Book Thoughts: Capital and Ideology

12.16.2020

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I recently finished Thomas Piketty’s Capital and Ideology and wanted to write down my impressions before they fluttered out of my head. On an extremely related note, while almost all of my posts to date have been technology related, I’ve decided that it’s my blog, I can and should write about whatever is interesting to me.

Summarizing the book would be a fool’s errand; the thing is dense. But to give the briefest of introductions, if Piketty’s Capital in the Twenty-First Century was all about introducing the magnitude of financial inequality that exists today, Capital and Ideology is more about the history that led to that state, and how the ever-evolving political climate has contributed to that. I have a bit of a pet interest in finance, economics, and yes, I suppose politics, so it was right up my alley.

So. Some lessons that stood out to me:

We Are Bad At Taxes

Unsurprisingly, there was much discussion of tax policy through the years. Piketty makes what I thought were two interesting points. The first is that taxes, especially on wealth and property, are not just useful for redistributing to those less fortunate, but actually intentionally decreasing the wealth of those at the upper ends. I know this thought makes many people bristle, but I am at least glad that he “said the quiet part out loud,” as there are two sides to inequality: it’s not just the poor getting poorer, it’s very much so the rich getting richer!

The text also made me think more about how many not-so-secretly regressive taxes we have in society, especially when many people (even those who just vomited at the paragraph above) agree that a progressive tax code is generally a good thing. Case in point, I love living in Washington, and the state leads the way in many positive initiatives, but having a sales tax instead of an income tax is seriously off-brand and weird.

Patterns in History

There were a couple of patterns that Piketty discussed, that were particularly interesting due to how they cropped up in entirely different parts of the world independent of one another.

A good-sized chunk of the book is spent talking about “trifunctional societies” – civilizations where there were essentially three classes: the nobles, the clergy, and everyone else. This societal organization repeated itself across continents and only finally (mostly) ceased to be in the last couple of centuries. Piketty makes a point to note (and this is really a central thesis of the book) that no matter how crappy a society’s organization looks in the rear view mirror, they all had their own prevalent justifications at the time. Of course, a justification doesn’t have to be good or convincing; but it’s often enough for it to exist, and it can be hard to imagine life in any other way until you have the benefit of hindsight.

The second trend is more recent, which is the shift in political demographics across many countries (though to be fair, mostly Western ones). In general, the trend is that the more educated you are, the more likely you are to vote for left-leaning politicians. This has been a slow shift since about the 1960s until today, when education is an extremely strong predictor of one’s politics. There has also been a shift in economic terms; it is slowly becoming the case that those who are more financially well off are more likely to vote left (though it hasn’t entirely switched this way). These trends, I suppose, were not particularly surprising to me, but above all they made me think about how demographic trends can be spun in both positive and negative lights. It’s easy to say, “Why yes, the parties of the left have the support of the well-educated, because the well-educated are smart enough to know what’s right and just in society.” But it’s also fair to say, “The parties of the left have lost the support of those in disadvantaged and less-well-educated groups, and they should be ashamed, because we should support those most in need.”

Workers on Boards

A specific strategy for decreasing inequality that Piketty endorsed was representation for workers on boards of directors. This is already a practice in some countries, such as Germany (though the workers don't always have a ton of power in the boards they serve on). It made me think about the announcement last year by Very Important Business People that stakeholders other than just shareholders should be considered when a company makes decisions. This was met with skepticism by one of my favorite writers, Matt Levine, as it is a very nice thing to say, but it’s another thing to actually do. Saving seats for workers on the board of directors would be one way to do this, and is a real, actual thing that happens in the world (i.e. it’s not really that far fetched).

There is so, so much more to ponder from this book. Above all, it serves as a really great history lesson, and while still quite Western and Franco-centric, Capital and Ideology views the world with a much wider lense than its predecessor. I know everyone says this, but I think someone who was very-much-not into the idea of anything with the word “social” in front of it could still enjoy it if interested in the topic. At least as a jumping off point for arguing against it!