All right. What is to be done, in light of the analysis I cobbled together from Piketty and others?
The central message of Piketty et al. is that capitalism is essentially a system for pumping profit, a.k.a. surplus value, out of the efforts of laborers and into the pockets of capitalists. Piketty’s summary expression of this truth is the simple inequality r>g. Taking into account everything, including depreciation, the rate of profit is greater than the rate of growth, resulting in ever greater inequality.
What can be done about this? There are really only two answers. Either get a new system, one in which capital is not privately owned, or else generate sufficient political support for an array of pre-tax and post-tax transfers from capitalists to laborers that will ameliorate the steepness of the inequality pyramid. In short, socialism or the New Deal [speaking now of America.]
Maybe it is just that I am four days away from my eighty-fifth birthday, and hence do not put much faith in full-scale revolutionary change, but socialism does not seem to me to be just over the horizon. Which leaves substantial pre- and post-tax transfers.
Now mind you, there already are in the advanced capitalist countries substantial transfers, a fact that Piketty, Saez, and Zucman document for the United States. But the proportional magnitude of those transfers has dramatically declined, and they are now constructed so as to benefit primarily the middle 50-90% and the elderly among the Bottom Half [Medicare and Social Security.]
A dramatic revision and ramping up of such transfer programs would be an unambiguously good thing, in my opinion. But it would simply slow, not reverse, the increasing inequality. What is more, as Piketty made clear in his book, with the passage of time, a larger and larger share of the accumulated wealth is inherited rather than “earned” [if you will forgive the term]. In short, we are well on the way to full-scale patrimonial capitalism. [Think of the piles of wealth that will be inherited by the young Bezos’s, Zuckerbergs, and Gates’s, and the piles already inherited by the Waltons.]
I am one hundred percent in favor of increased transfers. Every dime that the minimum wage is raised puts $200 a year in the pockets of the poor. A guaranteed national minimum income would also be an enormous advance toward social survival, if not social justice. These are things worth fighting for.
But they do not change the underlying reality. They soften it, but they do no change it.
I do not see collective ownership of the means of production growing within the womb of capitalism, not even in China, which pays lip service to Marx and not much else.
As I prepare myself for turning eighty-five [why does this seem so much more consequential than turning eighty-four?], this is the best I can offer.
Thin gruel at Yuletide, for sure.