay for a onetime capital grant that everyone would receive in their twenties, at 60 percent of the national average wealth (something like $120,000 if the average wealth is $200,000). Piketty also believes that a singular faith in the power of central government to bring big business under control, whether through nationalization or regulation, is mistaken. The reliance on state ownership of major industrieslike that in France and Britain up to the 1980sleads to a neglect of taxes on private enterprise. Taxes, Piketty stresses, are some of the only tools that can perpetually protect the society against developing unconscionable inequalities of wealth and incomes.

The weakest parts ofCapital and Ideologyrail against identity politics, which Piketty believes have stymied the project of egalitarian reform, by splintering the larger coalition that is required to make egalitarian change. Yet with both sides of the political divide practicing some form of identity politicsoften along the lines of race, gender, or religionits not convincing to dismiss this trend in politics out of hand. In the United States, history has proved how difficult it is to redistribute wealth and property when confronted by sexism, xenophobia, and extreme racism, along with the legacies of slavery and Jim Crow. Which should we resolve first? Redistribution through reparations for slavery? Land grants to Native Americans whose lands were stolen? Or what about unpaid wages for care work? Piketty has little to say about the order in which we approach these problems, crucial for a country struggling to come to terms with its past.

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Thomas Pikettys Plan to Fix the Economy - The New Republic