I am an economist by education (originally, as more recently I’ve morphed into an anthropologist). No, wait! I’m a Marxist economist by education and there has never been a better time to be proud of the fact. With Piketty’s Capital in the 21st Century , I finally understand why my early reading of ‘Das Kapital’ both made sense and was soon after ridiculed.
In one sense, I am the embodiment of how Marxist economics fared in the 20th century. Growing up in Romania in the 1970s and 1980s, I lived in a sheltered world that believed in workers’ rights, in economic equality for all and the common good – at least theoretically. Which was/is a big deal.
Outside the socialist cocoon, Marx had been discredited by a world that believed wealth would trickle down and the world would magically become more or less fair, with everyone sharing in the bounty. Deep down, however, perhaps we always knew that not to be so, especially those of us working in international development who became more and more frustrated with desperate poverty and couldn’t figure out how to make a difference.
And along comes Piketty and proves, with facts and figures, that the relatively short period of seeming equality was due mainly to the ravages of two World Wars and the subsequent stringent controls on wealth and rolling out of welfare states. In other words, relative income equality was an exception, while the rule is that the top richest people continue to accumulate to the detriment of the rest of us. This graph beautifully illustrates what happened.
It has been said that Marxists already knew what Pikkety is saying now, and if you’ve got the time, I urge you to read this paper that seems to talk about the likes of me: those of us who always in our heart of hearts believed that the mega rich are sitting on the vast majority of the world’s wealth and that this wealth was stolen (read earned through capital returns) from the working people.
Yes, I did always know this. Why, you ask? Because, unlike some of my contemporaries, I was educated to believe in Marx; because I know many people at the very bottom of the economic heap, who have an excellent viewpoint of what’s really going on; because recently, like many other people, I slid a fair way down the economic scale simply because I rely on my wages rather than the return from property.
But here’s the twist: I personally know a few people at the top of the heap and I frequently interrogate them about their wealth – most of the time, the surprising fact is that many don’t know they are sitting on mountains of privilege and sometimes they even don’t know how much wealth they command. The surprising fact about the top 1% that Piketty is talking about is this: far from being immensely powerful, many of them are completely passive when faced with money, resources or decisions. I’ve met many immensely wealthy people who find it hard to think about their privilege, to manage it (let alone wisely!), and live fairly miserable and lonely lives, making not much of difference in the world. Still, they go to bed and they wake up richer the next day. As a result their money seeps into any number of unsavoury deals, and is invested mainly in those industries where the returns are highest – read arms, pornography, drugs, child labour.
From this vantage point, the solution to many of the problems is quite obvious, and it does not involve more economic growth, just better redistribution. Obvious is not simple and obvious is not easy, as Pope Francis discovered last year. But it’s the way to go, especially if we want to release the resources to tackle both poverty and climate change.
Which is why I am a Green politician and why I believe in the Common Good.