The left has always thrived on hero-worship: Marx of course, but also Gramsci, Chomsky, Žižek and various omniscient others whose scribblings, preferably written in the Higher Gibberish, are pored over to find irrefutable proof of the imminent collapse of capitalism and the deep immorality of anyone who would rather not be ordered around by civil servants.
The latest of these figures is “rock star economist” Thomas Piketty, whose new book Capital in the 21st Century has sent The Guardian into gushingly ecstatic paroxysms, by showing that “capitalism simply isn’t working” (Will Hutton), and is being “killed” by “rising inequality” (Larry Elliott), meaning that “progressive ideas are at last winning” (Chris Huhne). “The singular significance of his book is that it proves "scientifically" that this intuition [of the Occupy movement] is correct” (Andrew Hussey). Truly is it “manna from heaven” (Len McCluskey). Only Polly Toynbee grumbles that he’s only saying what she and loads of others have already said countless times before.
Prof Piketty has crunched a giant quantity of data to argue that the returns to capital massively outweigh those to labour. This means, apparently, that capitalism will inevitably exacerbate inequality, and ultimately will threaten democratic order. The many long periods where inequality was reduced were all aberrations, and although democracy has somehow limped through centuries of money-making, the excrement will prang the ventilator some time soon.
Well, maybe. I certainly don’t want to impugn Prof Piketty’s econometric skills, and even if we take it that his analysis of the past is likely to be more reliable than his projections of the future, this is obviously an important book. Any informed and civilised contribution to the big debates is to be welcomed.
What particularly interests me is that it has been seen as manna from heaven by the left, whereas actually it is really telling them what asses they have been. A central conservative trope is scepticism about theory. No-one has the whole picture, and the unintended consequences of rationalist policy will almost always outweigh the intended ones, especially in a dynamic, complex society like our own. Theories will be inadequate, and so policies based on theoretical models will more often than not fall short.
So says the right, from Burke to Oakeshott to Hayek. What does Piketty tell us?
The 20th century was a golden age of socialism, in which many governments tried to undo inequality. They didn’t really do very well – sometimes they succeeded at great economic cost, and sometimes they failed. Their main policy lever was a redistribution of income via taxes.
But Piketty, if he is right, actually tells us that the driver of inequality is wealth. Income is small beer, and if anything is a corrective. A genuine meritocracy is income-based, chipping away at the rent-seekers via hard graft.
In other words, the left has spent a century taxing and redistributing the returns to work, thereby undoing all that labour might have done to repress inequality. Piketty tells us that the right got it right – the left’s theories failed to describe reality well enough, and their theory-based policies exacerbated the very phenomenon they were trying to abolish. And the gushing response to this new work implies that no doubt the same mistake will be made all over again in the new century.
Plus ça change, as Prof Piketty would no doubt shrug.