DEATH AND/OR TAXES

Dick Pountain /The Political Quarterly/ 22 Jul 2022 11:12

The Quiet Before: On the Unexpected Origins of Radical Ideas, by Gal Beckerman; Bantam Press Feb 2022, pp352, £9.34

A Brief History Of Equality, by Thomas Piketty; Belknap Press April 2022, pp272, £16.9


When I first sat down to write this review the runners and riders had just been announced for the race within the UK Conservative Party to find a replacement for disgraced PM Boris Johnson. Out of 11 starters, 10 immediately declared their intention to reduce taxes and shrink the size of the British state, despite advice from the whole economic profession that doing so would worsen inflation and inequality. After a week the process spat out two final contenders: foreign secretary Liz Truss and the recently-ex chancellor, Rishi Sunak (whose resignation undid Johnson). Sunak had orchestrated three years of pragmatic, Keynesian emergency measures to save the British economy from Covid-19 pandemic lockdowns – measures that included cash loans to firms and a furlough scheme to help them avoid laying off employees. This needed massive government borrowing and contributed to inflation approaching 9% and a ‘cost-of-living crisis’ that the popular financial journalist Martin Lewis has warned will lead to rioting in the streets. Liz Truss berated Sunak for not promising immediate tax cuts, and since these are the catnip the Tory flock demands to vote for a winner, he had to promise some too, albeit slightly later. As we all now know, Truss won.

This depressing tax-cutting obsession among the contenders is merely the latest manifestation of the fact that neoliberalism retains a solid hold, indeed a Gramscian hegemony, over politics in most of the world, despite the massive shocks of the 2008 financial crash and a Covid pandemic that might have been expected to improve the fortunes of the Left, or at least generate some doubt about the wisdom of allowing markets to rule everything. The two books reviewed here address two different aspects of this toxic political/economic landscape.

Gal Beckerman, senior books editor at The Atlantic magazine and formerly of the New York Times, wrote The Quiet Before about the factors that have sometimes brought people out to riot in the streets throughout modern history, and about why they almost always fail in their objectives. Thomas Piketty’s latest, A Brief History Of Equality, is the work I was hoping for when I reviewed his previous book, Time For Socialism, in this journal last year. It contains a concise distillation of the findings of his two great research projects Capital In The 20th Century and Capital And Ideology, applied to political economy rather than statistical economics. It contains little new material, though it does have a penetrating analysis of the nature of Chinese ‘socialism’: its intention rather is to reach readers who would be deterred by his previous huge tomes, and among them, with luck, might be those political activists whose lack of any credible economic program is the implicit subject of Beckerman’s book.

Beckerman’s book recounts, in an engaging narrative style, 10 historic events that occurred between the 17th and 21st centuries, in places from Aix-en-Provence to Minneapolis. Not all are riots or demonstrations though several are, but all of them do involve radical and oppositional ideas, and each illustrates the effect of some recent innovation in the means of communication that made them possible. The first describes how a Provençal scholar called Nicolas-Claude Fabri de Peiresc in 1635 organised a group of volunteers from all over Europe, North Africa and even Canada, to jointly observe an eclipse of the sun so that he could measure longitude, and he used letters to communicate his detailed instructions to them all.

The second concerns a three-mile-long, million-signature petition delivered to Parliament by British Chartists in 1839, largely organised through the pages of Feargus O’Connor’s Northern Star newspaper. The third (my favourite) describes the attendance of Mina Loy at a Futurist manifestation in Florence in 1913; the fourth recounts the career of Nnamdi Azikiwe (popularly known as ‘Zik’) who rose from editor of The African Morning Post newspaper in The Gold Coast to be the first president of an independent Ghana. Later chapters cover events and media from Roneo-copied fanzines and samizdat novels to emails and WhatsApp videos, US vaccine information during Covid to neo-Nazis in Charlottesville and BLM riots in Minneapolis. Each chapter is written like a short story in readable and gripping prose, so that several are as moving as they are informative.

Particularly so is Chapter 7 on the Arab Spring and occupation of Tahrir Square in Cairo, an early example of mass mobilisation via the internet. The tragic failure of this movement crystallises a thought that permeates most of his later chapters, namely that the people so mobilised and their leaders (when they had any) were woefully lacking in any programme for what success would entail, any coherent plan for changing laws and institutions. This is in stark contrast to those Chartists of Chapter 2 who clearly aimed at gaining the vote and won it after repeated arduous struggles.

Among the user reviews of Thomas Piketty’s new book, A Brief History of Equality on Amazon you’ll find quite a few hostile critics saying it contains nothing new, which isn’t true but in any case misses the point that in it Piketty presents his complex suggestions for achieving participatory socialism in a compact fashion more likely to be widely read – had it been compulsory to read all four volumes of Das Kapital there would have been no Russian Revolution.

Piketty rehearses again the facts, that economic inequality has declined overall since the middle ages, did so fastest between the 20th century’s two world wars, and is now rising again thanks to neoliberal reaction against post-WW2 social-democratic reforms. He explains more accessibly his proposed raft of solutions, which include restoring steeply progressive taxes on income, wealth and carbon emissions; redistribution of wealth and ownership in addition to income through worker share holdings, universal benefits and capital endowments, and time-expiring shareholdings designed to obstruct the emergence of dynastic ownership through inheritance. A Brief History does also contain new matter to deepen his accounts of gender politics, racism and colonialism, which goes so far as to recommend payment of a permanent ‘reparation share’ from the developed North to the South in place of international aid. This expands considerably on his conviction that the worst failure of Western social democracy was its lack of international reach, its lack of weapons for taming global capital like a worldwide financial register to regulate capital flight, tax-havens and outsourcing.

Perhaps the most interesting addition is Chapter 10's section on ‘Chinese Socialism: The Weak Points of a Perfect Digital Dictatorship’, in which Piketty analyses the nature of the Chinese regime – a crucial political question as it concerns Taiwan, support for Putin’s war in Ukraine, trade relations with the USA and much more. As expected he supports his opinion with statistics about ownership patterns:

“Barring an unexpected collapse, over the coming decades the People’s Republic of China is likely to become the greatest economic power on the planet, even if no one can predict how soon and for how long ...[ ]... The share of public capital (all levels of governments and collectivities taken together) was about 70 percent in China in 1978, at the time when reforms were begun. It declined sharply during the years 1980–1990 and until the middle of the 2000s, and has been stable at around 30 percent of the national capital since then ...[ ]... If the Western powers persist in an outdated hypercapitalist ideology, it is not at all certain that they will succeed in limiting the growing influence of the Chinese regime”.

China’s authoritarianism is anathema to his own desired participatory democratic socialism, but it might bestow the ability to enforce counter-measures to the climate crisis that democracy will prevent the West from achieving.

I suggested earlier that these two books between them offer hints as to why the Left is languishing rather than flourishing since the 2008 crisis, which demands some further explanation. Piketty offered these terse explanations in Capital And Ideology, namely that “a dis­illusionment, a pervasive doubt about the very possibility of a just economy, which encourages identitarian disengagement” followed from the collapse of the Soviet Union, and that “the less educationally advantaged classes came to believe that the parties of the Left now favour the newly advantaged educated classes and their children over people of more modest backgrounds”. Both of these observations suggest that Marxist ideas of class and class-struggle no longer retain much political traction among Western working populations, who were relatively happy with the compromises won by social-democracy after WWII and whose anger at having them removed by neoliberalist reaction is easily deflected onto immigrants and college-educated Leftists who tell them off for not struggling hard enough.

The legacy of Marxism to Western leftists, faint as it is, has been mostly a hindrance: a vote-losing moralism and a contempt for social-democracy as a partial solution that falls short of full state socialism. This situation has generated an important debate among contemporary Marxists about the precise nature of late, technological capitalist states and their huge increase in inequality: are capitalists losing faith in investment and innovation altogether and becoming pure rentiers; have they become less reliant upon extracting surplus value through the wage mechanism and now expropriate value directly (for example when Google and Facebook ‘steal’ users’ data for free); is colonialism really over or does it persist in disguised forms?

A few, Piketty included, synthesise these doubts into a more realistic picture which abandons dogmatic adherence to Marx. From its inception during the Renaissance and Industrial Revolution, ‘capitalism’ has never been purely dependent on surplus value extraction but has always plundered too – South American silver and gold, slavery, unpaid housework, cheap eastern labour – and reinvested the proceeds into ‘pure’ European capitalist production. Jason Moore, another unorthodox critic puts it thus: “capitalism thrives when islands of commodity production and exchange can appropriate oceans of potentially Cheap Natures – outside the circuit of capital but essential to its operation.” In A Brief History Piketty moves further in this direction, extending his earliest concerns of property, borders and education into greater emphasis on gender politics, racial and colonial matters, as well as by frankly describing his recommendations as both democratic and participatory socialism.

A largely technophobic Left is prone to exaggerating the malignancy of the giant US tech corporations. Their global communications system of unprecedented power is currently being abused for surveillance, high-speed speculation, tax evasion and the operation of 'gig' companies like Uber and AirBnB to undermine regulation and organised labour. However it could with sufficient political will be made to serve progress, as several of Beckerman’s stories suggest and as Piketty acknowledges in a closing section called ‘Will Money Creation Save Us?’ Experience of the Covid pandemic has shown what can be achieved by printing money, and if that causes inflation then the proper cure is not austerity but more robust collection of corporate taxes: “In theory, nothing forbids us to go further. Today, no currency is defined in relationship to gold or to a material referent: currency is above all an electronic sign on computers, which the central banks can create without limits. There are even plans to set up central bank digital currencies in the near future. Individuals would have digital accounts at their country’s central bank, which would permit banks to directly credit individuals’ accounts, rather than routing through private banks and enterprises…”

What a fine irony if Engels’ ‘withering away of the state’ were to be finally achieved by the banks working together with severely-chastened tech giants like Amazon, Google, Facebook. Piketty concludes that “Economic questions are too important to be left to others. Citizens’ reappropriation of this knowledge is an essential stage in the battle for equality. If this book has given readers new weapons for this battle, my goal will have been fully realized” – to which I would merely add that reading Gal Beckerman's book as well will prepare them better for the travails they face before achieving it.

BEYOND HYPERCAPITAL

Book review: ‘Time For Socialism: Dispatches from a World on Fire, 2016-2021’ by Thomas Piketty. Yale University Press 2021, 346pp

To begin this review it would be hard to improve upon Thomas Piketty’s own opening:

“If someone had told me in 1990 that I would publish a collection of articles in 2020 entitled Vivement le socialisme! in French, I would have thought it was a bad joke. As an 18-year-old, I had just spent the autumn of 1989 listening to the collapse of the communist dictatorships and ‘real socialism’ in Eastern Europe on the radio.”

Piketty became famous for his huge, painstaking volumes of economic and ideological history which explore the trajectory of inequality through the ages in great statistical detail. Though these works do clearly favour decreasing inequality, he made few explicitly polemical political statements in them. The final section of ‘Capital and Ideology’ (reviewed here in vol 91/4) did sketch a package of radical fiscal and institutional reforms that he believed would reduce global inequality, but it appears the sheer rapidity and intensity of the crises in global industrial civilisation has stimulated him into a more public declaration. The confluence of potentially terminal climate change, Covid pandemic, populist retreat into nationalism and war, energy shortage and supply chain collapse leads him to espouse a by-no-means easy or fashionable cause :

“Born in 1971, I belong to a generation that did not have time to be tempted by communism, and which became adult when the absolute failure of sovietism was already obvious. Like many, I was more liberal than socialist in the 1990s, as proud as a peacock of my judicious observations, and suspicious of my elders and all those who were nostalgic. I could not stand those who obstinately refused to see that the market economy and private property were part of the solution. But now, thirty years later, in 2020, hypercapitalism has gone much too far, and I am now convinced that we need to think about a new way of going beyond capitalism, a new form of socialism, participative and decentralized, federal and democratic, ecological, multiracial, and feminist.”

These multiple problems facing the world are overlaid and interwoven in ways that make analysis extremely challenging, only possible by clearly identifying the most significant factors, and there Piketty shares the choice of his countryman Tocqueville who believed that “there is almost no issue of public interest which does not derive from taxes or end up with taxes.”

This puts him at odds with orthodox Marxists who see the possession of capital and exploitation of labour as the primary evils, and insurrectionary expropriation as the cure.
Abandoning his earlier liberalism in favour of ‘participatory socialism’ means that Piketty proposes we struggle not for one class to own the state, but rather to defend sufficient legitimacy in a social-democratic state, against both right-libertarian attempts to demolish it and authoritarian-populist attempts to turn it into instrument of surveillance and coercion, so that it retains the ability to redistribute income, wealth and property through progressive taxation, education, global fiscal transparency and enforcement. Historically-speaking this ambition aligns him more closely with the gradualist socialism of Marx and Engel’s contemporary Eduard Bernstein than with those Leninist and Trotskyist strands that still exert such influence on the contemporary Left, and have so made ‘centrist’ into a dirty word.

Bernstein observed that “democracy is a condition of socialism to a much greater degree than is usually assumed, i.e. it is not only the means but also the substance” while Piketty adds to this that “history shows that inequality is essentially ideological and political, not economic or technological”. Inequality can potentially be eradicated by changing people’s minds, and Piketty has already demonstrated that following five centuries of extraordinary inequality due to ownership by kings and aristocrats (and barely altered by the French Revolution), the 20th century saw it halved by precisely such means. Inequality is currently on the rise again – a counter-reformation wrought by neoliberal corruption of the programmes of ‘centrist’ parties – but it remains low in historical terms.

Piketty is not a naïve centrist and doesn’t imagine that eradication of inequality can be accomplished without extraordinary resistance from the billionaires and corporations who stand to lose, and who have vast financial, ideological and coercive powers at their disposal. He’s not a politician, nor even a political scientist, and hence confines himself to painting a picture of the institutions and tax regimes that would need be put in place to achieve a just, global, participatory socialist economy: the political programmes and organisations required to get there remain beyond his purview (and indeed perhaps beyond anyone’s right now) but a well-thought-out picture of the ultimate goal is a big step toward initiating the necessary debates and struggles.

Most of the content of ‘Time For Socialism’ is a collection of 58 of Piketty’s monthly columns for the French newspaper Le Monde between 2016 and 2021, few longer than four pages. It begins with a strong 26-page introduction which explains his principal ideas about taxation, redistribution and internationalism, followed by 13 columns about coping with globalisation, some of which dispel myths about the relative productivity of various nations, the Chinese phenomenon and Basic Income versus Fair Wages. The next 20 focus on specifically French reforms, with an excoriating denunciation of Macron’s scrapping of their successful Wealth Tax, and a harsh critique of the Parcoursup education reform (which that tax would have better financed). A further 21 concern reform of the EU, with an emphasis on democratising it by greater involvement of national parliaments and the removal of the unanimity rule that stymies most progressive reforms. The final four columns arrive at January 2021 and cover European Left unity, Covid-19 debt, the perilous state of US democracy after the Capitol invasion, and two extraordinary maps of world inequality that reveal its highs and lows everywhere. As you might expect from previous Piketty works, almost every column features a graph, not all of which appeared in the Le Monde originals, some being imported from his research papers. I must warn any graphophobes that many of these contain quite challenging amounts of data.

These essays emphasise the daunting task progressives face in resisting and taming what Piketty describes as ‘hypercapitalism’. The principal weapons deployed by the neoliberal counter-reformation have been fiscal opacity (hiding assets in offshore tax havens), fiscal dumping (encouragement of a ‘race-to-the bottom’ in low taxation that deprives competing nation-states of revenue), outsourcing and social dumping (exporting manufacture to low-pay countries and/or importing low-paid workers to undermine trade unions and pay rates). In ‘Capital and Ideology’ Piketty claimed that the decline of post-WWII social democracies has largely seen caused by the failure of national parties to build sufficiently powerful international links and institutions: in this book he expands that diagnosis to claim that tackling the looming climate crisis and disarming those potent neoliberal weapons will require a unified, internationalist solution – increased tax revenues permit more investment in decarbonisation and job creation. One might describe such efforts as ‘hyperkeynesism’ though I’m not sure he would like that:

“...no valid environmental policy can be carried out if it is not part of a global socialist project based on the reduction of inequalities, the permanent circulation of power and property, and the redefinition of economic indicators.”

In essence this requires the restoration of steeply progressive taxes on the revenues of corporations and the wealth of billionaires, instituting a global register of assets to provide transparency, and a network of treaties imposing global standards of minimum wages and taxes. Piketty is aware that neither world government nor a world tax inspector are either desirable or possible, and that demanding unanimity creates a serious obstacle to major reform (think of the UN veto here). Instead we have to devise structures within which nation states can reform at their own pace while being incentivised to co-operate, a situation he labels ‘social-federalism’ as opposed to the ‘national-liberalism’ exemplified by Brexit:

“The nationalists attack the free circulation of people: social-federalism must deal with the circulation of capital and the fiscal impunity of the wealthiest”

So is this book a good introduction to Piketty’s ideas for readers who lack the time (or courage) to tackle the great tomes? Better for Le Monde readers perhaps, as non-specialist English readers may find the section on French policy obscure, but his introduction and the later essays do constitute a fair summary.

An obvious, easy, and not very useful criticism is that should democracy itself fail, which is less unthinkable than it was a decade ago, then all bets would be off (and discussion of precisely what forms of tyranny might ensue is fodder for internet trolls rather than this esteemed journal). A different point interests me, namely his brave choice of the term ‘socialism’ which he himself clearly feels to be a radical step. France, along with many other countries, already has a Socialist Party whose reputation has suffered badly in recent decades – and it’s quite impossible to imagine any party with ‘socialist’ in its name ever being elected in the USA.

It’s very hard to think of satisfactory alternatives though, and Piketty habitually prefixes the term with ‘participatory’ for the serious reason that his proposals are not fully-formed policies
but meant to spur extensive debate and argument. I’ll therefore leave the last word to him too:

“History will decide whether the word ‘socialism’ is definitively dead and must be replaced. For my part, I think that it can be saved, and even that it remains the most appropriate term to describe the idea of an alternative economic system to capitalism. In any case, one cannot just be ‘against’ capitalism or neoliberalism: one must also and above all be ‘for’ something else, which requires precisely designating the ideal economic system that one wishes to set up, the just society that one has in mind, whatever name one finally decides to give it.”

 

Dick Pountain/ Political Quarterly/ 31 Oct 2021