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Symposium: "Capital and Ideology"

History Starts Now: Reflections on Piketty’s Inequality

Amos Witztum
p. 143-160
Référence(s) :

Thomas Piketty, Capital and Ideology, Cambridge, MA: Harvard University Press, 2020, 1104 pages, 978-067498082-2

Texte intégral

1Sympathetic as I am to Piketty’s burning desire to expose the ever-increasing inequalities in wealth and to alert the world to the difficulties associated with it, I found the reading of his recent tome, Capital and Ideology, difficult to digest. Paul Krugman notes in his review of the book in the New York Times that in part, the extent of the book (both in terms of length and cover), may reflect a lack of focus. To me, however, it was the apparent focus of the book which caused considerable unease.

2There is nothing unique, surprising or radical in being appalled by the yawning gaps in the distribution of wealth. Nor is there anything new in realising that these gaps have been around for a long time. No one in his right mind will find it acceptable that a man in his twenties should own great sways of London and it is blatantly clear that there is a need to rectify this situation through an act of re-distribution. One does not need a thousand pages to say this. Half a page would suffice. Equally, it is not at all convincing to say that the reason why almost a hundred years of universal suffrage have not produced the political will required for a massive act of re-distribution is because the public—those ostensibly sovereign agents—has been duped into seeing merits in such inequalities. If one does not believe in the ability of the public to form informed opinion, one is not really a democrat. More to the point, it is no less true, and even more urgent, that while wealth inequalities are disturbing, their implications are not as immediate and as disturbing as the direct effects of market operations. For instance, the gap between the earnings of a premier league footballer, or just ‘celebrities’, and those of school-teachers, or nurses, is far more an immediate and alarming concern; and more complicated to resolve by a mere re-distribution of initial endowments. This book says very little about the latter (the earning gap), nothing new about the former (wealth inequalities) and the explanation it offers for the absence of political will is wholly unconvincing.

3Indeed, many people, economists included, share the sentiments that there is something wrong with the way the distribution of wealth and income has been developing in recent years. It is common knowledge that after a moderate fall in inequalities within most industrialised countries in the post-WWII period, there has been a noticeable deterioration in these measures since the 1970s. The main characteristics of this post Bretton-Woods period are the new phase of globalisation which now includes free capital mobility and the rise of markets as the dominant means of economic and social organisation. Most people would also acknowledge that inequalities in wealth were considerable in the past. In these respects, there is no real novelty in the book—though I hasten to say that Piketty himself has contributed a great deal to the exposure of contemporary and past wealth inequalities, not least in his previous book. So, one wonders, what is the purpose of the new book? Well, the purpose of the book seems to be the elevation of wealth inequalities into the most important—nay, sole—determinant of social life. In this sense, the entire history of political philosophy—which Piketty calls ‘ideology’—must be viewed through the prism of its attitudes and justifications of inequalities, which subsequently helped to sustain them. When social regimes (which Piketty would identify as ‘inequality regimes’) do collapse, or change, this is either because inequalities became excessive or because of the failures in their justification. In other words, the history of the world is an interplay between the realities of inequality and the way in which they have been justified.

4For a book that puts inequality at the heart of human history, discussions about the meaning of the concept of equality (and hence, inequality) and the ways in which it can be measured are staggeringly absent. The reader must conclude, therefore, that there is only one meaning—though different manifestations—to inequality, and it is all about economics. More specifically, it is all about wealth inequality, and the dominant way in which it is measured is through the share in wealth of the top 1% or its equivalent (i.e., wealth concentration). Though Piketty claims that he is not a Marxist, this approach to the problem suggests that he is indeed one in perhaps the most fundamental way: human relationships are fundamentally economic relationships. Unlike Marx, however, Piketty fails to create a coherent system of thought that could explain both ethical aversions and historical dynamics derived from the idea of inequality. One does not have to agree with Marx, but one can understand the logic of his argument. In the case of Piketty, it seems that we find ourselves at the opposite end. We may agree with his concerns and some of the conclusions about the need to rectify wealth inequalities, but it is difficult to either understand or accept the logic of his argument. Allow me to explain my position.

5The main message of Piketty’s book, as it appeared to me, is comprised of two related themes:

  1. No society can subsist with inequalities unless they somehow become acceptable. The acceptability of inequality cannot really be based on any objective reasons like, say, technology or natural differences between individuals, but rather on what Piketty calls ideology which is, in fact, no other than political philosophy (broadly conceived). The persistence of inequalities in a world of historical changes suggests a concomitant development of inequalities in the real world and the way in which these inequalities have been perceived in the world of ideas.

  2. The fundamental causes of inequality are boundaries and property rights. Therefore, to achieve equality, borders must effectively be abolished and property (wealth) more equally distributed by curtailing inheritance and the introduction of additional taxation. This, Piketty believes, with the help of education, broader participation in ownership and greater democratisation of politics (through vouchers), will lead to an ideal of equality which he names Participatory Socialism.

  • 1 Though Chapter 14 in the book is devoted to borders, property and equality, I cannot consider this (...)
  • 2 To be fair, Piketty is a bit vague on this and calls for more thinking, but he does think that the (...)
  • 3 Here again I hasten to qualify that Piketty does talk about social ownership as a long-term objecti (...)

6Most of the book is devoted to espousing the first theme. The second theme—though more fundamental than the first one—does not really get a proper treatment and seems to be accepted more axiomatically1. Namely, if we accept the premise that inequality is caused solely by boundaries and property rights—both of which suggest the exclusion of others (not fully appreciated by Piketty)—then there is no need for an elaborate historical analysis to reach the conclusion that equality could be achieved only if the two were either abolished or seriously modified. In spite of the embedded symmetry between the effects of boundaries and property rights on inequality, Piketty’s treatment of them is very different. While Piketty seems to go all the way to the inevitable conclusion with regard to boundaries,2 as far as property rights are concerned, his logic leads him in a different direction—which is not really explained—and he seems to be content with their redistribution, rather than their abolition.3

7Piketty considers himself a radical thinker, but he is nothing of the sort. A radical thinker who followed Piketty’s premises would have written a thesis about a world without borders and property rights (as indeed was the case when Marx reached the conclusion that capital is theft). But the way Piketty treats these two concepts is unashamedly neo-classical. Namely, it is easy to show that his apparent radical solutions are very much in line with the orthodoxy of modern economics and no economic textbook would need to be significantly modified as a result of this book.

1. Radical Neo-Classicism?

  • 4 In fact, increasing the number of participants reduces the core of efficient outcome and therefore, (...)
  • 5 Indeed, from the end of the Second World War onwards a great deal of effort has gone into the proli (...)

8It is important to bear in mind that the paradigm behind modern economics suggests that decentralised decision-making coupled with the allocation of property rights generate a spontaneous order that is both universal and ethically neutral. The implication of this is that regardless of differences in social values across societies, competitive institutions (based on property rights) can be applied to all societies. Furthermore, that which is true for each individual society is also true for the world at large. In other words, there are no limits to the size of the economic system in which competition can allow each individual to solve his, or her, economic problem and for the collective, to direct the solution towards that which is socially valuable.4 Hence, the effective abolition of borders is very much in line with economic orthodoxy and more broadly still, with neo-liberalism. In fact, contemporary globalisation, which is marked by capital mobility, is nothing short of an attempt at transcending the competitive order from trading sovereign nations to one happy economy.5 From the perspective of economic analysis, for the system to be effective (in terms of the interest of the participating individuals) it must equally allow the free mobility of labour and hence, abolishing borders is not only not a rebellion, but a necessary step towards the subjugation of the world at large to the power (some would say: the freedom) of the markets.

  • 6 I explain elsewhere why Keynes falls into this category (Witztum, 2013).

9The fact that Piketty chose to deal with the distribution of property rights rather than their abolition is another indication of his submission to economic orthodoxy and the idea of markets. While property rights are an important building block of the competitive paradigm, their distribution is an open question which squarely remains in the domain of social preference. I am referring here to what one may call the correction approach which was instigated by Pigou in 1920 (Pigou, 1920). According to this approach—which is equally applicable to Keynes6—the idea behind modern economics, according to which decentralised decision-making (markets) generates a spontaneous order, occasionally needs some corrections to align itself with social values. For Pigou these were distributional issues, for Keynes, unemployment.

  • 7 See, for instance, Arvind Subramanian’s review in Foreign Affairs, July/August 2020.

10Therefore, in spite of the apparent audacity of Piketty’s proposals, his analysis not only reflects total commitment to the principles of modern economics as a way of organising economic and social activities, it also upholds a one-dimensional perspective on the world based on purely economic considerations, which is part and parcel of modern economic thinking (and paradoxically, a common ground, in principle though not in content, with Marx). In modern economics, the mechanisms of the markets (competitive interactions) are deemed morally neutral as they can, in principle, support any possible allocation which society may desire. Assuming that society will always desire allocations which are efficient and assuming that what guides social preferences are moral values, then the implication is that the only thing to do to achieve the desired outcome is to re-allocate initial endowments (i.e., re-distribute wealth). This is all captured by the well-known Second Welfare Theorem. In fact, Piketty seems to say little else except that the means for such re-allocation are achieved through non-lump-sum taxation and in particular, through the eradication of intergenerational inequality through heavy inheritance taxation. To a modern economist, this would mean that the outcome will not be a first-best, but it can certainly be a second-best in the sense that some efficiency will be paid to achieve greater equality. Indeed, some reviewers7 made this the key aspect of their critique by suggesting that the efficiency cost for the taxation regime advocated by Piketty will be such that the cake to be shared will shrink too much (i.e., it would be something that should be rejected on the grounds of the second-best principle). But I would not necessarily accept this line of critique as I believe that there is more to productivity (and hence, efficiency) than incentives. The motivation of agents matters too and this, in a better world, may be sufficiently enhanced to offset the incentive effects that the redistribution will produce. Therefore, if we accept that this is all a welfare exercise within the correcting regime of neo-classical economics, Piketty’s Participatory Socialism is just another attempt at finding a form of market socialism which leaves markets—or decentralised decision-making—and property rights (as diffused as one desires) as the fundamental mechanisms of social and economic interactions.

  • 8 By desert I am referring to the principle of proportional remuneration. This is a principle accordi (...)
  • 9 Again, see a discussion in Witztum (2019, chapters 2-4).

11In many respects, Piketty’s vision is an exploration of the well-established idea of equal opportunity. To be fair to him, it is not only wealth which concerns him, but education too. One cannot but agree with this in principle, but at the same time, one must note that there is another question regarding the kind of education one is advocating. Here too, however, the shadow of Piketty’s conformity with modern economics comes to the fore. To suppose that one must only be concerned with initial conditions and allow market forces to do the rest is almost a libertarian position. It assumes that once people have access to education and a basic wealth endowment, all can equally live their lives to the full. The problem is that such a position is predicated on two fundamental, questionable assumptions. First, that the mechanism of the markets does not offend widely held moral values (like, for instance, a belief about deserts or individual sovereignty8); and secondly, that what people expect from life can always be provided through market interactions. In other words, it is all predicated on the ability of markets to deliver. Naturally, the neo-classical orthodoxy embraces both assumptions, but there are good many reasons to object to it. In terms of education, this means, among other things, that good education is a means to an end and that its purpose is to prepare individuals to use the markets. Moreover, pursuing non-market-based interests may lead to serious material disadvantages that not only will enhance income inequalities but also may be unsustainable. In other words, there are other reasons to object to the market system than the way in which it affects the distribution of wealth and for which, wealth re-distribution is no remedy.9

  • 10 In this respect, Piketty is really a social-democrat.

12To some extent, in spite of the differences in proposals emanating from Piketty’s two recent books, they seem to have a common theme: How to achieve re-distribution in a world which is dominated by markets.10 As genuine competitiveness across markets (and economies) prevents individual countries from taking actions to rectify the inequalities in their midst, Piketty called for global governance in one book and for a federative arrangement in the other. But nowhere does he stop to consider whether the problem may be the markets themselves, and not just the equality of opportunity. What is the point of providing the latter if the former will always work against it?

2. Equality and History

  • 11 In Fukuyama (1992) it seemed that the globalised order of private property and markets constitutes (...)

13We now return to the first of the two themes previously mentioned, and the one which dominates the text: the history of inequality and the evolution of its defence. One would have expected to find in the book a proper and systematic reflection on the meaning of equality and the role of equality of outcomes in it, in the context of human nature and the nature of human society. Instead, we find in most of the book something more akin to an elaborate conspiracy theory. A distributive justice idea based on status facilitated and prolonged the inequalities generated by feudalism until it succumbed to the excesses of wealth inequality which subsequently gave rise to a new justification of inequalities based on the sanctity of property rights (which Piketty calls ‘ownership society’). These, in turn, when the old order collapsed, became associated with the rise of the nation-state and the excesses of empires and colonialism which in the end (the First World War) threw the world into a period of transcendental extremes in the form of national socialism and communism (both, according to Piketty, reflect an attempt at transcending the nation state and at least in one case, the ownership society). A certain awakening towards the need to resolve this turbulent historical force of inequality emerged in the post Second World War period (and as a result of the proliferation of universal suffrage which began at the end of the First World War) with the rise of social democracy, only to be thrown into disarray when the excesses of wealth inequalities in a globalised world were again protected by the sanctity of property rights. Consequently, Piketty’s vision of Participatory socialism represents a concept similar in appearance, though orthogonal in content, to Fukuyama’s End of History.11 Once wealth inequality is finally laid to rest, the world will reach a prolonged and harmonious existence. As I said before, one cannot escape the feeling that the narrative of the book suggests that here is humanity steadfastly—across space and time—genuinely aspiring equality, only to be held back by dark forces behind ideological defences of inequality.

14I cannot help comparing this book with Phelps-Brown’s book Egalitarianism and the Generation of Inequality (1988), which is an essay in defence of the Welfare State. Phelps-Brown, too, approaches the question of equality from a historical perspective; but there are two distinct differences. Firstly, he devotes half of his book to ponder the concept of equality and systematically examine how it evolved over time in human thought and in response to circumstances. Namely, unlike Piketty who wants us to believe that inequality is just a question of ideology, Phelps-Brown suggests that circumstances are relevant not only to the generation of inequality but also to the way in which it is perceived. Secondly, and not unrelated, Phelps-Brown realises that how people see equality depends on the way they conceive society and as this has certainly varied in the past but also varies nowadays across cultures, the idea of equality is far more nuanced and complex than the mere question of wealth or income inequalities. In other words, the logic does not go from the defence of inequality to the conception of society, which, in my view, is what is implied in Piketty’s book, but rather the other way around. My feeling after reading the book is that Piketty has no theory of society at all; only a theory of equality, comes rain or shine.

15At some level, Piketty’s main tenet is almost trivial. How can any form of social organisation persist if there is no general acceptance of it? Thus, inequalities persist because they are justified. However, as he claims that there is no cause for inequality other than ‘ideology’—or its justification—it means that these justifications were attempts at diverting public opinion (or perhaps better called, the Zeitgeist) from what most people then really wanted: equality. The fallacy of this line of reasoning can be seen from the outset of his historical journey.

16For some reason, for Piketty, history begins with the feudal stage. This in itself is already a peculiarity, as he does not seem to be concerned with the question of why and how feudal societies, with all their inequalities, emerged in the first place. Were these inequalities the result of ideology or circumstances? In a nutshell, Piketty makes two fundamental claims about the feudal era. First, that the purpose of society (apparently, at all times) is meaning and security. Second, that the feudal era, which he calls the ternary period, is based on a trifunctional society made up of three classes: nobility, clergy and peasants. In terms of the purpose of society, only two of them seem to be valuable in the sense that they clearly serve the purpose of society. The reference here is to the nobility as the source of security and the clergy as the providers of meaning. What sustained (if not created) this inequality is the status-based theory of distributive justice where status is a reason for special rewards. Therefore, it is not surprising that if the purpose of society is meaning and security, then the classes which supply society with these should be rewarded according to their proven social significance.

  • 12 See the literature emanating from the notion of the social brain (Dunbar, 1998).

17I must confess that as sympathetic as I am to the idea that the main purpose of society is meaning and security, I suspect that very few anthropologists or evolutionary biologists would agree that meaning and security are the main purposes of society. If anything, these purposes are more likely to be defined as security and subsistence. It is true that as human society expanded in numbers (associated with the increase in the share of neocortex in the brain),12 the role of meaning in creating cognitive based social cohesion was significant. But it was a means to an end rather than the end itself (at least from an evolutionary perspective). Therefore, if subsistence and security are the main purposes of society and as peasants are the providers for the former, would their role in society not be as significant as that of the nobility and even more significant than that of the clergy?

  • 13 One cannot really understand the feudal state in Europe without the state which preceded it and cal (...)
  • 14 Maine (1861) described this as a shift from a society based on status to a society based on contrac (...)

18Even more to the point, feudal Europe emerged as a result of two main processes. The first was the disintegration of the Western Roman Empire and the second, though closely related and even more significant, was the huge migration of Germanic and Slavic tribes13. This means that part of the processes which may explain the creation of feudal societies (and which was more dominant in the preceding Allodial stage) is due to the more general transition which all human societies experienced when they turned from the nomadic phase into a settled (on land) form of existence. The shift from a nomadic state to a settled one entails seismic changes in the way society is conceived of and functions. In the late nomadic state, broadly speaking, blood kinship or a unifying cognitive idea (like common ancestors or forms of faith) are more likely to have been the cement of society; all members were in some sense equal (by virtue of their belonging to the group), yet there were also clear hierarchies in terms of decision-making. Ownership, such as there was one, is also more likely to have been communal. However, once those people settled on land, those ties begin to unravel fast. As people settle on land, even if in early stages they may still enjoy a certain level of common ownership, there will come a stage when the numbers of people in the community increase and some people can no longer find land on which to work within the community. Consequently, they will begin to wander elsewhere. This would signal a shift in that which binds people together from the original blood kinship to a more land-based sense of community. It may also increase the sense of insecurity as a community is no longer defined by the direct association between people as it is through a third element, land, with which individuals’ association may be more precarious. This, in turn, may open the gate for the rudimentary relationships of the feudal (and allodial) world between a landlord and a vessel.14 Therefore, the causes of the inequalities which emerged in the feudal world can hardly be attributed to ideology. It is extremely difficult to imagine how ideology among people who are experiencing tremendous social changes and who could barely read or write could have triggered a world of inequalities.

19Having said this, one could still argue that over the years, an ideology can develop that would justify the existence of inequalities and in so doing, prolong their reign. But it has to be emphasised that this is very different from arguing that inequality is the result of ideology. But even here, Piketty is wrong in his analysis. For one, the philosophical justification he cites for the inequalities in the feudal world (i.e., status-based distributive justice) emanates from a very different social structure and inequality regime: the Greek polis. In itself, this would have suggested that the so-called ideology had not been developed for the purpose of supporting the feudal structure—though one could still say that it may have been imported for that purpose. But even this would not work, as status-based distributive justice is a far more complex theory than Piketty would have us believe and it is far from a justification for the kind of inequalities the feudal world generated.

  • 15 See a discussion in Renehan (1981).

20To properly understand the status-based justification for inequality, we must bear in mind that it was first formulated in a world where there was a dual belief in both the common universality of humans as well as the presence of natural differences between people. The great doyen of scholastic philosophy—whose ideas dominated medieval thinking—was St Thomas of Aquinas, and he had been closely influenced by Aristotle. For the Greeks, and not just Aristotle, humans were distinct from other things on earth because of their reason (which includes both their ability to know and their ability to morally judge).15 This meant that they were also different in their abilities to reason and judge. For the scholars of the middle ages, this was more complicated as the great unifier of humans is the fact that they have all been made in the image of God and in this sense, were all equal. What would clearly distinguish them from one another is their spiritual proximity to the divine (a variation on the Greek idea of virtue). In other words, the fact that one can identify universal attributes in humans—which would ostensibly make them equal—does not mean that one cannot perceive differences in the manifestation of these universals in people. Therefore, the concept of equality and its relationship with inequality is far more complex than suggested by Piketty.

  • 16 Where the common (equal) universal has particular (hence, different or unequal) expression.

21Indeed, while Plato shared this view of humans16, he thought that the differences between them meant that they served different functions in society which, itself, is natural to them. But the fact that they do serve a different function does not mean that they are not equal in their social significance. In fact, Plato demanded that those who command power should have no property at all so as not to corrupt their virtues. Namely, if the Guardians are the top of the hierarchy (like, say, the nobility and the clergy in the feudal system), the Platonic view would be that (a) they should be people of virtue; and (b) that they should have no property at all. The reason why all this matters, is because Plato was not unknown during the scholastic era even though his views were not necessarily widely shared. In other words, there were serious counter-arguments to the concentration of wealth in the hands of nobility and clergy.

  • 17 See his Nicomachean Ethics (Book V) 1131a22-1131b14 and St Thomas’s Summa Theologiae (387).

22But more to the point would be to look at Aristotle and St Thomas who both espoused a theory of status-based distributive justice. Aristotle does not tell us exactly wherefrom could come the merit that would give someone greater status. He claims—and it is repeated by St Thomas almost verbatim—that in democracies this would be free birth; in oligarchy, it would be wealth; and in aristocracy, excellence.17 This was not to say that wealth-based merits were the ones he considered most appropriate. But it is also important to note that wealth in oligarchy is the cause of status rather than the reward for it. Nobility and clergy had a status because they had wealth, but it is not that they deserved the wealth because of their status. And even if they deserved power (or to hold public office) because of their wealth, whether or not this is conducive to greater inequality depends on the role of the state.

23It is important to bear in mind that the idea of distributive justice in Aristotle is only part of his theory of justice. There is also that which he calls corrective justice. The difference between them is that distributive justice is based on what people are—and this would correspond to the idea of status-based justice—but corrective justice depends on what they do. Therefore, it is difficult to see how someone who adhered to a principle of proportional rewards—which is at the heart of this conception of justice—would accept that the actions of the peasants who provide most of the subsistence of society would command so little reward. Social status may matter but it is not the only determinant of the just distribution.

  • 18 St Thomas’s Summa Theologiae (389).

24St Thomas, on the other hand, distinguishes between the distribution of common goods (like honours, office, etc) and private goods. While social status matters more for the distribution of common goods, it is only part of the considerations when we come to discuss private goods (which would include wealth). One way of better understanding St Thomas’s claim is through what he calls injustice. He describes a case which violates what he calls distributive justice and where the cause of status is the fact that someone is a teacher.18 Namely, the notion of status in his mind was certainly not associated with wealth and the status he wished to reward was not necessarily associated with power but rather with some measure of social significance that is broader than meaning and security.

  • 19 Murphy (1932, 103).
  • 20 He even invoked the Old Testament ideas of moratoria every seven years which would have been an occ (...)

25Nevertheless, no matter how willing any of these scholars were to accept that there are natural differences between individuals, none of them seems to have supported inequalities in a way that can possibly justify the claim that they have created an ideology in defence of inequality that would have helped prolonged the feudal regime. We can see this quite dramatically by examining St Thomas’s commentary on Aristotle. In Book IV of his commentary (on Politics), St Thomas clearly declares that the most virtuous (and thus deserving) group in society is the middle class. Neither the rich nor the poor serve society well; they serve their own interests. St Thomas is quite clear in his writings that in the ideal society, there will be greater equality. There will always be differences between individuals, but these will only be reflected in moderate inequalities in outcomes. St Thomas, like Aristotle, saw virtue in moderation—“if a man has more than he should, he is not what he ought to be”19—which led him to the conclusion that the role of the state is to ensure through regulations that wealth should not be concentrated in the hands of a few.20 Given the importance of St Thomas in scholastic thought, how can one possibly argue that the Zeitgeist of the time—the basis of all ideologies—conspired to sustain the inequalities generated by feudalism.

26It is, of course, quite true that the Church, as an institution and not through its power of persuasion, was complicit in prolonging the feudal period, but this was entirely the result of politics, not ideology. It was a result of corruption and circumstances but not, as Piketty claims, of the spirit of the time. The brief episode of Savonarola in Florence towards the end of the 15th century is a case in point. Thus, feudalism was not created through any kind of conspiratorial philosophy or ideology. Instead, it was the result of circumstances: the collapse of Rome and the transition of the migrating tribes from nomadic states into settled ones. All the while, the philosophical views which dominated the era, though acknowledging differences between individuals (while maintaining an equally shared universality), never really promoted the idea that those who serve the presumed purpose of society (meaning and security) deserve greater wealth. Nor did any of these thoughts condone excesses in wealth distribution. Even if wealth would have given nobility and clergy the status that would command the common goods of public offices, the role of the state would be to tame these inequalities, not to uphold them. I see nothing in all this which supports, even in the slightest, Piketty’s main claim.

  • 21 While this also brought about a rise in what later on became the nation-state, I hasten to say that (...)

27Things are not getting better when we move into the phase of what Piketty calls Ownership Society. Again, it was not ideology or even the excesses of inequalities that brought about the change in what Piketty calls inequality regimes: rather, it was circumstances and technology. The rise in urbanisation and with it, the rise of commerce and the middle classes as well as the introduction of print which allowed knowledge to spread and diminish the dependency on interpretive authority, were all powerful enough developments to explain the demise and disintegration of the feudal system and the status-based society.21 It is, of course, true that the changes would also affect the way people perceived society and the relationship which individuals had with one another and with the system; but causal explanations here are far from obvious.

28There are two characteristics of the Enlightenment which are relevant to our story here. First is the shift from an exogenous explanation of society (divine) to an endogenous one where the individual—the most distinct particle—becomes the focus of social analysis. Second is the resulting change in the purpose of society. If before the Enlightenment, from the Greeks to Scholasticism, the purpose of society was to facilitate the good life in the moral sense of the word, it is now about serving the interests of the individuals. One can easily imagine how a hierarchical structure (and an aligned level of inequality) could be required for the former, while liberty (with its logical association with property rights) may be derived from the latter. Neither of these approaches necessarily suggests a support for significant inequality.

29For Piketty’s argument to work, Enlightenment must lead to what he calls a sacralisation of property rights and therefore, an almost blind support for all inequalities that might be derived from it. So strong must this support be, that only the excesses of empire and colonialism can lead the system into its own demise, through cataclysmic events like the First World War. Worse still, in spite of a spat of social democracy which followed the Second World War, the power of this sacralisation is still felt today in the defence of the excesses derived from the globalised economy. In other words, Enlightenment may have promised liberty and emancipation to individuals; but as it did not support equality, it generated the ideological justification for all the excesses which rocked the world in the last two hundred years.

  • 22 Rousseau (1959), 222-223.

30It is difficult to take such a line of reasoning seriously. Most scholars whose writings can be associated with the Enlightenment were deeply concerned with questions of justice and an individual-based moral theory is unlikely to provide justification for excessive inequality. The fact that the purpose of society may no longer be the good life does not mean that moral values have lost their social significance. Piketty cites Israel (2016) who claims that equality was not part of the main tenets of mainstream Enlightenment, as much it was for the Radical branch emanating from Spinoza. Scholars like Locke—the more familiar face of the Enlightenment—sanctioned property rights in the state of nature (and thus, as a natural right), consequently making inequality an integral part of modern society. For the radical thinkers, on the other hand, equality “thus becomes an inalienable ‘natural right’” (561). However, the equality in question is predominantly equality before the law, “equality in free expression of opinion and the right to publish” (ibid). It is not equality of outcomes and it is a view that would be shared by most ‘mainstream’ Enlightenment scholars. But even Spinoza who clearly upholds equal rights, accepts that there are aspects in humans where there is inequality. In particular, he cites the difference in attitude toward labour. Consequently, equality is not the goal of politics. Instead, the best state of society is defined in terms of conditions for freedom and reason (see Hoffheimer, 1985). Moreover, those who expressed explicit support for equality of outcome, like Diderot—the French Encyclopaedist whom Israel associates with the radical wing—seem to hold contradictory views. As Lipton (1944) demonstrated, Diderot also “expresses … his enthusiastic interest in technology, commerce and manufacture; his insistence on the sanctity of private property; his demands for freedom of trade, unrestricted private enterprise, and the institution of a scheme of representative government which would enable property-holders to control the state” (126). Even Rousseau, who claimed that property rights trigger inequality, imagined that civil society would receive services from its members proportionate to their talent and strength and will honour them proportionately to their services.22 None of these is remotely associated with equality of outcomes as the most important social concern. This may suggest some confusion, rather than a well-established doctrine.

31Therefore, Piketty is right to note that equality of outcome was not part of the new thinking associated with what he calls the Ownership Society. However, he is wrong to think that this meant a licence for rampant inequality. Perhaps the first principle which came out from the Enlightenment is that of liberty. This certainly sits well with the idea of equality before the law and equality of opportunity. However, this does not sit well with equality of outcomes. To achieve the latter, infringement of liberty is almost inevitable. But this did not mean that most scholars did not consider the need to balance the principles of liberty and equity.

32If we look at the writings of liberal economists of the classical era who captured both the spirit of the Enlightenment with an understanding of the working of natural liberty, we will find that most of them were deeply concerned with the distribution which emanates from a state of total liberty. Adam Smith famously observed that ‘nature’ (the state of liberty) would always favour the industrious knave while human consciousness would prefer the indolent wise person. He also writes in his Theory of Moral Sentiments that: "man is by Nature directed to correct, in some measure, the distribution of things which [nature] herself would otherwise have made" (Smith, [1759] 1976, 168]. Namely, human cognition and reason will always find the distribution of outcomes which would emerge from total liberty morally repugnant and therefore, would want to correct it. How can this be interpreted as a rejection of principles of equity? Such a position may not suggest equality, but it certainly would not tolerate excess inequalities. More to the point. Smith’s theory of property right is far from any idea of sacralisation. In fact, Smith’s analysis suggests that the right to property must always be conditioned and measured against the rights of the property-less.

33Adam Smith is not a marginal Enlightenment scholar and if one cannot find a defence for Piketty’s claim in his writings, there is probably not much truth in the claim. Even if we go further in time and deeper into liberal traditions, we will find that even John Stuart Mill did not condone excess inequalities, nor did he sanction private property. “If”, writes Mill, “the choice were to be made between Communism with all its chances, and the present state of society with all its suffering and injustices; if the institution of private property necessarily carried with it as a consequence, that the produce of labour should be apportioned as we now see it, almost in an inverse ratio to the labour—the largest portion to those who have never worked at all, the next largest to whose work is nominal, and so in a descending scale…; if this or Communism were the alternative, all the difficulties, great or small, of Communism would be as dust in the balance.” (Mill, [1848] 1909, 208). How does this contribute to the sacralisation of property rights?

34Even Leon Walras whose idea of general equilibrium can be seen as an attempt at showing how total liberty can work to the benefit of all participants, cannot be seen as someone who would have contributed to the sanctioning of property rights. After all, if one reads the complete set of his writings one would discover that he was also in favour of public ownership of land not only because of a communal claim towards ownership, but also as a means to help subject economic outcomes to social and moral values. A similar idea was popular in the US with Henry George’s movement. In short, there is absolutely no base to Piketty’s claim that the Zeitgeist of the Enlightenment and the subsequent eras has given licence to the sacralisation of private property.

35In fact, what Piketty completely overlooks is another thread in human thought which has been continuous from the Greeks to the Enlightenment. If we look at the writings of scholars like Plato, Aristotle, St Augustin, Thomas Moore and even John Stuart Mill, we would discover that for all of them the idea of some form of equality is associated with the idea of a life which is not focused on material wellbeing. When the good life is not measured in wealth, then equality in wealth is not only a likely but a necessary pillar of social arrangements. Mill, for instance, who considered liberty as a function of human development and the latter as a function of education, claims that when they develop, individuals will become more co-operative in nature. This, in turn, would lead to a world of cooperatives, cooperation and material stagnation due to the fact that people would wish to spend less time producing material goods and instead, immersing themselves in more of what Aristotle called, the good life (Eudaimonia).

36On a final note it would be interesting to invoke Smith again when considering Piketty’s belief that abolishing borders and the re-distribution of wealth will lead to a utopia of equality. Smith observed that people are natural social beings who constantly seek social approbation. Normally, such approbation is obtained through a process of sympathy (empathy, in today’s terminology) where individuals learn what it is that generates the approval of the others. This approval, or harmony of sentiments—which is also the origin of moral values—, suggests that behaving in a morally approved manner will command the approbation one aspires. However, Smith also notes the difficulties that arise when trying to feel empathy with people who are socially more distant from one another. This opens the way for what he calls the deception by nature and where individuals will conflate a sense of pleasure they derive from feeling empathy with the rich, and the pleasure they expect from the harmony of sentiments (the true moral approbation). Consequently, they begin to believe that the more wealth they accumulate, the more approbation they will find. This, in turn, leads to an ever-increasing pursuit of riches which requires increasing levels of division of labour (extreme specialisation) and a greater dependency on an increasing number of people with whom the social distance is becoming even greater. Extreme division of labour coupled with competitive interactions which is more likely to dominate human relations when individuals are socially distant from one another, is, perhaps, the key to the generation of plenty. This is what economic orthodoxy tells us and this is something which Piketty implicitly accepts. But it takes an 18th century visionary scholar to see that, which those who consider themselves radical thinkers today, fail to see. When social distance becomes so great, the only way open to individuals to achieve social (moral) approbation is through the accumulation of wealth. Hence, the competition for wealth—which will ensure the persistence of inequality—becomes the essence of social (and moral) life. In other words, turning the concept of community into a notion of bricks and roads—which would result from Piketty’s plan to abolish localism and encourage federalism—will help increase social distance and make wealth the most important social currency. Consequently, any attempt at correcting the distribution of wealth while relying on markets is bound to exacerbate rather than resolve Piketty’s justified frustration with the current direction of the world’s economy.

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1 Though Chapter 14 in the book is devoted to borders, property and equality, I cannot consider this as a serious attempt at dealing with this extremely demanding question. Instead, we get a peculiar and irrelevant discussion of voting habits according to class (property) and education.

2 To be fair, Piketty is a bit vague on this and calls for more thinking, but he does think that the world should become more federative and that free mobility of persons—which effectively means the abolition of borders—is necessary.

3 Here again I hasten to qualify that Piketty does talk about social ownership as a long-term objective. But what he really means by this is more a broadly shared ownership, rather than a concentrated one. In this respect, what he calls social ownership is not an abolition of property rights, but a greater diffusion of them.

4 In fact, increasing the number of participants reduces the core of efficient outcome and therefore, reduces the scope of initial endowments (i.e. distribution of wealth) which are commensurate with the socially desirable allocation.

5 Indeed, from the end of the Second World War onwards a great deal of effort has gone into the proliferation of competitive institutions. At first, this took the shape of free trade (e.g., the GATT), which is an application of competitive rules between economies, to achieve both prosperity and factor price equalisation. The collapse of Bretton-Woods in the early 1970s precipitated the shift to an attempt at achieving both goals through capital mobility and, ideally, labour mobility as well. In other words, current globalisation is an attempt at internalising the economic problem which different economies face.

6 I explain elsewhere why Keynes falls into this category (Witztum, 2013).

7 See, for instance, Arvind Subramanian’s review in Foreign Affairs, July/August 2020.

8 By desert I am referring to the principle of proportional remuneration. This is a principle according to which, other things being equal, people should be rewarded according to what they do (rather than who they are). The subject has been around as a principle of justice since the days of Aristotle (the meaning of the Greek word for justice is indeed ‘due share’) and even before that. More recently, in various attempts at gauging public opinion this principle re-emerged as a dominant idea of what people consider to be economic justice. There are, of course, detractors but such views are usually based on the presumption that ‘other things are not equal’. Notwithstanding, one would expect from a system that does not offend morality to at least uphold due shares when other things are equal. There is also a wide spread belief about the association of markets with liberty but this, of course, is overlooking the distinction that exists between freedom and sovereignty. Markets do not sit well with the idea of sovereignty. There are more details in chapter 4 of my book The Betrayal of Liberal Economics (Witztum, 2019) where I also demonstrate how markets inherently violate these principles.

9 Again, see a discussion in Witztum (2019, chapters 2-4).

10 In this respect, Piketty is really a social-democrat.

11 In Fukuyama (1992) it seemed that the globalised order of private property and markets constitutes the final stage while in Piketty, the word ‘socialism’ implies that his vision of the world in orthogonal to Fukuyama. But this is just an appearance as we already said that Piketty’s participatory socialism is just a corrected version of Fukuyama’s end of history. Naturally, I do not see any merit in any claim about the ‘end of history’, but I will not say more about this here.

12 See the literature emanating from the notion of the social brain (Dunbar, 1998).

13 One cannot really understand the feudal state in Europe without the state which preceded it and called Allodial state. Most of what I say here is relevant to the Allodial state—mainly triggered in Europe by the migration of the Germanic and Slavic tribes—rather than the more advanced form of feudalism which typified Europe in the late medieval period.

14 Maine (1861) described this as a shift from a society based on status to a society based on contracts. The former required a greater sense of association than the latter. Indeed, feudal relationships were more of a contractual nature than they were driven by status. One exchanged freedom for security. Maine also drew attention to the fact that around the 13th century, the kings of England and France ceased being the kings of English or the French and started being the kings of EngLand and France.

15 See a discussion in Renehan (1981).

16 Where the common (equal) universal has particular (hence, different or unequal) expression.

17 See his Nicomachean Ethics (Book V) 1131a22-1131b14 and St Thomas’s Summa Theologiae (387).

18 St Thomas’s Summa Theologiae (389).

19 Murphy (1932, 103).

20 He even invoked the Old Testament ideas of moratoria every seven years which would have been an occasion of re-distribution and the prevention against the accumulation of wealth in the hands of a few.

21 While this also brought about a rise in what later on became the nation-state, I hasten to say that here too, Piketty makes strange claims (probably following Arendt) that Europe between 1815 and the First World War was Europe of the nation-state. This is not very convincing once one moves out of France, since 1815 is the year of the Vienna Conference which had aimed at rolling back the few influences which the French revolution had transported through the Napoleonic wars. In fact, in spite of the Spring of Nations in 1848, most of Europe remained in the grip of feudal systems well into the beginning of the 20th century.

22 Rousseau (1959), 222-223.

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Amos Witztum, « History Starts Now: Reflections on Piketty’s Inequality »Œconomia, 11-1 | 2021, 143-160.

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Amos Witztum, « History Starts Now: Reflections on Piketty’s Inequality »Œconomia [En ligne], 11-1 | 2021, mis en ligne le 01 mars 2021, consulté le 24 juillet 2021. URL : ; DOI :

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Amos Witztum

CPNSS, London School of Economics.

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