The Moral Statistics of Thomas Picketty

 

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.

America’s Cup is half empty

 
The America’s Cup contest is over. The Billionaire Oracle Team leader Larry Ellison won. The Emirates Airline/Team NZ lost. Here we have a marvellous expression of what is good and bad about capitalism. Capitalism wins. The new technology and design skills which produce big cats that stand out of the water on tiny foils, fuses developments in high tech materials and advanced computer design. It is a leading edge, or more appropriately, foil edge, of what drives technical advances in labour productivity and thus profits. There will be massive spinoffs into industries of all sorts in the same way as technical advances in the military and space travel have given us cyber-technology and drones. While we can admire the new technology and the skill or those using it, we cannot separate the fact that this technology is branded “intellectual property of the US ruling class.”

Yet capitalism also loses. US imperialism is on a downward spiral as its global hegemony is challenged by the rise of China. Its struggle for survival means a massive sucking of resources including intellectual property from the underdeveloped and emerging nations like NZ creating a widening gap between the huge wealth in the hands of a few hundred billionaires at one pole, and the poverty and misery of a growing mass of workers at the other pole. This is because each advance in technology means the expulsion of living labour from the productive economy. High tech increases productivity of labour so fewer workers can produce more commodities in less time. However, because technology is only employed if it makes a profit capitalism faces an insoluble limit. Increasing labour productivity that does produce value cannot compensate for the rising cost of capital invested in plant and technology that does not produce value. Instead of us all sharing in the growing wealth and working less labour time, falling profits leads to stagnation and the destruction of wealth, and the collapse of the Earth’s ecology and survival of humanity.

The fallout from this contradiction is the inevitable decline of capitalism as it expels workers from production, squeezes the middle class down into poverty, and sucks all the wealth into the pockets of the 0.1%. The ruling class can attempt to mask this widening inequality by creating spectacular contests such as the America’s cup, when national pride is at stake. Yet such contests are simulations of trade wars and military standoffs and training grounds to prepare workers in the US camp to prepare for economic and military wars. So “NZ” and the “US” may be rivals in the America’s Cup but they are actually financed by US billionaires and oil sheiks whose main objective is to enlist the poor and oppressed masses in the US imperialist camp in its economic and military struggle against the China/Russia imperialist camp. 

As revolutionaries we say we need to expropriate the obscene wealth of the capitalist ruling class and plan the economy to produce what the masses need and not to increase the profits of the few. We can do that easily as the accumulated technology produced by the collective labour of workers under capitalism can be appropriated to allow us to share in this wealth - “from each according to their ability, to each according to their need”. We can do it by reducing the labour time that is necessary to reproduce our species and all other species and restore the ecological balance to the Earth. The “America’s Cup” that stands for the rise of capitalism from the conquest of the ‘new world’ to its terminal decline in the 21st century, will be replaced by the ‘cup that overfloweth’ held collectively in the hands of humanity.