Picketty’s ideas in their C19th form were demolished by Karl Marx himself. But Picketty couldn’t be bothered reading Marx so he wouldn’t know this. Had he bothered he would have discovered that capitalist inequality is inherent in the fact that the class that owns the means of production forces the other class that is dispossessed of those means of production to produce surplus-value as the basis of profits. The distribution of income that results is a mere symptom of these unequal relations of production.
We will leave Picketty’s data and the conclusions he draws from this date to the criticism of the bourgeois mice (an in- joke reference to the Young Marx – Picketty could start with Early Writings which are much less ‘boring’ than Capital). Anyone can prove that capitalism creates income inequality. The point is whether inequality is good or bad. The only thing that separates Picketty from Ann Rand is not statistics but morality.
Picketty thinks it is bad because the widening income gap is accompanied by increasing profitability. Those bosses are truly bloody minded bastards. Marx had anticipated this mistake because it was common in his day. Marx refers to a fixation on the symptoms rather than causes of inequality as “The Trinity Formula” as in the father, son and Holy Ghost.
This semi-religious fetishism of appearances has its materialist roots in the alienation of human labour as the value of the commodity which is explained in the first part of Capital Vol 1. This is the best rendition of the adage that we know the price of everything but the value of nothing.
Ironically, it was the French translation of Capital that Marx thought the best since he had the chance to edit it and since it was serialised and thus accessible to the ordinary worker (and even the odd bourgeois intellectual). Even so Marx had misgivings that the French reader would be impatient to pass quickly from the difficult analysis to “immediate questions that aroused their passions”.
Picketty has the disadvantage of writing a 600 page book that instead of illuminating the causes of inequality, buries the truth under a false theory. He whips up a moral outrage because the bosses profits rise at the expense of falling wages.
Marxist economist Michael Roberts shows that Picketty measures profits to include ‘wealth’ as in property and housing values. Such ‘wealth’ is not counted in profits as by and large it does not directly contribute to production. Land is a source of rent (or interest on housing assets) which is deducted from wages or profits. But even using Picketty’s measure of wealth to include land, Roberts argues that this has been declining as land becomes less valuable in relation to financial assets, also increasingly unrelated to the production of profits. Perhaps Picketty should have read Marx on ‘fictitious capital’.
So Picketty’s moral statistics leads to rising profits and a falling share of wages where the political solution that presents itself is a moral condemnation of capitalism, combined with a practical push for the poor to rise up and demand their ‘fair share’ of income, even though their production of profits was never fair.
In Aotearoa/New Zealand a strong advocate for a redistribution of wealth is Gareth Morgan, a maverick entrepreneur capitalist. His method is a Universal Basic Income (UBI) paid for by what is effectively a new 25% flat tax on wealth including assets and income. See his book TheBig Kahuna.
However writing an academic text of 600 pages over a number of years means Picketty doesn't have the excuse of passion which leads him to condemn Capitalism or French impatience like the German moral socialists that Marx excoriated in the Critique of the Gotha Program for forgetting that capitalism leads to falling profits and that any equalising of income requires a socialist revolution. His language is bourgeois morality and statistics.
So like all those who think that climate catastrophe can be managed by the ‘adaptation’ of capitalism, Picketty may “throw statistics" at capitalism but doesn’t entertain the idea of overthrowing it.