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THE OPINION PAGES | OP-ED COLUMNIST | NYT NOW
The Piketty Panic
APRIL 24, 2014
Paul Krugman
Capital in the Twenty-First Century, the new book by the French
economist Thomas Piketty, is a bona fide phenomenon. Other books on
economics have been best sellers, but Mr. Pikettys contribution is serious,
discourse-changing scholarship in a way most best sellers arent. And
conservatives are terrified. Thus James Pethokoukis of the American
Enterprise Institute warns in National Review that Mr. Pikettys work must
be refuted, because otherwise it will spread among the clerisy and
reshape the political economic landscape on which all future policy battles
will be waged.
Well, good luck with that. The really striking thing about the debate
so far is that the right seems unable to mount any kind of substantive
counterattack to Mr. Pikettys thesis. Instead, the response has been all
about name-calling in particular, claims that Mr. Piketty is a Marxist,
and so is anyone who considers inequality of income and wealth an
important issue.
Ill come back to the name-calling in a moment. First, lets talk about
why Capital is having such an impact.
Mr. Piketty is hardly the first economist to point out that we are
experiencing a sharp rise in inequality, or even to emphasize the contrast
between slow income growth for most of the population and soaring
incomes at the top. Its true that Mr. Piketty and his colleagues have added
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a great deal of historical depth to our knowledge, demonstrating that we
really are living in a new Gilded Age. But weve known that for a while.
No, whats really new about Capital is the way it demolishes that
most cherished of conservative myths, the insistence that were living in a
meritocracy in which great wealth is earned and deserved.
For the past couple of decades, the conservative response to attempts
to make soaring incomes at the top into a political issue has involved two
lines of defense: first, denial that the rich are actually doing as well and the
rest as badly as they are, but when denial fails, claims that those soaring
incomes at the top are a justified reward for services rendered. Dont call
them the 1 percent, or the wealthy; call them job creators.
But how do you make that defense if the rich derive much of their
income not from the work they do but from the assets they own? And what
if great wealth comes increasingly not from enterprise but from
inheritance?
What Mr. Piketty shows is that these are not idle questions. Western
societies before World War I were indeed dominated by an oligarchy of
inherited wealth and his book makes a compelling case that were well
on our way back toward that state.
So whats a conservative, fearing that this diagnosis might be used to
justify higher taxes on the wealthy, to do? He could try to refute Mr.
Piketty in a substantive way, but, so far, Ive seen no sign of that
happening. Instead, as I said, it has been all about name-calling.
I guess this shouldnt be surprising. Ive been involved in debates over
inequality for more than two decades, and have yet to see conservative
experts manage to dispute the numbers without tripping over their own
intellectual shoelaces. Why, its almost as if the facts are fundamentally
not on their side. At the same time, red-baiting anyone who questions any
aspect of free-market dogma has been standard right-wing operating
procedure ever since the likes of William F. Buckley tried to block the
teaching of Keynesian economics, not by showing that it was wrong, but by
denouncing it as collectivist.
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Still, it has been amazing to watch conservatives, one after another,
denounce Mr. Piketty as a Marxist. Even Mr. Pethokoukis, who is more
sophisticated than the rest, calls Capital a work of soft Marxism, which
only makes sense if the mere mention of unequal wealth makes you a
Marxist. (And maybe thats how they see it: recently former Senator Rick
Santorum denounced the term middle class as Marxism talk, because,
you see, we dont have classes in America.)
And The Wall Street Journals review, predictably, goes the whole
distance, somehow segueing from Mr. Pikettys call for progressive
taxation as a way to limit the concentration of wealth a remedy as
American as apple pie, once advocated not just by leading economists but
by mainstream politicians, up to and including Teddy Roosevelt to the
evils of Stalinism. Is that really the best The Journal can do? The answer,
apparently, is yes.
Now, the fact that apologists for Americas oligarchs are evidently at a
loss for coherent arguments doesnt mean that they are on the run
politically. Money still talks indeed, thanks in part to the Roberts court,
it talks louder than ever. Still, ideas matter too, shaping both how we talk
about society and, eventually, what we do. And the Piketty panic shows
that the right has run out of ideas.
A version of this op-ed appears in print on April 25, 2014, on page A25 of the New York edition with
the headline: The Piketty Panic.
2014 The New York Times Company