Capital by Thomas Pinketty, front cover (edited).
What Piketty missed - the ecological limits to growth
18th March 2015
Piketty's 'Capital in the 21st Century' has taken the intellectual world by storm, writes Rupert Read. His analysis of wealth inequality is timely and powerful, but there's one crucial thing he hasn't 'got': that growth must run up against ecological limits - indeed it already has.
Piketty's model demands that economic growth be encouraged indefinitely, as higher growth leads to more equal wealth distributions in society. But the data simply are not adequate to show this.
Thomas Piketty has lifted the lid on the inexorable logic of wealth accumulation in modern capitalist societies. It is striking that the book has made waves in the mainstream media worldwide.
I am delighted that such an improbable happening can occur in our rather-impoverished public sphere, and pleased to cheer him on.
There is much that is commendable about his achievement. It represents an important and formidable body of evidence in arguments for social justice.
As many have long suspected, without massive redistribution of wealth, society is on a path towards ever-deepening polarisation of rich and poor. Piketty has put this in terms even liberal economics has been unable to ignore.
His call for a global wealth tax is a powerful message to our leaders that the game is up: unbridled capitalism cannot be socially progressive in its current form.
But nor, unfortunately, can Piketty's solution.
A spectre is haunting Europe...
Piketty has cast himself as a modern-day Marx, yet the spectre that haunts his work is not communism but growthism.
Piketty's model demands that economic growth be encouraged indefinitely, so that the value thereby generated can be redirected, reversing the trend of wealth concentration in the hands of a few.
The argument is that higher growth leads to more equal wealth distributions in society. But the data simply are not adequate to show this.
For one thing, it is wrong to confuse correlation and cause: it is possible that periods of high growth have gone along with periods of greater democratic reform, and it is the latter that has lead to greater equality rather than growth.
But more importantly, Piketty only has data from growth-dependent economies to work with. It may be that fast-growing capitalist economies are more equal than slow-growing ones, but other innovative economic forms exist that would be more equal than either.
His reliance on growth means that he has been unable to entertain radical approaches such as the steady-state economy.
Consumer capitalism is the system most intimately tied to economic growth, and thus consumer capitalism is the background assumed by Piketty throughout the analysis.
Some more equal than others?
This leads to a very serious omission from his analysis of inequality. The claim that growth generates greater equality can only apply to present-day people.
If economic growth will lead to future generations suffering while we benefit, then it is not egalitarian - providing we count future people among our equals.
I suggest that at a time when it is clearer than ever humanity is running up against the limits to growth (the climate crisis being only the most large-scale symptom), it is delusional and wrong to seek to make an 'egalitarian' argument in favour of growthism.
Piketty's own central thesis - that the rate of growth is unable to keep pace with the rate of return on wealth - itself shows why growthism is systematically anti-egalitarian when it comes to future people.
Constant consumption of planetary resources has been necessary as an alternative to excessive human exploitation. These are are the only two solutions to reducing the cumulative impact of the impossibility of paying returns to money when returns on debt are outstripping returns on capital investment.
We can't keep growing the pie when the ingredients are running out
This means that we are consuming the earth's resources at an unsustainable rate, and filling the atmosphere with greenhouse gases, by-products of the growth imperative.
We are thus robbing future generations twice: once by using more than our fair share of natural resources, and again when we steal from them the very ecosystem that will support their survival.
The conclusion is unavoidable: equality and growth are not compatible. The promise of an ever-growing pie is empty, dangerous, and allows us endlessly to evade what ought to be the central egalitarian question: how shall we share what we have together?
This is what real radicalism looks like!
Facing up to living in a post-growth society is the radical way in which we will achieve Piketty's implicit aims. I submit that recognition of the limits to growth will finally be what forces the majority to take back some of the wealth currently being hoarded by the rich.
Post-growthism is what my colleagues and I at Green House lay out, in our new book on 'The post-growth project: how the end of economic growth could bring a fairer and happier society'.
As well as ending the necessity of constant consumption, a post-growth economy would eliminate the requirement of compound growth of financial property rights. This would allow us to implement the kind of debt-jubilee envisaged by the occupy movement in response to the financial crisis.
A post-growth approach is thus the only viable way of achieving Piketty's underlying vision: that of ending the perennial and ever growing arbitrary power represented by concentrated wealth.
Back to 'businesses as usual'?
So Piketty must be congratulated on two counts: for his tremendous achievement in laying out in its full statistical ignominy the dynamics of modern inequality of wealth, and for his policy-proposal on how to start to fix this.
But there the congratulations must end. Piketty is unfortunately just another economist who shares the 'business as usual' attitude of the OECD, Stern, and practically all other contemporary commentators: that it is wise or even possible to continue seeking economic growth as the answer to our problems.
What is coming, in overcoming growthism, is not just radical: it is nothing short of revolutionary.
For a post-growth society will be one in which it is no longer possible to promise trickle-down economics. In a post-growth economy, the 99% will demand that the wealth be shared much more equally: both now, and with future generations.
The book: 'Capital in the 21st Century' by Thomas Piketty.
Rupert Read is a philosopher of ecology, of economics and of 'the social sciences'. He is Reader in Philosophy in the School of Politics, Philosophy and Languages at the University of East Anglia, and the Chair of Green House. He is also Parliamentary candidate for Cambridge for the Green Party. His recent books include Wittgenstein among the sciences and (with Green House colleagues) The Post-growth project.
An earlier version of some of the material in this piece first appeared in Radical Philosophy.
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