American reaction to Thomas Piketty’s book, Capital in the Twenty-First Century, expresses the nature of modern economics and Americans’ intuitive sense of injustice
I first read Piketty’s work, co-authored with Emmanuel Saez, some years ago in graduate school. At the time I mistook it for the work of sociologists, because of its concern with historical processes and inequality, which no one I knew associated with mainstream economics. This raises a question: the reality of dramatically rising inequality in the US, linked with the rise of shareholder value and financialisation, is for some an old story. But until recently no one was listening. Why are they listening now?
A first reason, of course, is that Piketty’s book came out in English just as campaigns for the US 2014 mid-term elections are gearing up, and the Democratic/Obama intelligentsia has been working for some time on formulating inequality as a central electoral theme. In other words, the American public is ‘primed’ on the topic. That is the most obvious, proximate reason. But there is a lot more going on.
Since the late New Deal, economists have been uniquely important players within the Democratic intelligentsia. There are plenty of influential economists in the Republican camp, but this was not really true until the late 1960s. So, despite some tendencies to associate economics with neoliberalism, and neoliberalism with the political right, the historical story is very different.
Another factor is that the Democratic intelligentsia became more closely engaged with left and progressive circles in Western Europe during the ‘Third Way’/Clinton-Blair period. These ties remain alive and well. I would guess that Piketty’s argument, because Piketty is a left-connected economist (my understanding is that he is linked with the French Socialist Party), was probably well-known to economists, journalists, and Democratic strategists in the US long before the book came out.
And there is yet a third reason: the book is by an economist, as opposed to any other kind of intellectual. Would anyone in the US listen had a French lawyer, sociologist, or literary scholar (setting aside whether it’s conceivable that French academics in these fields would produce such a book) written the very same book? It is especially interesting that being an economist, at least in Piketty’s case, is trumping long-standing prejudices in American public debates against the importation of anything European, and certainly anything French.
In contrast, Piketty’s membership of the dismal science does not seem to be trumping his Frenchness in Britain. Consider, for instance, the Economist’s coverage, which is notable for a lot of things (including a willingness to assert as fact the erroneous opinion that Piketty’s book-title is a ‘deliberate allusion’ to Marx’s Das Kapital), but one of them is a merry deployment of negative stereotypes of French intellectuals as smug and superior. I am sure these stereotypes are being mobilised in American debates too, but so far it is not dampening the book’s profile.
Coming back to the US: there are good reasons to think that the book’s splash would not have been possible twenty years ago, and not only because inequality was not on the political agenda. Since that time economics has become a ‘global profession’ (see Fourcade on this) and, as such, it wields unusual authority in policy debates in many parts of the world. We tend to think that this was true in Keynes’ time too, but Keynes actually had to work very hard to make his academic arguments heard (consider, for instance, his failure to alter the ‘Treasury view’ in the 1930s). To build his policy influence, Keynes first helped to make British economics an established academic profession.
Piketty faces no such obstacles – for him modern professional economics is ready-made, and its influences are far-reaching. And so the simple fact of being a prominent economist nowadays can overwhelm characteristics that might otherwise damage a person’s credibility in American policy debates – like nationality, or political connections. And, possibly, economists have the potential to wield more authority in the US than elsewhere, since modern economics is at once an international and a US-centric profession.
Because it is global and influential, contention within the economics profession also matters in a way that other professional controversies do not. Economics’ internal struggles have been noticeable since the late 1980s, when economists started worrying that the discipline was becoming too abstract, that it was teaching students badly, and that it was making itself irrelevant by concerning itself more with mathematical formalism than meaningful analysis of real-world things.
Judging from the emergence of venues like vox.eu and its brethren (see, for instance, this essay by Diane Coyle) and the Institute for New Economic Thinking (INET), economics’ internal controversies have deepened since the financial crisis. It is probably a safe bet that Piketty’s work taps right into these controversies – and, to go back to an earlier point, what’s controversial for economists often gets treated as controversial in public debates.
And then there is the incredible polarisation of American politics these days – not in the general public, but among partisan activists. Drop a controversial argument into a consensual political setting, and it probably will not get any traction. But drop it into a political setting in which activist networks are highly polarised, well-resourced (consider the truly depressing role of money in American politics nowadays) and easily mobilised, and it is more likely to set something off.
Last but not least, there is the fact that inequality has special significance in American political culture. Societies that take inequality for granted are not surprised when presented with evidence of inequality’s existence. But societies that believe that they are the living epitome of egalitarianism are indignant. Many Americans, regardless of their politics, have a broad sense of injustice right now (and, by all indications, this sense is correct) – they just explain it in different ways.
The main point is that the Piketty book’s popularity does not reflect idiosyncratic, momentary fashions. It reflects, first, the structure and state of American politics: its electoral cycles, its curious polarisation-yet-apoliticism, and the ongoing aftermath of the financial crisis. It also reflects the interdependent link between ‘common sense’ and structural realities: that is, Americans’ correct sense that there are forces larger than them hindering their ability to ‘make it’ in what is supposed to be the land of opportunity. And, third, it reflects the state of modern economics, including its internationality, power and prestige; its historical position in American politics; and the book’s situation vis-à-vis internal professional controversies.