Navigation – Plan du site

AccueilNuméros11-1Symposium: "Capital and Ideology"From ‘Capital and Ideology’ to ‘D...

Symposium: "Capital and Ideology"

From ‘Capital and Ideology’ to ‘Democracy and Evidence’: A Review of Thomas Piketty

Ewan McGaughey
p. 171-189
Référence(s) :

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

Texte intégral

1. The Main Argument

  • 1 Piketty uses “‘ideology’ in a positive and constructive sense to refer to a set of a priori plausib (...)
  • 2 One might add, pretending we are postideological, or neutral, may also be ideological.
  • 3 See chs 4-5, especially at 199; ch. 10, 434 referring to the end of laissez-faire.
  • 4 See also Hamilton and Deakin (2015, 288-293) on Pashukanis’ early Soviet legal theory.
  • 5 But there is also another dimension to the EU, according to the Court of Justice in Defrenne v Sabe (...)
  • 6 See also Balzer (2005) explaining Putin’s thesis, defended in 1997, was that Russian natural resour (...)
  • 7 By being dramatically overrepresented in the Standing Committee.

1In Capital and Ideology, Thomas Piketty’s positive argument is that societies use ideology to justify (otherwise unjustified) inequality. In an ongoing cycle, inequality then feeds ideology. Ideology (which is not always based on reason and evidence) tends to be a “range of contradictory discourses”. These discourses create a “dominant narrative”. The narrative leads to rules. The rules bolster inequality (1). And inequality generates more ideology (3-4).1 “We live in an era”, writes Piketty, “that wants to see itself as postideological but is in reality saturated by ideology.” (ch. 16, 961)2 Nineteenth century ideology ‘sacralized’ private property, promising ‘social stability’ and ‘individual emancipation’ if the state was laissez-faire.3 The Soviet Union had an ideology of state ownership under a dictatorship “of” the proletariat that revolutionised a corrupt old order (ch. 12, 579).4 The European Union has, says Piketty, told a tale that “free competition and free circulation of goods and capital” (550) is enough for “prosperity and social harmony” (645).5 Post-Soviet Russia in general, and Putin in particular, follows an ideology that seeks to “restore Russia’s greatness” based on “hierarchy and verticality in both politics and economics”, mocking “Gorbachev’s egalitarian illusions and his obsession with saving socialism”, before Yeltsin and then oligarchs took charge (ch. 12, 604).6 China’s official ideology is “socialism with Chinese characteristics”, and these ‘characteristics’ happily include dictators and billionaires controlling its so called National “People’s” Congress (ch. 12, 624 and 634).7 Euro-American capitalism, or the ‘neo-proprietarian’ ideology epitomised by Thatcher or Reagan, and leading to far-right identitarian or nativist politics, espoused a return to laissez-faire (ch. 11, 533-534, ch. 13, 705-709 and ch. 15, 855).

2By contrast, social democracy in the 20th century broke away from the monolith of 19th century private property, and attempted to build institutions for public property, social property, or “temporary” property, circulating wealth by tax (ch. 11, 494). But, says Piketty, social democratic parties have not yet answered the problems of creating fair ownership, universal education, fair tax, and a just society beyond the nation-state (ch. 11, 486 and ch. 12, 578). A “just society”, says Piketty, is one where “all members” of society have “access” to “fundamental goods”, like “education, health, the right to vote”, and can participate in “social, cultural, economic, civil and political life”. The “least advantaged” should be able to “enjoy the highest possible life conditions”. That may allow some inequality, but not the extremes we see now (ch. 17, 697-698).

  • 8 See also Hickel (2017, ch. 1, 24-32), pointing out, “the aid budget is diminutive, almost ridiculou (...)
  • 9 Cf. Paul Krugman (NY Times, 8 March 2020), “I’m not even sure what the book’s message is.” Krugman’ (...)

3Piketty’s normative argument is for ‘participatory socialism’, and he writes this should mean three main things. First, we need to extend democracy in the economy, with worker votes for company boards “in its maximal version”, for example “with half the board seats in all private firms, large or small, given to workers”, and also create “true social ownership of capital” (ch. 17, 972-973). There should be an overhaul of the “labor code and, more generally, the entire legal system” to achieve “a just wage” and “a more equal distribution of economic power” (ch. 17, 1003). Second, we must have a “system of progressive taxation of wealth” based on “ability to pay” (ch. 17, 996, fn. 68). As well as income tax, inheritance tax, and a progressive tax on carbon emissions, a new wealth tax should pay for “a universal capital endowment, and an ambitious social state”. This includes, among other things, universal education to enable truly equal opportunity (ch. 17, 1000-1016). Third, we should enhance fiscal cooperation within the EU and beyond, and ensure the terms of trade are more balanced, including an increase of developmental assistance to at least 1% of GDP (ch. 17, 1022-1024).8 The ‘message’ of this book is crystal clear: we need a better ideology.9 That is an ideal of justice, founded on democracy and evidence.

2. Ideology and Evidence

  • 10 See also Ariely (2011, ch. 10) on prior decisions affecting later decisions.
  • 11 Cf. Raghuram Rajan (Financial Times, 25 February 2020), who resorts to a career-long monologue rath (...)
  • 12 E.g. Pickett and Wilkinson (2009) and see the authors’ blog summary: “You’re more likely to achieve (...)
  • 13 E.g. Winston Churchill, “Speech to the Conservative Party Conference” (5 October 1946) “We oppose t (...)
  • 14 Cf. Pettitt v Pettitt (1970) AC 777, 829, Lord Diplock.
  • 15 E.g. Constine (2017). Also contrast with reality Google’s slogan, ‘Don’t be evil’. Amazon’s slogan (...)
  • 16 Snyder (2018a) and see further Snyder (2018b).
  • 17 ‘A Genocide incited on Facebook, with posts from Myanmar’s military’ (New York Times, 6 November 20 (...)
  • 18 See the countless videos on Youtube, such as Saddam Hussein’s execution, Colonel Gaddafi’s pre-deat (...)

4Capital and Ideology is an encyclopaedic, data-driven, and intensely rewarding work, spanning the world’s modern history and contemporary politics. It requires some thinking, slow, not fast. Fast thinking, I suspect, is one of the main creatures on which ideology preys. This is because as behavioural economist Daniel Kahneman (2011) put it, our minds tend to have two systems of thought. ‘System 1’ is our snap judgement faculty, where we deploy a rule of thumb for common situations, to give quick answers, often based on prior experience or choices.10 ‘System 2’ is our more slow, deliberative thinking, as we should use if we engage in a seminar, read a book, or write a review.11 The stories we tell ourselves as a society often set the default in our thinking, and ideology is deliberately designed to paper over the chasms. We may think we live in ‘the land of opportunity’, when our opportunities are among the worst in the developed world.12 We may say we have a ‘property-owning democracy’,13 when most ‘owners’ are mortgaged to the hilt to a bank.14 Big tech and internet media claim they ‘bring the world closer together’,15 when higher internet penetration under Facebook, Google, Twitter, Tencent or VK has directly led to more fascism,16 genocide,17 televised executions and torture,18 and an astonishing descent into hateful public discourse.

5The way we defeat ideology—from the Soviet Stalinists to Silicon billionaires—is we patiently explain how reality works, provide evidence and data, and propose alternatives. Then we create political movements to achieve the goals. Plans are important. Details matter. Yet the most effective coalitions are built on principles that accommodate a plurality of views, telling a story grounded in people’s experience. Even if readers of Capital and Ideology differ on certain points, or find some chapters more appealing than others, Piketty’s book contains so much revealing data, is so vast in scope, that it counts as a major contribution to the effort of constructing a better human civilization.

3. Capital and Democracy

6In this review I would like to focus on three main points, which I believe could be useful to complement, critique and emphasise the main argument of the book. These are that:

  1. the inequality of economic power is even more extreme than inequality of wealth and income;

  2. the legal construction of markets can go very far to pre-empt unjustified inequality, before redistributive taxation;

  3. social justice, based on universal human rights, is a creative and unparalleled force, and this must replace the ideologies persistent in economics and law.

3.1 The True Concentration of Economic Power

  • 19 ‘Pericles Funeral Oration’ in History of the Peloponnesian War (Thucydides, [c. 400 B.C.E.] 1998).
  • 20 R (Animal Defenders International) v Secretary of State for Culture Media and Sport [2008] UKHL 15, (...)

7The first point is that Piketty rightly emphasises the astonishing levels of concentration of income and wealth. But if we measure it, inequality of economic power, mainly through voting in the economy, is even more extreme. How power in politics works is familiar. In a democracy it starts with “one person, one vote”, “administration is in the hands of the many, not the few”,19 we have standards for equal expression of voice and election spending,20 and we aim for a media that encourages deliberative discourse through public reason.

  • 21 E.g. UK Corporate Governance Code 2019 prov 17, Companies (Model Articles) Regulations 2008, para 2 (...)
  • 22 Companies Act 2006 s 168 (50%). Aktiengesetz 1965 §103 (75%). Code de commerce, art L.225-61 (50%). (...)
  • 23 Institutional Shareholder Services, Shearman & Sterling and European Corporate Governance Institute (...)
  • 24 See Danny Crichton, ‘Congress should demand Zuckerberg move to ‘one share, one vote’ (9 April 2018) (...)
  • 25 For background, McGaughey (2014), Participation in Corporate Governance (LSE PhD 2014, ch. 5, 3).

8By contrast, power in the economy is less familiar than it should be. Major enterprises, mostly organised in corporate form, are the centres. Corporate directors set our wages, fund retirement, pay dividends, set investment levels, choose their tax strategy, allocate resources, and affect our environment. Boards of directors, under multiple corporate laws, mainly appoint and pay themselves.21 In most legal systems, there are also rights for company members to vote and remove directors by a majority.22 But most members’ votes are monopolised by shareholders, except to the extent that workers also have a voice. It is true that the principle of ‘one share, one vote’ prevails in Europe, typically in law.23 But in the last two decades, particularly in corporations like Google, Facebook, Uber, Snap, or Alibaba, founding directors have been allowed to issue masses of multiple-voting shares to themselves, or even non-voting shares to others.24 ‘One share, one vote’ was protected by law in the US since the Great Depression, but has now been emptied (714 and 971).25 Despite taking money at public offerings, these founders are accountable to no investor, no worker, and no stakeholder but themselves.

  • 26 See Deutsche Bundesbank, Statistische Sonderveröffentlichung 9 (2005) 32 and (1998) 32.
  • 27 Also, Brandeis (1914).

9Even when shares do come with equal votes, those votes are monopolised by asset managers (in countries with flat state pensions like the UK and US), or banks (in countries with income-linked state pensions, like France and Germany). The money mostly belongs to people saving for retirement. Savers in pension, life insurance and mutual funds (e.g. a 401(k)) tend to delegate funds to asset managers and banks. These firms choose what shares, bonds, or securities to buy, and also provide the ‘service’ of voting on shares. But we do not yet have clear rules to make them follow voting policies that the real investors want. Let us take just two examples. First, in the US there are three big asset managers: BlackRock, State Street and Vanguard. If they were combined, the big-3 would be the largest shareholder in 438 out of the Standard & Poors 500 listing of largest companies (Posner, Morton and Weyl, 2017). There are around 50 people in the corporate governance departments of these firms almost single-handedly controlling all these votes (Krouse et al., 2016) following the preferences of an even smaller group of directors of the asset manager firms. Second, in Germany, there are three big banks: Deutsche Bank, Commerzbank, and UniCredit (which controls HypoVereinsbank). There are 31 directors of these three banks, and in practice a smaller number who set voting priorities. Until statistics were discontinued in 2005, we know German banks controlled over 60% of all votes cast on shares in German public companies.26 Now we are blindfolded when it comes to voting power data, and this resembles the problems of opacity Piketty highlights for wealth data (ch. 13, 648). But you do not need up to date statistics to know that as Adam Smith put it, these are other people’s votes, bought with “other people’s money” (Smith, [1776], Book V, ch. 1, §107).27 The main goal of banks and asset managers is to extract more fees, and within the loose constraints of benchmarking take more from other people’s retirement. By dealing with this issue, we could raise every senior citizen’s income, and increase social security.

  • 28 See especially Ferreras (2017) favouring full veto rights.
  • 29 In the US, the Reward Work Act (S.2605) introduced by Senator Tammy Baldwin, the Accountable Capita (...)
  • 30 Eillie Anzelotti, ‘Want Fairer Workplaces? Give Employees Seats On The Board’ (Fast Company, 6 Apri (...)
  • 31 European Social Charter 1996 art 22. This is a social rights document of the Council of Europe.
  • 32 Universal Declaration of Human Rights 1948 art 21. International Covenant on Civil and Political Ri (...)

10Piketty rightly focuses on the need to increase worker participation in corporate governance, a right that came originally from collective bargaining, and was then codified into law (McGaughey, 2016). This could mean, as Piketty says, increasing the proportion of worker-directors on company boards, guaranteeing workers votes in company meetings as members (alongside shareholders) (ch. 11, 510), increasing the powers of elected work councils to make management decisions,28 and probably all three. Some form of law guaranteeing workers rights to vote for boards is now the majority practice in the EU and OECD countries, and even those behind like the UK, US, or Belgium, now have seen major political proposals to achieve this fundamental right.29 In the US, there are now expressions of support from Barack Obama and Kamala Harris. Any Democratic state (like any EU member state) could begin legislating, even without the federal government (McGaughey, 2019, 749-751). A huge majority of American public opinion supports more workplace democracy: in one poll at least 53% of voters positively support it, including 75% of Democratic voters, and 43% of Republican voters, with very few opposed.30 In Europe, this is way overdue, because “the right of workers to take part in the determination and improvement of the working conditions” is enshrined in the European Social Charter 1996.31 It is arguably part of the universal right “to take part in the government’ and to ‘take part in the conduct of public affairs”.32 This is part of the 21st century suffrage movement, for democracy in our economy just as in politics, and to realise 21st century human rights.

  • 33 Cf. Abraham Lincoln, First Annual Message (1861) “Labor is prior to and independent of capital. Cap (...)
  • 34 Note, in turn, larger occupational pension funds lead to larger stock markets, and then more divers (...)
  • 35 David Webber, ‘The Real Reason the Investor Class Hates Pensions’ (NY Times, 5 March 2018), and see (...)
  • 36 Centralverband des deutschen Bank- und Bankiergewerbes (1930) BankA 1930-31, 116, Beschluß “daß die (...)
  • 37 Aktiengesetz 1937 §114, now found in Aktiengesetz 1965 §135(2).
  • 38 Zahn (1934, 93) ‘Die Demokratie des Kapitals wird ebenso verschwinden wie die politische.’ See the (...)

11But even a ‘maximal version’ of workplace democracy is not enough (973), because capital also belongs to workers.33 As Piketty writes, if workers had voice through their capital, particularly organised by “some collective entity such as a pension fund, new dynamics might emerge.” (ch. 11, 510) In the UK and US, occupational pension funds have been larger, because the state pension is smaller.34 Trade unions had long bargained for votes and joint control for who was on pension trustee boards. But as pension funds neared their peak in the 1980s, after writers spoke of Pension Fund Socialism (Drucker, 1976), a concerted attack was made on their power, including the ‘smashing and scattering’ of collective defined benefit funds into 401(k) plans or so called ‘contract’ pensions.35 Smaller funds delegated investment services to professional asset managers, who charged fees and took over voting. Meanwhile, banks in continental Europe acquired voting control over shares that were deposited with them by law, laws which in Germany date from a bank cartel agreement in 1930,36 codified by the Nazi Companies Act 1937. This was not reversed after World War Two.37 And make no mistake: after the Nazis destroyed democracy, murdered the unions and nationalised the labour force, they wanted to rewrite corporate law to make the power of banks and boardrooms unchallengeable, so that “democracy in capital will vanish just as it did in politics.”38

  • 39 E.g. Hirst (2018, 224-227) showing tables of resolutions and the voting record of support on politi (...)
  • 40 AMNT, Red Line Voting (2016). The AMNT is an organisation of elected and union pension trustees.

12Today’s problem is that asset managers and banks on Wall Street, in the City of London, Frankfurt, La Défense or Milan, have preferences that conflict with the true investors in capital (in pension, life insurance or mutual funds).39 They routinely support escalating executive pay, when the true investors want fair pay. They do nothing about the gender pay gap, when the true investors want equality between men and women. They have continued to finance coal, oil and gas while the planet burns, and because they are still invested in fossil fuels they fail to vote to switch auto-makers or shippers to 100% clean energy. But whenever the true investors speak, when they elect representatives, they show they want real environmental, social and governance change. An example is the UK Association of Member Nominated Trustees (organised by representatives of the true investors) and its ‘red-line voting’ policy to instruct asset managers. Its policies on shareholder voting include setting maximum pay-ratios between CEOs and average pay for workers, requiring companies to explain a strategy for decarbonisation, and achieving gender and racial board diversity.40

  • 41 See the Regulation Against Excessive Pay at Listed Companies 2013, in German, French and Italian. T (...)
  • 42 Dodd-Frank Act of 2010 §957.
  • 43 Pensions Act 2004 ss 241-243.
  • 44 The two major expressions are ‘Inclusive Ownership Funds’ in the Labour Party Manifesto (2019, 60), (...)
  • 45 McGaughey (2018, 76).
  • 46 Ewan McGaughey, ‘A Draft Economic Democracy Directive for the European Union’ (2020). I am very gra (...)

13Good models to achieve democracy of capital are particularly found in Switzerland, the US and UK. First, in 2013, Switzerland banned banks voting on shares unless they are following instructions from pension funds,41 a norm readily translatable to German, French or Italian law. In the US, the Dodd-Frank Act of 2010 §957 banned voting by broker-dealers on ‘significant’ issues unless following instructions,42 a norm extendable to all unelected asset managers or banks. Second, there must be elected representation in all funds. The UK Pensions Act 2004 section 241 requires at least one-third elected or union-nominated pension trustees, and under section 243 this can be extended to one-half by the Minister.43 Both the Bernie Sanders Corporate Accountability and Democracy plan, and the UK Manifesto for Labour Law project, would ensure every pension or capital fund has representatives elected by the real investors, and they control voting policy. Further, there are proposals for Sovereign Wealth Funds for workers, like 21st century Meidner plans, where the funds are transferred profits from large companies, and elected representatives would exercise votes on shares.44 Profit-sharing is an old idea, proposed many times by conservatives, liberals and socialists alike, but never yet put into practice.45 As well as democracy in existing pensions and capital funds, new, inclusive, democratic ownership funds would give countries more autonomy from financial markets and freedom from debt. An unofficial draft EU Economic Democracy Directive shows how all these principles can be implemented for an EU-wide system of economic democracy, based on votes at work, votes in capital, and finally votes in public services.46

  • 47 Telegraph Act 1868 s 4 and Attorney General v Edison Telephone Co of London Ltd (1880–81) LR 6 QBD (...)

14Democratising ‘public property’ is the third pillar of a reformed economy. Placing enterprises in public ownership is better than private monopolies, or oligopolies, when you have a representative government. Conservatives and liberals understood this even in 19th century Britain when telegraph and telephone lines were nationalised.47 Yet the 20th century nationalisations often followed the ‘Morrisonian model’, named after Herbert Morrison, the Labour Minister for Transport and leader of the Greater London Council, who first made London buses public from 1933. In his view, workers and consumers might be consulted, but they should have no votes because ‘experts’ had to be appointed to public boards (Morrison, 1933, ch. XI, 197). And who appointed those experts? It turned out to be ministers, coincidentally, like Herbert Morrison. This led to one of the major problems in nationalised industry: a feeling of distance and lack of responsiveness between state-owned enterprise and the public. Unbeloved, without public voice, this is why Thatcher could so easily sell the family silver, and squander national wealth, in reckless privatisation sprees (Florio, 2004).

  • 48 Robson (1950) and see for example the Law of 17 May 1946, art 21, on the governing board of the Cha (...)
  • 49 E.g. Allnutt v Inglis (1810) 12 East 527, 537, per Lord Ellenborough, “the general principle” is th (...)
  • 50 However, one proposal for this was Nader, Green and Seligman (1976, 125).

15An alternative view, possibly articulated first by French trade unions in 1920,48 and by Karl Kautsky in Germany in 1924 (Kautsky, 1924, chs III and VIII(e)), is that enterprises have three basic stakeholders: the worker, the investor, and the consumer (or the public). When markets fail, when they do not protect the public interest, we take enterprise into public ownership, and we regulate for fair prices,49 good standards, licensing, or subsidies. Workers must always have voice and a vote. Investors usually have the vote, and this is thought to be fair whether those are private investors, or the state. Where consumers can ‘vote with their feet’, because workable market conditions for competitive private enterprise are made out, we rarely see consumers being guaranteed voting rights in law,50 though consumer cooperatives do often succeed. But where market conditions are not met, and where universal rights are at stake, the ‘consumer’ becomes more than someone with a simple exchange relation: a student, a patient, a passenger, a ratepayer, a viewer, a member.

  • 51 Cambridge University Statute A.IV.1.
  • 52 National Health Service Act 2006 Sch 7, paras 3(1)(b) and 9 and John Carvel and Giles Tremlett, ‘Mi (...)
  • 53 ‘Gouvernance’ at eaudeparis.fr, and see ‘Liberté, égalité, and a glass of fizzy water?’ (WeOwnIt Bl (...)
  • 54 Community Ordinance North Rhine Westphalia or Gemeindeordnung Nordrhein-Westfalen 1994 §§107-114.
  • 55 Royal Charter of the BBC (2016) Cm 9365, arts 10 and 35, requiring engagement and communication wit (...)
  • 56 On this point Piketty is exploring the proposals in Cagé (2016).
  • 57 This is based on Alexa rankings in November 2020, compared to 2019. Amazon and Yahoo! have edged ab (...)
  • 58 Wikimedia Bylaws (2019) art IV, §3, incorporated under Florida Statutes, Title 32, ch. 617.0206. Us (...)

16There are many examples of democratic standards in public services. The University of Cambridge, like many others, gives voting rights in its governing body to its students as well as a majority to its staff.51 National Health Service foundation trusts give votes to both workers and patients, a norm inspired by Spanish hospitals.52 The Paris water company gives votes to ratepayers in the local community.53 German state laws ensure representation, albeit via local government, for ratepayers on boards of energy companies.54 The BBC gives voice to its viewers and listeners and, though highly limited now,55 this provides a building block of what a participatory media could be (628).56 Wikipedia is the world’s 6th biggest website outside China, and was 5th overall before Covid-19.57 It gives users the right to elect half its board of trustees, an example of transnational, democratic, big-tech,58 and a model that could be adapted for other online network-monopolies, such as Google, Facebook, or Twitter. Stakeholder voting rights and power can be guaranteed even before public ownership. But in a system of public enterprise, voting rights for the citizen-as-consumer are embedded in our democratic culture. The vote is coming to be, and should be, seen as a basic norm of our modern economic constitution (McGaughey, 2021, forthcoming).

3.2 Legal Construction of Markets, and Tax

17The second main point is that the legal construction of markets can change distribution to a vast extent, before any redistribution by tax. As Piketty writes, the “level of wages and profits … depends on prevailing institutions, rules and bargaining power … as well as on taxes and regulations” (ch. 12, 641). Similarly, as Jan Pen once wrote, income distribution reflects the corporate ‘command structure’ (Pen, 1981, 361). Income accumulates into wealth and so we may summarise a general causal pattern as follows:

18law → corporate power → income → wealth

  • 59 See Buckley v Valeo 424 US 1 (1976) where the corruption of US politics with money began.
  • 60 Cf. ‘Swiss court orders historic referendum re-run’ (BBC News, 10 April 2019), where voters were gi (...)

19There are many more causes of ‘power’ in the wider sense (e.g. psychology), and other causes of extremely unequal income (e.g. lotteries) or unequal wealth (e.g. inheritance). Nevertheless, the world’s richest people all depend on taking an unjust share of riches from other people, either through corporations or nation-states. Their wealth comes from taking as much as they can from workers, investors, consumers, and the public, giving as little back as possible, and calling the difference ‘profit’. The biggest threat to democracy today, particularly evident in the US, is that politics is corrupted by money. If money can be used in elections without limits,59 or misused in referendums without enforceable consequences,60 if voice in the media is set by oligarch shareholders and not journalists, a different causal pattern results:

20wealth → political power → law

  • 61 E.g. Friedman (1953, ch. 1, 4) putting forward the evidence-free conjecture that minimum wage and o (...)
  • 62 John Stuart Mill, Principles of Political Economy (1848) Book V, ch I, §2, when once it is admitte (...)
  • 63 Cf. Weimar Constitution 1919 art 153, Grundgesetz 1949 art 14(2) ‘Eigentum verpflichtet’ or ‘Proper (...)
  • 64 This seems to be what underlies most of Friedrich von Hayek’s thinking.

21This analysis differs from assumptions in some economic theory, that presumes there is something fixed thing called the ‘market’ and that ‘supply and demand’ determine prices.61 The reality is there are infinite types of market, because markets themselves are “a web of social and fiscal regulations.” (550) They are built through contract, property, corporate, labour, consumer, securities, discrimination or environmental law. Different configurations of these rules all change the amount that people demand or supply, and therefore prices. The notion that law ‘interferes’ with ‘markets’ shows a total failure to grasp that there is no such thing as a pre-law, pre-social market. To sell something that is ‘mine’, I need the state-backed coercive power of enforceable property rights to show it is ‘mine’ (Hale, 1943). Moreover, for an enforceable contract on any terms, there is always a decision about which kind of terms society deems just, and compatible with public policy, to lend state enforcement.62 Contrary views often come down to an ideological nostalgia for some 19th century vision of property without responsibility,63 or contract without rights, a nostalgia for a time when owning wealth was necessary to vote in politics (chs 3-5).64

  • 65 Paul Mason (Guardian, 1 March 2020), referring to a survey of voters in ex-Labour seats after the 2 (...)

22Tax tends to differ from market regulation, because tax takes away existing rights of property, or a takes a sum calculated as a percentage or fee on a transaction. While we may know that taxation is the price of civilization, psychologically, taxation often triggers a sense of injustice, and many people “outright reject attempts to take money from the modestly well-off and even from billionaires”.65 Many people’s sense of injustice at being taxed is real, and this probably comes from the ‘endowment effect’. This is the behavioural phenomenon that people like to hold on to things, apparently because we just like things (Kahneman, Knetsch, and Thaler, 1990). Even if it is not a thing, but money, people who feel ‘endowed’ with something are averse to losing it, even with the offer of a higher gain. In this way, we are human, and not always rational. Corporations, of course, can be more rational, more calculating, as like states or other social institutions they develop rules and rational practices over time.

  • 66 See the Green Recovery Act, and explanatory notes (v 1.1) and the original released by Common Wealt (...)

23This points to three main issues. First, if the unjust distribution of income and wealth can be prevented, it is better to do this rather than (or as well as) correcting the problem after the fact. ‘Pre-distribution’ will meet less political opposition, and the arguments can be made on their own merits: to give everyone the right to vote at work, to vote on their money, and to vote in their public services. This is an intrinsically moral imperative. Second, the most successful narratives of tax always speak in terms of paying a ‘fair’ share of tax, rather than simply taxing the rich. Sure, tax the rich more because that is fair. But also, successful politics often means promising to cut taxes. A primary goal for social democratic parties should be cutting regressive taxes such as VAT, or National Insurance, which rose while corporate tax, inheritance tax, and top bands of income tax were reduced. Third, carbon taxes have continually met overwhelming political opposition, and have not been sufficient to achieve the goal of eliminating fossil fuels. The tax proposed by Piketty at around €100 per tonne of carbon would be a very good idea, but the tax should operate to eliminate itself. By contrast, bans create even more moral clarity, and galvanise more political support. We must ban all coal, oil and gas as fast as technologically possible,66 and as Piketty writes, all reserves of fossil fuels ‘would be better kept in the ground to prevent global warming’ (654).

3.3 The Nature of Social Justice

  • 67 Cf. Aristotle, Nicomachean Ethics, Book V.
  • 68 Cf. Plato, The Republic, Book IV, Part V, 139, translated by D. Lee, “the worst of evils” that “spe (...)
  • 69 E.g. Paine (The Rights of Man, [1972] 2010, Part II, ch. 3), “There is existing in man, a mass of s (...)
  • 70 Berle (1959, 133), the economic system shall give direct available opportunity—which is the real m (...)

24A third main point is that social justice must replace the ideologies persistent in economics and law. ‘Social justice’ is a creative justice. It does not merely correct or distribute what is already there,67 but its foundation is indeed the fundamental rights that Piketty highlights (ch. 17, 697-698). In a truly just society, human capacity expands through education, better health and sustainable prosperity. It reverses the Platonic notion that people should never change jobs and are confined to their social class for life.68 Social justice enables everyone to fulfil their potential. Human creativity is freed when people have voice in political and economic power, and the security and material resources to plan their lives.69 Far from a ‘mirage’ (Hayek, 1977, ch. 9), social justice includes an ‘economic system’ that guarantees ‘direct available opportunity’ (Berle, 1959).70 If ‘justice’ at its most basic is getting what we are due, social justice is the duty we owe to each other to create a better world, to ‘lend a helping hand’ to each other, and to improve the content of our character (Spinoza, 1677). This is the concept behind the second to last, oft forgotten article 29 of the Universal Declaration of Human Rights. “Everyone has duties to the community in which alone the free and full development of his personality is possible.” When we create human development for everyone, that is justice and makes our society just.

  • 71 Eleanor Roosevelt, Adoption of the Declaration of Human Rights (speech delivered in Paris, 9 Decemb (...)

25As Piketty writes, “it is wise to be wary of abstract and general principles of social justice”, because what matters is the “concrete policies and institutions” (969). As the old labour lawyer, Bill Wedderburn, put it that means “hard legal analysis allied to an alternative social vision” (Wedderburn, 1992, Preface). The social vision in the Universal Declaration was the most comprehensive answer to fascism we have, and contains the principles to fight the hyper-capitalist base of the crazed, identitarian, nativist, fossil-fueled far-right, manifested in Trump, Farage, Le Pen, the AfD, Lega Nord, Putin, Modi, Bolsonaro, and the rest. The crowning achievement of the Universal Declaration was showing that while personal property is a human right (not a corporate right), it is just one among many. Those other rights, which are essentially concerned with productive property (Berle, 1965), include “the right to work”, “just and favourable remuneration”, “social security”, “holidays with pay”, “a standard of living adequate for the health and well-being” of everyone “including food, clothing, housing and medical care”, to education, including free university, “the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.” (UDHR 1948 articles 17-27) This is the “Magna Carta of all”,71 the constitution of human kind, the basis of our global polity. If we are to have ideology, let it be not one that perpetuates inequality, but one that says all “human beings are born free and equal in dignity and rights.” Let the ideal be “Democracy and social justice” (Brandeis, 1916).

4. Conclusion

  • 72 See Smith ([1776] 1976) Book I, ch. 8, §12 (on labour’s unequal power), Book V, ch. 1, §107 (on cor (...)
  • 73 Kahn-Freund (1981, 102), “All these abstractions contain within them socially opposed and contradic (...)
  • 74 Deakin (2012), building on Ostrom (1990).

26If we are “saturated in ideology”, as Piketty writes, then economics and law are two of the main culprits. Economics often departs from its roots, when its constructs of the ‘market’ and ‘firms’ ignore labour’s unequal bargaining power, the “negligence and profusion” of unaccountable corporations, and the need for public ownership and standards for essential services.72 Law often departs from reality, when its abstractions of property, contract, or corporate personhood conceal “the exercise of social power behind a veil of law”.73 The task in both fields is to develop a new understanding and grammar, coherent with history, philosophy, sociology, and anthropology, that fits the evidence and data. All successful theories must ultimately be empirically grounded.74 Perhaps the greatest achievement of Piketty’s work could be to bring economics back to the values in the Universal Declaration of Human Rights.

Haut de page

Bibliographie

Ariely, Dan. 2011. The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and Home. New York: Harper.

Aristotle. [350 B.C.E.] 1953. The Ethics of Aristotle: The Nichomachean Ethics. Transl. by J. A. K. Thomson. Crows Net: George Allen & Unwin.

Balzer, Harley. 2005. The Putin Thesis and Russian Energy Policy. Post-Soviet Affairs, 21(3): 210-225.

Berle, Adolf A. 1959. Power without Property: A New Development in American Political Economy. New York: Harcourt, Brace & Co.

Berle, Adolf A. 1965. Property, Production and Revolution. Columbia Law Review, 65(1): 1-20.

Brandeis, Louis D. [1914] 2009. Other People’s Money and How the Bankers Use It. New York: Cosimo, Inc.

Brandeis, Louis D. 1916. The Living Law. Illinois Law Review, 10: 461-476.

Cagé, Julia. 2016. Saving the Media. Cambridge, MA: The Belknap Press of Harvard University Press.

Churchill, Winston. [1946] 2013. Speech to the Conservative Party Conference (5 October 1946). In W. S. Churchill (ed.), Never Give In! Winston Churchill’s Speeches. London: A&C Black.

Clinton, Alan. 1984. Post Office Workers: A Trade Union and Social History. Crows Nest: Allen & Unwin.

Constine, Josh. 2017. Facebook Changes Mission Statement to “Bring the World Closer Together”. Tech Crunch, June 22.

Deakin, Simon. 2012. The Corporation as Commons: Rethinking Property Rights, Governance and Sustainability in the Business Enterprise. Queen’s Law Journal, 37(2): 339-381.

Drucker, Peter F. [1976] 2013. The Unseen Revolution: How Pension Fund Socialism Came to America. Amsterdam: Elsevier.

Florio, Massimo. 2004. The Great Divestiture: Evaluating the Welfare Impact of British Privatizations, 1979-1997. Cambridge, MA: MIT Press.

Ferreras, Isabelle. 2017. Firms as Political Entities: Saving Democracy through Economic Bicameralism. Cambridge: Cambridge University Press.

Friedman, Milton. 1953. Essays in Positive Economics. Chicago: University of Chicago Press.

Hale, Robert L. 1943. Bargaining, Duress, and Economic Liberty. Columbia Law Review, 43(5): 603-628.

Hamilton, John, and Simon Deakin. 2015. Russia’s Legal Transitions: Marxist Theory, Neoclassical Economics and the Rule of Law. Hague Journal on the Rule of Law, 7(2): 283-307.

Hayek, Friedrich A. 1977. Law, Legislation and Liberty, Vol 2. The Mirage of Social Justice. Chicago: The University of Chicago Press.

Hickel, Jason. 2017. The Divide: A Brief Guide to Global Inequality and its Solutions. New York: Random House.

Hirst, Scott. 2018. Social Responsibility Resolutions. Journal of Corporation Law, 43(2): 217-244.

Jenkin, Fleeming. [1887] 1931. The Graphic Representation of the Laws of Supply and Demand. In The Graphic Representation of the Laws of Supply and Demand and Other Essays on Political Economy. London: London School of Economics and Political Science.

Kahneman, Daniel, Jack L. Knetsch, and Richard H. Thaler. 1990. Experimental Tests of the Endowment Effect and the Coase Theorem. Journal of Political Economy, 98(6): 1325-1348.

Kahneman, Daniel. 2011. Thinking, Fast and Slow. London: Macmillan.

Kahn-Freund, Otto. 1981. Hugo Sinzheimer 1875-1945. In Labour Law and Politics in the Weimar Republic. Oxford: Basil Blackwell.

Kautsky, Karl. [1924] 2013. The Labour Revolution. Milton Park: Routledge.

Kessler, Friedrich. 1935. Book Review: Wirtschaftsführertum und Vertragsethik im neuen Aktienrecht. University of Pennsylvania Law Review, 83(3): 393-396.

Krouse, Sarah, David Benoit, and Tom McGinty. 2016. Meet the New Corporate Power Brokers: Passive Investors. Wall Street Journal. October 24.

Krugman, Paul et al. 1994. Past and Prospective Causes of High Unemployment. Reducing Unemployment: Current Issues and Policy Options. Federal Reserve Bank of Kansas City Symposium Series, 49-80.

La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny. 1998. Law and Finance. Journal of Political Economy, 106(6): 1113-1155.

Lincoln, Abraham. 1861. First Annual Message, December 3, 1861. Available at https://millercenter.org/the-presidency/presidential-speeches/december-3-1861-first-annual-message.

McGaughey, Ewan. 2014. Participation in Corporate Governance. LSE PhD, available at SSRN 2593904.

McGaughey, Ewan. 2016. The Codetermination Bargains: The History of German Corporate and Labor Law. Columbia Journal of European Law, 23(1): 135-179.

McGaughey, Ewan. 2016a. Do Corporations Increase Inequality? TLI Think paper 32/2016.

McGaughey, Ewan. 2018. Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’. Industrial Law Journal, 47(1): 76-106.

McGaughey, Ewan. 2019. Democracy in America at Work: The History of Labor’s Vote in Corporate Governance, Seattle University Law Review, 42(2): 697-744.

McGaughey, Ewan. 2020. A Draft Economic Democracy Directive for the European Union (November 6, 2019).

McGaughey, Ewan. 2021. Principles of Enterprise Law: the Economic Constitution and Rights. Cambridge: Cambridge University Press.

Mill, John Stuart. [1848] 1963. Principles of Political Economy, with Some of Their Applications to Social Philosophy. In J. M. Robson (ed.), Collected Works of John Stuart Mill, vols II and III. Toronto: University of Toronto Press.

Morrison, Herbert. 1933. Socialisation and Transport: Organisation of Socialised Industries with the Particular Reference to the London Passenger Transport Bill. London: Constable and Co Ltd, London.

Nader, Ralph, Mark Green, and Joel Seligman. 1976. Taming the Corporate Giant. New York: W.W. Norton.

Ostrom, Elinor. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.

Paine, Thomas. [1792] 2010. Rights of Man. Part the Second. Combining Principle and Practice. Gale Ecco.

Palladino, Lenore. 2020. The Potential Benefits of Employee Ownership Funds in the United States. Available at SSRN 3667152, 2020.

Pen, Jan. 1971. Income Distribution. London: Allen Lane.

Plato. [315 B.C.E.] 1974. The Republic. Translated by David C. Lee. London: Penguin Books.

Posner, Eric A., Fiona M. Scott Morton, and Glen E. Weyl. 2017. A Proposal to Limit the Anti-Competitive Power of Institutional Investors. Antitrust Law Journal, 81(3).

Robson, William A. 1950. Nationalised Industries in Britain and France. American Political Science Review, 44(2): 299-322.

Smith, Adam. [1776] 1976. An Inquiry into the Nature and Causes of the Wealth of Nations. In R. H. Campbell, A. S. Skinner and W. B. Todd (eds), Glasgow Edition of the Works and Correspondence of Adam Smith, vol. 2. Oxford: Clarendon.

Snyder, Timothy. 2018a. Fascism is Back. Blame the Internet. Washington Post. May 21.

Snyder, Timothy. 2018b. The Road to Unfreedom: Russia, Europe, America. New York: Tim Duggan Books.

Spinoza, Baruch. [1677] 1955. On the Improvement of the Understanding. Translated by RHM Elwes. New York: Dover.

Thucydides. [c. 400 B.C.E.] 1998. Pericles Funeral Oration. In History of the Peloponnesian War, translated by Benjamin Jowett (1881). London: Prometheus Books.

Webb, Sidney, and Beatrice Webb, [1897] 1926. Industrial Democracy (9th edn). London: Longmans, Green.

Webber, David. 2018. The Rise of the Working-Class Shareholder: Labor’s Last Best Weapon. Cambridge, MA: Harvard University Press.

Wedderburn, Kenneth William. Labour Law and Freedom: Further Essays in Labour Law. London: Lawrence & Wishart.

Wilkinson, Richard, and Kate Pickett. 2009. The Spirit Level: Why More Equal Societies Almost Always Do Better. London: Allen Lane.

Zahn, Johannes C. D. 1934. Wirtschaftsfuhrertum und Vertragsethik im neuen Aktienrecht. Berlin: De Gruyter.

Haut de page

Notes

1 Piketty uses “‘ideology’ in a positive and constructive sense to refer to a set of a priori plausible ideas and discourses describing how society should be structured.”

2 One might add, pretending we are postideological, or neutral, may also be ideological.

3 See chs 4-5, especially at 199; ch. 10, 434 referring to the end of laissez-faire.

4 See also Hamilton and Deakin (2015, 288-293) on Pashukanis’ early Soviet legal theory.

5 But there is also another dimension to the EU, according to the Court of Justice in Defrenne v Sabena (No 2)  (1976) Case 43/75, that it is not merely an economic union, but is at the same time intended, by common action, to ensure social progress and seek the constant improvement of the living and working conditions of their people. It is still up to the EU and all citizens to choose which tradition we want.

6 See also Balzer (2005) explaining Putin’s thesis, defended in 1997, was that Russian natural resources should be exploited to enter the world economy, and modernise its military-industrial complex. Note the dire consequences for climate damage, and Putin’s policy of denial.

7 By being dramatically overrepresented in the Standing Committee.

8 See also Hickel (2017, ch. 1, 24-32), pointing out, “the aid budget is diminutive, almost ridiculously so, when compared to the structural losses and outward flows that the global South suffers.” (27)

9 Cf. Paul Krugman (NY Times, 8 March 2020), “I’m not even sure what the book’s message is.” Krugman’s past ideological highlights (Krugman, 1994) include the evidence-free assertion that the “disincentive effects of welfare state policies” and the lack of “flexibility of the labor market” cause unemployment, so reducing job security creates a ‘tradeoff’ or as Richard Layard says “some people end up on the scrap-heap”. “Any tax or transfer payment distorts incentives” (Krugman, 1994, 57 and 74), asserts Krugman (but apparently property and contract laws do not).

10 See also Ariely (2011, ch. 10) on prior decisions affecting later decisions.

11 Cf. Raghuram Rajan (Financial Times, 25 February 2020), who resorts to a career-long monologue rather than basing his review on Piketty’s book: “Piketty’s single-minded focus on taxation and redistribution blinkers his overall vision. [This is wrong as Piketty focuses on labour rights and economic democracy, or questions of ‘pre-distribution’.] Tax policy cannot be the only cause of inequality (especially given evasion). [Piketty says the opposite: the legal structure of markets also drive inequality.] Trade, technology, winner-takes-all markets and antitrust regulation find little place in his narrative of the rise in inequality. [Rajan must not have read chapter 12 in particular, or the book in general, which heavily concerns fair trade.] And greater government spending cannot be the only solution…” [Piketty’s other solutions are labour rights, democratisation of the economy, and better public services, which Rajan presumably opposes too.]

12 E.g. Pickett and Wilkinson (2009) and see the authors’ blog summary: “You’re more likely to achieve the American dream if you live in Denmark” (World Economic Forum 21 August 2017).

13 E.g. Winston Churchill, “Speech to the Conservative Party Conference” (5 October 1946) “We oppose the establishment of a Socialist State … Our Conservative aim is to build a property-owning democracy”. Margaret Thatcher, Leader’s speech, Blackpool (1975) stating mistakenly that the ‘a property-owning democracy—a goal we still pursue today’ came from Anthony Eden. See further McGaughey (2018).

14 Cf. Pettitt v Pettitt (1970) AC 777, 829, Lord Diplock.

15 E.g. Constine (2017). Also contrast with reality Google’s slogan, ‘Don’t be evil’. Amazon’s slogan is ‘Work hard, have fun…’ (emphasis added).

16 Snyder (2018a) and see further Snyder (2018b).

17 ‘A Genocide incited on Facebook, with posts from Myanmar’s military’ (New York Times, 6 November 2018).

18 See the countless videos on Youtube, such as Saddam Hussein’s execution, Colonel Gaddafi’s pre-death torture, and further ‘Facebook, YouTube sued over Christchurch shootings video’ (BBC News, 26 March 2019).

19 ‘Pericles Funeral Oration’ in History of the Peloponnesian War (Thucydides, [c. 400 B.C.E.] 1998).

20 R (Animal Defenders International) v Secretary of State for Culture Media and Sport [2008] UKHL 15, [47]-[48] per Baroness Hale, “In the United Kingdom, and elsewhere in Europe, we do not want our government or its policies to be decided by the highest spenders. Our democracy is based upon more than one person one vote. It is based on the view that each person has equal value.”

21 E.g. UK Corporate Governance Code 2019 prov 17, Companies (Model Articles) Regulations 2008, para 23, “Directors are entitled to such remuneration as the directors determine”. Delaware General Corporation Law, §141(h) and (k).

22 Companies Act 2006 s 168 (50%). Aktiengesetz 1965 §103 (75%). Code de commerce, art L.225-61 (50%). cf. EU Shareholder Rights Directive 2007/36/EC art 6, which requires member states to enable shareholders with 5% of shares to make proposals, but nothing on board removal. In the US, the DGCL §141(k) enables companies to have ‘staggered boards’ where directors cannot be removed by a simple vote unless there is also ‘cause’, and that inevitably leads to directors litigating to keep their positions, and extremely large payouts to leave.

23 Institutional Shareholder Services, Shearman & Sterling and European Corporate Governance Institute, Report on the Proportionality Principle in the European Union (12 June 2007) explaining at this point, the US was an extreme outlier.

24 See Danny Crichton, ‘Congress should demand Zuckerberg move to ‘one share, one vote’ (9 April 2018) TechCrunch, Tess Townsend, ‘Alphabet shareholders want more voting rights but Larry and Sergey don’t want it that way’ (13 June 2017) Recode. Emma Dunkley, ‘HKEX admits Alibaba forced it to rethink dual-class shares’ (16 January 2018) Financial Times.

25 For background, McGaughey (2014), Participation in Corporate Governance (LSE PhD 2014, ch. 5, 3).

26 See Deutsche Bundesbank, Statistische Sonderveröffentlichung 9 (2005) 32 and (1998) 32.

27 Also, Brandeis (1914).

28 See especially Ferreras (2017) favouring full veto rights.

29 In the US, the Reward Work Act (S.2605) introduced by Senator Tammy Baldwin, the Accountable Capitalism Act (S. 3348), introduced by Elizabeth Warren, and Bernie Sanders, Corporate Accountability and Democracy (2019). In the UK, see The Labour Party Manifesto (2019, 64) and The Labour Party Manifesto (2017, 17). In Belgium, see ETUI (10 June 2020).

30 Eillie Anzelotti, ‘Want Fairer Workplaces? Give Employees Seats On The Board’ (Fast Company, 6 April 2018), with just 9% of Democrat-leaning voters opposed, and just 31% of Republican-leaning voters opposed.

31 European Social Charter 1996 art 22. This is a social rights document of the Council of Europe.

32 Universal Declaration of Human Rights 1948 art 21. International Covenant on Civil and Political Rights 1966 art 25(a).

33 Cf. Abraham Lincoln, First Annual Message (1861) “Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration”.

34 Note, in turn, larger occupational pension funds lead to larger stock markets, and then more diversified share capital (McGaughey, 2016, chart at part 3(a)). This logical view contrasts to the rather more problematic theories about minority shareholder rights leading to fewer blockholders, and more diversified shares. These miss the importance of a country’s pension system (La Porta et al., 1998).

35 David Webber, ‘The Real Reason the Investor Class Hates Pensions’ (NY Times, 5 March 2018), and see Webber (2018), The Rise of the Working-Class Shareholder: Labor’s Last Best Weapon (2018).

36 Centralverband des deutschen Bank- und Bankiergewerbes (1930) BankA 1930-31, 116, Beschluß “daß die Mitglieder unseres Verbandes einander gegenüber die Verpflichtung übernehmen, an die Besitzer bein ihnen hinterlegter Aktien eine ausdrückliche Anfrage über die Art der Ausübung des Stimmrechts zu richten, wenn ihnen von einem anderen Verbandsmitglied zwei Wochen vor der Generalversammlung die Absicht einer Opposition bekanntgegeben worden war”.

37 Aktiengesetz 1937 §114, now found in Aktiengesetz 1965 §135(2).

38 Zahn (1934, 93) ‘Die Demokratie des Kapitals wird ebenso verschwinden wie die politische.’ See the delusional fascist aims summarised in Kessler (1935).

39 E.g. Hirst (2018, 224-227) showing tables of resolutions and the voting record of support on political spending disclosure and carbon emission disclosure.

40 AMNT, Red Line Voting (2016). The AMNT is an organisation of elected and union pension trustees.

41 See the Regulation Against Excessive Pay at Listed Companies 2013, in German, French and Italian. This followed a Swiss People’s Initiative of 2013, winning by the second ever highest margin.

42 Dodd-Frank Act of 2010 §957.

43 Pensions Act 2004 ss 241-243.

44 The two major expressions are ‘Inclusive Ownership Funds’ in the Labour Party Manifesto (2019, 60), and ‘Democratic Employee Ownership Funds’ in the Bernie Sanders plan (2019). The details remain flexible: one idea is to issue shares, but it may seem better (if workers have votes in their company by right) to simply transfer profits to collective funds. See also the draft Economic Democracy Directive 2020 art 7, and further the work by Mathew Lawrence and Loren King, ‘Examining the Inclusive Ownership Fund’ (Common Wealth, 2019), and Palladino (2020).

45 McGaughey (2018, 76).

46 Ewan McGaughey, ‘A Draft Economic Democracy Directive for the European Union’ (2020). I am very grateful for feedback, corrections and discussion on this from Isabelle Schömann, Sara Lafuente, Alina Hoffmann and Zane Rasnača and all those at the seminar, as reported (ETUI, 4 November 2019).

47 Telegraph Act 1868 s 4 and Attorney General v Edison Telephone Co of London Ltd (1880–81) LR 6 QBD 244, nationalising telephones through a court judgment. Even Stanley Jevons remarked of the telegraph, ‘we have neither the advantages of monopoly nor those of free competition’ and he ‘would rather see that monopoly in the hand of Government than that of a private company’ (in Clinton, 1984, 33).

48 Robson (1950) and see for example the Law of 17 May 1946, art 21, on the governing board of the Charbonnages de France (Collieries of France) requiring six representatives each for the state, consumers of coal, and employees.

49 E.g. Allnutt v Inglis (1810) 12 East 527, 537, per Lord Ellenborough, “the general principle” is that “every man may fix what price he pleases upon his own property”, but if “the public have a right to resort to his premises … and he have a monopoly in them … he must, as an equivalent, perform the duty attached to it on reasonable terms”. This was adopted in Munn v Illinois, 94 US 113 (1876). Also John Fitzgerald Kennedy (15 March 1962) where “competition is not workable and Government regulation is substituted,” the US government would give “an assurance of satisfactory quality and service at fair prices.”

50 However, one proposal for this was Nader, Green and Seligman (1976, 125).

51 Cambridge University Statute A.IV.1.

52 National Health Service Act 2006 Sch 7, paras 3(1)(b) and 9 and John Carvel and Giles Tremlett, ‘Milburn seeks hospital role model in Spain’ (Guardian, 6 November 2001).

53 ‘Gouvernance’ at eaudeparis.fr, and see ‘Liberté, égalité, and a glass of fizzy water?’ (WeOwnIt Blog, 31 August 2018).

54 Community Ordinance North Rhine Westphalia or Gemeindeordnung Nordrhein-Westfalen 1994 §§107-114.

55 Royal Charter of the BBC (2016) Cm 9365, arts 10 and 35, requiring engagement and communication with audiences and staff. This could be updated to voting rights.

56 On this point Piketty is exploring the proposals in Cagé (2016).

57 This is based on Alexa rankings in November 2020, compared to 2019. Amazon and Yahoo! have edged above Wikipedia, and Chinese websites have soared, presumably because people have accelerated online shopping and are staying at home.

58 Wikimedia Bylaws (2019) art IV, §3, incorporated under Florida Statutes, Title 32, ch. 617.0206. Users are simultaneously readers and editors (i.e. workers) but voting is open to anyone with an account, and who wants to be involved. Turnout is low and depends on a group of highly active volunteers.

59 See Buckley v Valeo 424 US 1 (1976) where the corruption of US politics with money began.

60 Cf. ‘Swiss court orders historic referendum re-run’ (BBC News, 10 April 2019), where voters were given misinformation.

61 E.g. Friedman (1953, ch. 1, 4) putting forward the evidence-free conjecture that minimum wage and other labour laws create unemployment by distorting a (fictitious) equilibrium price. On the original supply and demand charts, see Jenkin (1887) who explicitly said corn prices do not work like labour’s wages.

62 John Stuart Mill, Principles of Political Economy (1848) Book V, ch I, §2, when once it is admitted that there are any engagements which for reasons of expediency the law ought not to enforce, the same question is necessarily opened with respect to all engagements.”

63 Cf. Weimar Constitution 1919 art 153, Grundgesetz 1949 art 14(2) ‘Eigentum verpflichtet’ or ‘Property carries responsibility’.

64 This seems to be what underlies most of Friedrich von Hayek’s thinking.

65 Paul Mason (Guardian, 1 March 2020), referring to a survey of voters in ex-Labour seats after the 2019 election.

66 See the Green Recovery Act, and explanatory notes (v 1.1) and the original released by Common Wealth (2020) with an introduction from Mat Lawrence.

67 Cf. Aristotle, Nicomachean Ethics, Book V.

68 Cf. Plato, The Republic, Book IV, Part V, 139, translated by D. Lee, “the worst of evils” that “spells destruction to our state” is “interchange of jobs”. When each class ‘does its own job and minds its own business, that is justice and makes our state just.’

69 E.g. Paine (The Rights of Man, [1972] 2010, Part II, ch. 3), “There is existing in man, a mass of sense lying in a dormant state … As it is to the advantage of society that the whole of its faculties should be employed, the construction of government ought to be such as to bring forward, by a quiet and regular operation, all that extent of capacity which never fails to appear in revolutions.” Webb and Webb ([1897] 1926, Part IV, ch. 4, 847-849), “We ourselves understand by the words ‘Libertyor ‘Freedom, not any quantum of natural or inalienable rights, but such conditions of existence in the community as do, in practice, result in the utmost possible development of faculty in the individual human being … When the conditions of employment are deliberately regulated so as to secure adequate food, education, and leisure to every capable citizen, the great mass of the population will, for the first time, have any real chance of expanding in friendship and family affection, and of satisfying the instinct for knowledge or beauty.”

70 Berle (1959, 133), the economic system shall give direct available opportunity—which is the real meaning of social justice—to all individuals. Averages and statistical aggregates are no longer enough.”

71 Eleanor Roosevelt, Adoption of the Declaration of Human Rights (speech delivered in Paris, 9 December 1948).

72 See Smith ([1776] 1976) Book I, ch. 8, §12 (on labour’s unequal power), Book V, ch. 1, §107 (on corporate accountability), Book V, ch. 1, §121 and Part III (on which enterprises should be publicly owned or controlled).

73 Kahn-Freund (1981, 102), “All these abstractions contain within them socially opposed and contradictory phenomena: property used for production and property used for consumption, agreements between equal parties and agreements between unequal parties, capitalist and worker. Through abstraction it is possible to extend legal rules, which are appropriate to the social phenomenon for which they were originally developed, to other social phenomena, thereby concealing the exercise of social power behind a veil of law.”

74 Deakin (2012), building on Ostrom (1990).

Haut de page

Pour citer cet article

Référence papier

Ewan McGaughey, « From ‘Capital and Ideology’ to ‘Democracy and Evidence’: A Review of Thomas Piketty »Œconomia, 11-1 | 2021, 171-189.

Référence électronique

Ewan McGaughey, « From ‘Capital and Ideology’ to ‘Democracy and Evidence’: A Review of Thomas Piketty »Œconomia [En ligne], 11-1 | 2021, mis en ligne le 01 mars 2021, consulté le 24 juillet 2021. URL : http://journals.openedition.org/oeconomia/10580 ; DOI : https://doi.org/10.4000/oeconomia.10580

Haut de page

Auteur

Ewan McGaughey

King’s College, London and Centre for Business Research, University of Cambridge. ewan.mcgaughey@kcl.ac.uk

Haut de page

Droits d’auteur

Licence Creative Commons
Les contenus d’Œconomia sont mis à disposition selon les termes de la Licence Creative Commons Attribution - Pas d'Utilisation Commerciale - Pas de Modification 4.0 International.

Haut de page
  • Logo Association Œconomia
  • DOAJ - Directory of Open Access Journals
  • Revue soutenue par l’Institut des sciences humaines et sociales du CNRS
    CNRS - Institut national des sciences humaines et sociales
  • OpenEdition Journals
Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search