September 07, 2014

Thomas Piketty: Allergic to the word "union"

I had read others' reviews of Piketty's "Capital in the Twenty-First Century," and so I knew in advance that he had ignored the possible work of unions in trying to reverse the increase in income inequality in the last 40 years. Indeed, based on those other reviews, especially one by Thomas Frank, I had previously blogged about this issue.

And, now, having gotten a copy of the book from the nearest larger-sized library, I can see that in person.

Basically, it's because he ignores the past role of unions in reducing income inequality.

Piketty could have mentioned the word "union" as early in the book as page 9.

At the bottom of that page, he says:
In the last third of the nineteenth century, wages finally began to increase: the improvement in the purchasing power of workers spread everywhere.
And continuing in that same paragraph, on page 10:
Like his predecessors, Marx totally neglected the possibility of durable technological processes and steadily increasing productivity, which is a force that can to some extent serve as a counterweight to the process of accumulation and concentration of private capital.
Gee, wouldn't that be a good place to discuss the role of unions?


Instead, we're told that technocracy plus good old macroeconomics of productivity explains all.

But, we're not told WHY the owners of the means of production, to go back to the original "Capital," would share that increasing productivity's monetary benefits.

Gee, wouldn't that be a good place to discuss the role of unions?


It gets worse. I jumped ahead, after the Introduction in which that all appeared, and the word "union" did not, to Chapter 9, in Part Two, which is about "The Structure of Inequality."

Its title? "Inequality of Labor Income."

Gee, wouldn't that be a good place to discuss the role of unions?


I saw the word "union" mentioned once in the entire chapter.

So, I skipped ahead to Part Four: "Regulating Capital in the Twenty-First Century."

Chapter 13 is "A Social State for the 21st Century."

Gee, wouldn't that be a good place to discuss the role of unions? Wouldn't it be a good place to discuss the possibility of established unions trying to revitalize themselves by looking to do more organizing work in white- and gray-collar occupations?


In fact, the U-word is again not mentioned in this chapter.

It's worse at the very end, in the index.

The word "union" has no entry.


Beyond that, Piketty also ignores the third leg of the traditional "land, labor, capital" stool.

In the introduction, he briefly talks about how David Ricardo looked at the price of land, as a parallel to Thomas Malthus' overpopulation, as something that might produce a scarcity with economic effects. He notes that Ricardo was talking about farmland, and Piketty says the idea could apply to urban real estate today.

And then stops there.

When there's so much relevance of that to today.

Can the Green Revolution of the 1970s be sustained, or brought to a new level? Even for those of us who don't fear GMOs, but at the same time, like Norman Borlaug said the Green Revolution was just a one-generation fix, and reject the ideas that GMOs are the "cavalry riding over the hilll," or as I call it, an example of "salvific technologism," there's worries here.

And, things like Peak Oil or other diminishing mineral reserves could also be discussed in depth under the "land" leg of the stool.

But Piketty doesn't.

So, this is essentially a left-neoliberal technocrat writing a very incomplete book about how to fix the economy of the 21st century. And, one who's doing a cheap ripoff of Marx, and in his own way, arguably no more scientific than Marx.

So, true liberal friends, beyond my original blog post, I've now read enough of this book that you don't have to.

Plus, he's not that good of an economist in some of his theorizing. Indeed, that link explains exactly why he doesn't mention unions hardly at all:

Let me return to Piketty’s theoretical paradigm (the “neo-classical” paradigm). According to this theoretical paradigm all persistent unemployment must be explained as the result of wages being “too high”, i.e. as the product of trade union action. It is not accidental that Robert Solow whose “neo-classical” growth model Piketty invokes is a votary of “labour market flexibility”, which means in effect smashing trade unions through “free hire and fire”. Smashing trade unions on the plea that this would raise employment is currently on the agenda of corporate capital everywhere in the world including India. It is a pity that Piketty, despite his concern with wealth inequality, adopts a theory that provides sustenance to this corporate agenda.

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