{"id":42170,"date":"2014-04-28T12:00:31","date_gmt":"2014-04-28T11:00:31","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=42170"},"modified":"2015-05-05T21:35:04","modified_gmt":"2015-05-05T20:35:04","slug":"why-21st-century-capitalism-cant-last","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2014\/04\/why-21st-century-capitalism-cant-last\/","title":{"rendered":"Why 21st Century Capitalism Can\u2019t Last"},"content":{"rendered":"

Thomas Piketty\u2019s explanation is a welcome sign of progress.<\/em><\/p>\n

The response to French economist Thomas Piketty\u2019s \u201cCapital in the Twenty-First Century<\/a>\u201d has been surprising, to say the least. Though the Amazon best-seller<\/a> is well written and artfully translated from French by Arthur Goldhammer, the 696-page text is filled with enough charts and footnotes to occupy experts for months. Indeed, the work was based on decades of research conducted by an entire team of specialists tracking centuries of income and wealth patterns.<\/p>\n

The book presents a simple thesis: Unchecked, capitalism\u2019s natural dynamics lead to an unequal concentration of wealth. This trend is increasing at a rapid rate; absent a wealth-destroying catastrophe such as war or depression or powerful new egalitarian political movements, we can expect that to continue.<\/p>\n

Piketty elegantly explains that when the rate of return on existing capital (r) exceeds the economic growth rate (g) \u00ad\u2014 as has been the case through most of capitalism\u2019s history \u2014 the wealthy will grow wealthier than society as a whole, with disastrous consequences for future social and economic development. In more technical terms: r > g = :-(<\/p>\n

In America, as in Europe, the past century\u2019s dynamic can be visualized by a U-shaped curve. Before the Second World War, the top 10 percent captured almost half the national income, before seeing their share dramatically eroded in the booming postwar years. Since the era of Reagan, however, we\u2019ve stumbled into another Gilded Age.<\/p>\n

Which leads to the obvious question: What can be done?<\/p>\n

Money and power<\/strong><\/p>\n

Piketty, who\u2019s active in the center-left French Socialist Party but resists being characterized as a Marxist, offers some solutions of his own. The assessment of a global wealth tax is his most notable. Not just stocks and bonds, but land, homes, natural resources, patents and more would be subject to this tax \u2014 making it more far-reaching than any progressive levy on income. The policy would have to be coordinated across the developed world to avoid the problem of capital fleeing across borders to escape it, a difficult proposition but not a technically impossible one.<\/p>\n

Yet the implications of his analysis go deeper. It isn\u2019t that the rich are getting richer; it\u2019s that they\u2019re also getting more powerful. Across the world, inroads against economic democracy \u2014 collective bargaining rights and robust social welfare programs \u2014 since the 1970s have undermined political democracy, and that\u2019s going to make mere policy shifts even more difficult to achieve. Workers aren\u2019t pushing for wealth redistribution anymore; in fact, they\u2019re actually losing battles to preserve gains won in past generations. No longer threatened at the grassroots, the ability of the world\u2019s wealthiest citizens to shape politics is nearly absolute.<\/p>\n

The actual implementation of democratic reforms happened in spite of, not because of, capitalists.<\/p>\n

Developments in the United States, such as the Citizens United and McCutcheonrulings eliminating limits on campaign fundraising restrictions, have made the connection between financial wealth and political influence even more apparent. But despite public outrage \u2014 almost 90 percent<\/a> of Americans think there\u2019s too much money in politics \u00ad\u2014 reform appears to be a faint hope.<\/p>\n

In fact, there\u2019s plenty of evidence to suggest that the U-shaped curve of the past century will start to look like a fishhook, with two major \u201cleveling\u201d forces of the postwar years \u2014 namely, high rates of unionization and the growth of mass parties representing the interests of workers \u00ad\u2014 in indefinite decline.<\/p>\n

Productive power<\/strong><\/p>\n

Most people have come to associate capitalism with the advent of modern political democracy, on the theory that the growth of the market freed feudal minds and bodies.\u00a0But while it\u2019s true that capitalism\u2019s productive power \u2014 new wealth from trade and investment, urbanization, advances in communications \u2014 made this democracy possible, the actual implementation of democratic reforms happened in spite of, not because of, capitalists themselves. As many modern scholars<\/a> have argued, the roots of democratization were in the organized working class. Though workers needed the assistance of a host of allies from throughout society to triumph, these popular coalitions fought against yesterday\u2019s oligarchs to secure suffrage and push for the social protections we take for granted today. Democratic reforms were foisted on resistant elites, from the English and French revolutions of the 17th and 18th centuries on to the struggles of the last. The results were by no means absolute \u00ad\u2014 formal equality in the form of \u201cone person, one vote\u201d has never resembled anything close to actual equality \u2014 but these were major victories for ordinary people.<\/p>\n

Elites are just as keen today as they were then to exclude others from the political process. The billionaire Koch brothers, who have funded many conservative and libertarian political causes, are little more than more banally dressed mirror images of the great estate holders and factory owners of the Industrial Revolution. They have the same compulsion to accumulate profits at the expense of their employees, and they\u2019d like to do so with as few regulations in their way as possible.<\/p>\n

Lucky for them, with the near disappearance of the international socialist movement and the organized working class in the past decades, the path has been opened for an anti-democratic counterrevolution of sorts.<\/p>\n

Redistributionist conclusions<\/strong><\/p>\n

But perhaps there\u2019s hope. That so many people are trying to tackle \u201cCapital in the Twenty-First Century\u201d is at least a testament to a growing public interest in capitalism \u2014 the force that shapes their lives.\u00a0And even if they\u2019re not reading all 700 pages, many are more than comfortable with endorsing its redistributionist conclusions. It\u2019s possible that in the long term more of them will see that resisting capitalism is the only path out of a world where some can live on rents and interest, while many spend their whole lives working themselves to death.<\/p>\n

And yet, as Piketty\u2019s book alludes to, the more time passes, the more entrenched and powerful the scions of capital\u00a0will become. We\u2019ll need to muster the forces capable of challenging them sooner rather than later. And though \u201cCapital in the Twenty-First Century\u201dis more than welcome, it\u2019ll take more than a best-selling tome to do so.<\/p>\n

___________________________<\/p>\n

Bhaskar Sunkara is the founding editor of Jacobin<\/a> and a senior editor at In These Times<\/a><\/em>.<\/p>\n

Go to Original \u2013 aljazeera.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The response to French economist Thomas Piketty\u2019s \u201cCapital in the Twenty-First Century\u201d has been surprising, to say the least. Though the Amazon best-seller is well written and artfully translated from French by Arthur Goldhammer, the 696-page text is filled with enough charts and footnotes to occupy experts for months.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67],"tags":[],"class_list":["post-42170","post","type-post","status-publish","format-standard","hentry","category-reviews"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/42170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=42170"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/42170\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=42170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=42170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=42170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}