May 13, 2014

#Piketty: A liberal Frenchman ignorant of unions? Or not quite so liberal?

Thomas Piketty, Paul Krugman via Salon
(Credit: Reuters/Charles Platiau/Anton Golubev)
Or a left-neoliberal trying to pose as an actual liberal?

Thomas Piketty's "Capital in the 21st Century" has gotten a lot of touts. That goes even as far as Counterpunch. So, it has to be true liberal, right?

Well, Thomas Frank notes one big absence. I'd not read the book yet, but in hindsight, his review points out what all the other reviews missed.

Frank, like others, praises the analysis, while astutely noting, although without quite as much depth as Counterpunch, that Piketty's not new, nor alone.
I was puzzled at first by the extraordinary success of Piketty’s book; despite his commitment to cant-free prose, it is not an easy read. Besides, most of what Piketty tells us has been told to us before, many times over, in a three-decade long parade of forgotten treatises and sad New York Times stories on downsizing and deindustrialization.

Going beyond that, he also touts Piketty for slapping around most of his fellow economists.
One of the best things about Piketty’s masterwork is his systematic demolition of his own discipline. Academic economics, especially in the United States, has for decades been gripped by a kind of professional pretentiousness that is close to pathological. From time to time its great minds have grown so impressed by their own didactic awesomeness that they celebrate economics as “the imperial science”— “imperial” not merely because economics is the logic of globalization but because its math-driven might is supposedly capable of defeating and colonizing every other branch of the social sciences. ...

Piketty blasts it all to hell. His fellow economists may have mastered the art of spinning abstract mathematical fantasies, he acknowledges, but they have forgotten that measuring the real world comes first.
However, on the prescriptions side? Frank points out that Piketty's French souffle just fell in the oven.

Yes, he talks about a wealth tax, which all other reviews have noted.

But, in an "emperor has no clothes" moment, Frank also points out that Piketty, a native of a country where even the farmers are unionized, doesn't have bupkis to say about boosting worker organization rights. 

Frank kind of buries the nutgrafs of a critical review three-quarters of the way down. But, I'm moving it up:
Turning to the problem of income inequality here in the United States, there is an even simpler solution (than a wealth tax), by which I mean a more realistic solution, a solution that builds on familiar American traditions,that works by empowering average people, that requires few economists or experts, that would involve a minimum of government interference, and that proceeds by expanding democracy and participation rather than by building some kind of distant and unapproachable global tax authority: Allow workers to organize. Let people have a say on the basic issues affecting their lives.

Piketty’s biggest blind spot is that he has virtually nothing to say about labor unions. He starts Chapter 1 of “Capital” with an anecdote about a bloody strike in South Africa and he returns to that same tragic episode at the very end of the book, but in between he addresses the matter almost not at all. Piketty talks a good game about democracy, but like other economists who have made inequality their subject, he prefers solutions that are handed down from the lofty heights of expertise. (My emphasis.)
As I said, the man's a native of a country where the farmers unionize. It's a blind spot, or worse.

That's why I use the phrase "left-neoliberalism," which I've talked about occasionally before. Click on that tag, at bottom, for more related posts.

Hey, France is full of technocrats. Christine Lagarde runs the International Monetary Fund, one of the holy of holies places of neoliberal technocrats. And, arguably, François Mitterand found the "Third Way" long before Bill Clinton or Tony Blair.

Calling this a blind spot might be charitable — and not just a little. I mean, per the sentence of Frank's that I bolded, isn't this the stereotypical neoliberal approach? Let us technocrats work out the solutions?

Frank then goes on:
It is not a coincidence that labor’s rise in the 1930s happened at the same time as the One Percent’s fall from grace, nor is it a coincidence that labor’s long decline has been almost a mirror image of the One Percent’s recovery of its nineteenth-century heaven. ...

The disappearing middle class? This is labor’s grievance par excellence. The minimum wage? Labor is always the loudest voice calling for an increase.
Frank admits that re-empowering organized labor is not the totality of the solution, either. He does note that it needs to be more of the solution in union-gutted America than in Europe.

Speaking of, Piketty apparently doesn't know a lot about America in general.

Frank also notes that this lack of knowledge is part of a bigger pattern of potholes in the book:
Unfortunately, Piketty’s enthusiasm for disciplines other than economics is more theoretical than anything else.
And, for someone claiming his book is as much history as economics, his American chocolate cake fell in the oven even more than his French souffle.
Whenever Piketty moves away from numbers and tries to describe life in the United States, things go wrong in a hurry. The worst example first: Piketty tells us that, unlike the French, Americans feel “no nostalgia for the postwar period” because our economy didn’t grow rapidly in those years. ...

Piketty’s command of American political history is, quite simply, abysmal. He announces that the U.S. “never became a colonial power,” which would be news to the people of the Philippines, not to mention the Sioux. ...

There are numerous other examples in Piketty’s enormous book of this weird blind spot concerning all things American; indeed, you could write an entire review just cataloguing them.
Bad, indeed.

At Counterpunch, Jack Rasmus gets at some of those same  union-related issues via a back door of sorts. Here's his key point on this issue:
Explaining inequality—not just reporting it—requires an analysis of how these various ‘forms of wages’ have been reduced in recent decades and especially since 2009. That deeper analysis leads to explanations of trends of destruction of unions and thus the higher union wage, the growing trend of outright ‘wage theft’ by businesses, the avoidance of paying overtime pay by reclassifying millions of workers as ‘exempt’ instead of hourly paid, the atrophying of the real minimum wage, the wage reduction effects of free trade, the shift to contingent labor, and all the reasons why the total unemployed (in and out of the labor force) are rising steadily and are chronically longer term jobless. Add to this the analyses of the many government policies introduced in recent years and decades that reduce the deferred, social, and future wage and underestimate the real wage.
Exactly. And, the noted destruction of unions has been part of the cause of the rest of this. But not all of it.

Compared to much of Europe, and especially Piketty's France, the word "union" has become a four-letter word to more and more vanishing middle-class Americans.

Well, folks that didn't happen out of nowhere. Since there is class war in America, the "unions are ebil" meme came out of the mouths of people who had reason to fear unions. And, it was easily sold. You're not middle class if you're in a union, you're working class. Plus, in traditional industrial unions, people who were promoted from line jobs to management were encouraged to leave unions for that reason. Probably, though I don't know for sure, back in the 1960s and ’70s, white folks promoted from line jobs to management were encouraged to leave their unions for other reasons, but that's another story.

In short, by missing the union part of the equation, Piketty is missing half the class warfare part of the issue.

And the need to re-empower labor, and workers' desire for that, was shown on May 15 by an international fast-food employees' strike. (That said, in details of the strike, I think $15/hr, without a phase-in of seven or so years, is too high. Even then, it might be a bit much. The $10.10 of Beltway rounds, with a four-year phase-in, AND a COLA clause as part of that, sounds about right to me.)

And, given that unionized French farmers have driven their tractors into the streets of Paris before, I can't believe this is totally accidental. So, thanks to Thomas Frank triggering some thought, I doubt I'll read Piketty's book.

1 comment:

Simon said...

Yes I enjoyed Frank's article -enjoy his work in general- one can argue just make the rich and corporations pay their fair share of tax and close close loopholes etc and thing would be fixed.