You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

The Conservative Case Against Piketty Is Shockingly Weak

YouTube/Winning Our Future

Last week, when Thomas Piketty's book Capital in the 21st Century was racing to the top of The New York Times' bestseller list, I set out to read the conservative criticisms of the economist behind the year's most unlikely bestseller. The book's sales had been lifted by a surging interest in the causes of and solutions to economic inequality. The right seemed increasingly desperate to undermine or distract from his argument.

I was perusing substantive critiques. But secretly, I was hoping I'd happen upon an article by a conservative economist who wouldn't bury the lede, and just come right out and say it—that if capitalism inevitably begets massive accumulations of wealth and growing inequality, and if reversing or slowing the growth of inequality requires transferring more wealth than we already do, then we should just teach the less fortunate how not to be so envious of the super wealthy.

So I was relieved when the following landed in my inbox on Saturday.

That's a position I personally find unsavory, but at least it cuts to the chase.

By contrast, other conservative Piketty critics—particularly the most thorough and substantive—eschew Jones' bluntness, but ultimately must rely on fallacies and evasiveness in order to do so. Conservatives don't like Piketty's policy remedy, and other far-reaching proposals to reduce or curb the growth of inequality. That's in part because they don't agree with his normative premise that massive wealth concentration is undemocratic. But unlike Garett Jones, they lack the courage of their convictions. So instead they're packaging quibbles with his methods and arguments as refutations, while allowing omission and circular reasoning to do all the refuting. 

At this point I'm obliged to issue a familiar disclosure. I am still reading (i.e., have not finished) Capital, have bounced around between sections, and have no formal economic training. But the argument I'm making is about quality of rhetoric, rather than of Piketty's work, or his economic prescriptions, and what I've found is that the most nuanced conservative criticisms eventually run aground on the shoals of one logical failure or another.

To illustrate, I'd point you to two particularly thorough conservative responses to Piketty: One by Tyler Cowen, and another (a first entry) by Scott Winship. Cowen's essay in particular continues to serve me very well as a lucid and rigorous check against the inclination to treat Capital as the first and final word on every issue contained in its pages—until we get to the penultimate paragraph.

"The simple fact is that large wealth taxes do not mesh well with the norms and practices required by a successful and prosperous capitalist democracy," he writes.

I don't know if there's a single term for describing the act of using a straw man in service of begging the question, but that's what Cowen's doing here.

Piketty famously concludes that the best way to address (or perhaps stave off) the problems associated with growing inequality is with a politically untenable global wealth tax. Cowen doesn't like that idea. He also makes the plausible, though contested claim that Piketty's proposal is actually unworkable. And to his credit, in his next paragraph he sketches out a few much more modest proposals for slowing the accumulation of wealth, and giving the non-wealthy easier access to it. (It is notable that conservatives only entertain the idea of taxing wealthy people and distributing the money down to the poor and middle class in the context of negotiating backward from radical proposals to reduce inequality. So we can at least thank Piketty for shifting the Overton window.) But his are pretty feeble prescriptions, and their feebleness stems from his earlier observation that some idle rich do good things with their money, and we should thus tolerate, if not celebrate, the rise of a multi-generational rentier elite.1

Cowen thus ignores the vast policy space separating Piketty's ideas from his own by baking the assumption that aggressive responses to inequality will hobble capitalism into his own prior belief that capitalism is good, and then hoping that trick will allow us to avoid all this confiscatory unpleasantness. It would be as if I argued that America's relatively ungenerous welfare state is culturally incompatible with western democracy and declared that our generational, raging debate over the social contract had been settled.

Obviously, neither debate has been settled. Here in America, for instance, we tax property, including, notably, the property of middle-class families, at the state and local level. We tax inheritance, too, though in a way that captures a great deal of money from merely rich benefactors, but allows the super rich to transfer enormous wealth across generations. These policies aren't optimized to tax the wealth of the wealthiest Americans, but they are large taxes on wealth nonetheless, and seem to mesh perfectly well with the prosperous capitalist society Cowen believes we might lose if we were to flip the burden. Once you bracket the idea that a global wealth tax is necessary, and look at it as a logistical issue, other solutions begin to present themselves. One might not like the idea of imposing a huge penalty on Mitt Romney's hundred-million dollar IRA, but it's certainly feasible.

Many European countries do or have taxed wealth more comprehensively than we do, without ceding rank among prosperous nations—current economic woes notwithstanding. Cowen lets his assumed premise do all the work, rather than reckon with any of this.

Winship, on the other hand, argues that Piketty should have used different income data, to account for some or all post-tax transfers to the poor and working class. If you add it all up, he notes, median income hasn't stagnated as much as Piketty would have you believe. And if that's the case—if the incomes of the bottom 90 percent aren't as stagnant as Piketty's data holds they are—then he has ipso facto overdiagnosed the problem.

To coin Piketty, I want to preface my substantive objection with a note about the sincerity gap between American liberalism and conservatism. I will concede that liberals who believe in a robust social safety net must consistently account for transfers when making arguments about poor and middle class quality of life in the United States. That's essentially what Winship is asking of Piketty. But American conservatives have been fixated for years on the goal of dramatically reducing these transfers. One of the generals in the war against the modern safety net is Paul Ryan, and one of his main weapons is the observation that, if you don't account for transfers, deep poverty in America is higher than ever. Since transfers themselves don't magically bestow higher paying jobs upon the poor, and in some cases reduce work incentives, we should cut the very transfers that, per Winship, have increased the incomes and quality of life of the Americans who are supposedly being left behind.

Winship is one of Ryan's informal advisers.

And though his objection cuts against the notion of an urgent, middle-class crisis implicit in the language of Capital, the data he proposes to use instead conveniently sands the face off the other side of the coin. To the extent that Piketty and Winship are disagreeing, it is a modest disagreement and unrelated to Piketty's other argument, which is that extreme inequalities in income and wealth are matters not just of inequality per se but of power differentials. Post-transfer, things aren't as terrible as the pre-transfer data suggest, but median wages have stagnated for decades and things aren't getting better for the middle class. By contrast, the growth at the very top of the income scale can't be quibbled away. It's orders of magnitude larger. And of course, people with great incomes and wealth have disproportionate influence in the political system, and while they may be willing to countenance whatever minimal level of transfers the imperatives of labor market and political stability require, that doesn't mean they're not influencing the system in other, deleterious ways.

You could rewrite the book correcting for Winship's objection, and it wouldn't affect the social justice argument very much, or change the oligarchy critique at all. But acknowledging that means acknowledging that the compounding wealth of an entrenched population of capitalists and idle rich is inherently in tension with democratic norms or good policy. And conservatives, whether they say it outright, or smuggle it into their other objections, don't actually believe that it is.

  1. "Piketty fears the stasis and sluggishness of the rentier, but what might appear to be static blocks of wealth have done a great deal to boost dynamic productivity. Piketty’s own book was published by the Belknap Press imprint of Harvard University Press, which received its initial funding in the form of a 1949 bequest from Waldron Phoenix Belknap, Jr., an architect and art historian who inherited a good deal of money from his father, a vice president of Bankers Trust. (The imprint’s funds were later supplemented by a grant from Belknap’s mother.) And consider Piketty’s native France, where the scores of artists who relied on bequests or family support to further their careers included painters such as Corot, Delacroix, Courbet, Manet, Degas, Cézanne, Monet, and Toulouse-Lautrec and writers such as Baudelaire, Flaubert, Verlaine, and Proust, among others."