Thursday, February 22, 2018

Piketty: “Why have democratic regimes failed to reduce inequality?”

This is the question asked by Thomas Piketty in a recent presentation on “Brahmin Left vs Merchant Right: Rising Inequality and the Changing Structure of Political Conflict - Evidence from France, Britain & the US, 1948-2017 (February 2018). His answer, which is documented by very extensive and useful data, is fairly complex but it could, in a nutshell, be summarised thus: in the '50s and ‘60s the Democratic Party in the US and social democratic parties in Europe were supported by a variety of voters characterised by low education and low income. Globalization (by raising the issue of internal and external inequality) and the expansion of education (creating educational inequalities next to wealth inequalities) have created new multi-dimensional conflicts about inequality and redistribution.
Democratic regimes – answers Piketty – have failed to reduce inequality because "without a strong egalitarian and internationalist platform, it is unlikely that voters by low education and low income will all vote for the same party. The division between racism and nativism is a powerful force that divides the poor in the absence of a strong unifying platform. Politics has never been a simple conflict between the rich and the poor; we need to look more carefully at the content of political cleavages." Piketty argues that since the '70s and' 80s a political system has evolved that pits two transversal coalitions against each other: the intellectual elite of left wing Brahmins against the business elite/merchant right, both sharing the divided support of a working class whose interests are radically different and are not reflected in the parties.
A similar argument, without the massive documentation provided by Piketty but perhaps more fully argued, has been provided by Jan Rovny on the LSE Europpblog on 20 February: “What happened to Europe’s Left?”  I confess that being a left-wing economist I found the argument rather appealing, so I circulated both Piketty’s presentation and Rovny’s paper to a circle of colleagues and friends who I knew would be interested. However one of them, a political scientist whose views on the subject I had specifically solicited, was provoked by those arguments to provide a long critical comment, which I thought deserved to be aired more widely. Therefore I am very glad to post such a Comment below, with the author’s permission on condition of anonymity. DMN

Piketty's enthusiasm for his discovery of political science is heart-warming. You asked me for a view:

i)  to adopt a brush as broad as does Piketty is to empty much of his argument to rest upon historical and particularly statistical data available.
ii)  comparative politics can be useful but arbitrary lumping-together of very different political systems and cultures because of accessibility of chosen data sources leads to incoherence not to affirmation of a thesis.
iii)  the same goes for taking very long data series and arbitrarily cutting them off within his time terms of reference.
So what has he achieved?  He has produced a hypothesis, reflecting journalistic speculation, that the voting behaviours of electorates formerly possible to analyse in economic and class terms have altered across groups; this is causing the collapse of parties of the Left which he views as rooted in common economic and class interests.  Electorates are no longer voting for donkeys wearing a red rosette.  Electors in positions of authority are no longer voting in their economic self-interest.
Neither of these theses are correct; nor does the statistical, behavioural, historical evidence demonstrate that there is any past time in which they were.  Piketty picks and chooses his way through his data to show that they were but the clear association of change brought about by revolution, war, or some socio-economic or other catastrophe, is telling.
iv)  identifying a Piketty-esque Europe as Europe leads to warping of supporting evidence for his thesis; so does using United States data (size, lack of common history, slavery, just for starters; I could go on - that there is no 1945 break for the US as there is for Europe, that the living standards of the US and those of Europe are too far apart for long periods even within Piketty's dates...).  For Piketty Europe is the European Union, and mostly France at that.  Even within this narrowing of the study where is the data on Germany, Italy, the low countries, the East, the far North?  He should drop the US and start considering real Europe, not the EU.  There is a European community of culture, experience, economy and development, although that Europe tends to exclude the second of his data sources, the United Kingdom.
v)  Data series for the UK go back much further than for continental Europe; those on which Piketty relies can be produced from at least the beginning of the eighteenth century and many from the seventeenth and even earlier, both for electoral behaviour and for collections of data on conditions of life, state-organised welfare systems, educational records, health systems, social and work-related housing - the panoply of the modern welfare state is present and recorded.  Its roots make the electoral results of July 1945 the product of victory in war not the poverty of defeat as experienced by continental states, including France despite their pretences.  And as soon as the war economy had served to complete the installation of the redistribution that had been taking place for centuries in the UK, even if overshadowed by the Depression in the ‘20s and ‘30s where it had been fully used and available, nevertheless, the 1951 general election swept the Labour government away. 
The UK returned to something very similar to the redistributions that had been taking place for a long time, shedding the role of the state always associated with authoritarian regimes of Left or Right. The redistributive role of an extensive welfare state was fully accepted by all political groupings, there was no post-War watershed as there was in continental Europe (where populations were widely illiterate, still working the land and often as share-croppers, and urbanisation and modern industrialisation was still to come despite the best efforts of Left and Right).  Labour never recovered, and Margaret Thatcher moved every aspect of the state's role in government on to other ground that socialism or capitalism choices, as Blair's electoral success confirmed.
So, in many ways Piketty's use of UK data is as inappropriate as his use of that of the US.  He wants to tie together some kind of factual link between 'want, disease, ignorance, squalor, and idleness' and voting Right: what the UK data show is not that.  The Five have been tackled and defeated and the people vote Right for aspiration, self-fulfilment, the barring of the Five's reintroduction into their countries via third-world immigration, and a continued growth in their living standards and capacities to learn and achieve.
Yes the decline in voting for Piketty's Left is terminal for electorates have moved on as he and his Left have not. Political parties are re-grouping, that is very clear, but they regrouping to defend the people and their life-styles against out-dated ideologies of deprivation in all its forms.
Tony Judt spoke of 'ideological over-commitment' (although in another context, that of Israel, much of his work on France and the French Left embodies this critique); Piketty would benefit greatly from reading (or re-reading) Tony Judt. Another book he might add to his to read list is: Robert Trelford McKenzie and Allan Silver, Angels in marble; working class Conservatives in urban England, 1968.

Rovny is ponced-up Piketty.  There is a flat refusal to accept the role of Conservative working people in the construction of organisations, in institutions, in governance that has been present always (i.e. since records in the Piketty form) have been available.  It is the securing of decent wages, the legitimising of trades unions, the achievement of access to health care, the educating of every child to competent literacy and numeracy, the universal suffrage, pension support in old age, insurance, ... all the stuff the Left claims - it is all the product of skilled working people and the arrangements and agreements they have set in place over the centuries yes, centuries in the case of the UK.
The ideological Left cannot cope with the truth of this.  Their function has been to create revolutionary, i.e. war-like shocks that disrupt so much there must be destruction and then a settlement.  If the Left cannot produce a revolution then the Conservative working class can manage much better without them.  And often better than with them frankly.  There has to be technical backwardness, widespread illiteracy, gross deprivation of democratic governance, low life expectancy, and the general presence of the Five before revolution and the Left is required.  
Europe has been revolutionised and warred into what the UK did with working class conservatism (admittedly after the 17th century revolutions as a start-up shock, but that is a very long time ago) since capitalist industrialisation and urbanisation.  Even the localist organisations listed by Rovny are the result of municipal conservatism – why do you think it's modern Labour that individualises the social consumption of social provision, or closes pools, libraries, parks, evening classes etc. etc?
The Left is ineffective and very ugly.  Unless there's a revolution or a war to be raged.


Quarantotto said...

Ottima analisi (Pikketty ci fa o ci è? O entrambi?).

Aggiungerei che P. confonde la democrazia liberale, restaurata in Europa...dall'€uropa con la democrazia sociale, cioè quella che è la ragion d'essere dei partiti "socialisti" (in senso scientifico marxiano): cioè della sinistra in quanto proiettata in partiti di massa che offrono una soluzione al conflitto distributivo innescata dal capitalismo sfrenato, come lo definiva Popper (compatibile col suffragio universale; v. Gramsci ). E infatti dimentica che:

Naturalmente la democrazia è SOLO quella sociale; in Italia l'avevamo capito, ma è durato pochino

Guido Ortona said...

This is very interesting. We all tried to understand the underlying causes of the decline of the left. There are great similarities even in very different cases, which suggests the existence of universal though very general causation. My suggestions:

a) the starting point is the end of the working class (and therefore of its political expressions, Unions and parties) as the potentially dominant class, with the advent and growth of the tertiary sector;

b) with the end of big industry as a key sector of the economy, workers were faced with a colossal prisoner’s dilemma, in which the dominant strategy was to "save themselves" (or "save the company” or “save their category" etc.) while the most efficient strategy would have been a Scandinavian strategy of major political reforms;

c) this universalistic best strategy was very difficult to work out and and to assert (although there have been some interesting attempts), and this has obviously contributed to the generalization of the inefficient strategy;

d) these trends have been strengthened further by globalization.
Let us hope.

Mike Meeropol said...

A most interesting post. As an American I would not feel comfortable discussing Europe or even the UK. But for the US Piketty’s argument seems spot on: racism has always destroyed efforts to build class solidarity in the US – whether it was populism in the South between 1890 and 1900 or the so-called Roosevelt coalition which brought us a (to use the French term) "regulation regime" of "social democracy" US style (I put it in quotes because it pales by comparison with the European versions) between 1935 (the passage of the Social Security Act and the Wagner Act) and 1980 (I date that for the election of Reagan though other benchmarks in the 1930s might work).

I recently reviewed David Kotz's “The Rise and Fall of Neo-Liberal Capitalism” (in “Challenge” 58(4), I think Kotz’s analysis (and in fact the whole idea of a "neo-liberal" Social Structure of Accumulation in the US that was built in the 1970s and 80s and flourished till 2008 when it's continued viability was thrown into question) is consistent with what I think Piketty is saying.

Your commentator seems to focus on Europe, so it is unclear what she/he thinks of Piketty’s comment about the US. One thing is certain: the US never had a "working class" party; Debs Socialists came closest but they were destroyed during WW I never to rise above the role of miniscule 3rd parties again.

Renzo Daviddi said...

I feel that Piketty’s criticism by your anonymous political scientist is somewhat unfair, considering the earnest and painstaking work on which Piketty bases his considerations. S/he accuses Piketty of being France-centered only to propose criticisms that do not go past the Channel. It is questionable whether conservatives can be credited with significant welfare state initiatives. And Britannia no longer rules the waves.

Ton said...

Back to Paolo Sylos Labini, Essay on Social Classes (1974) then.

D. Mario Nuti said...

But now, Renzo, Britannia waves the rules!

Jeff G. said...

Renzo, You might be surprised to learn that in the large municipality of Leeds where I live the Conservatives took the lead in the early and middle part of the Twentieth Century in providing decent housing for working people and were later strong proponents of non-selective comprehensive education. The municipality voted only by a whisker to 'remain' in the EU, by the way, on a high turnout, and this in a city of three universities and big financial and legal sectors.