Friday, April 25, 2014

It's all superstructure!

So, I'm plowing my way through Piketty's masterpiece Capital in the 21st Century--halfway through! I really love this book [all 700 pages], because I'm learning so much. I also want some credibility for why I'm such an acolyte of his. Not just some poser who collects books for his bookshelf to impress onlookers; someone who doesn't actually read them (although a certain Swede accused me of doing just that in grad school...and he wasn't completely wrong). So far, it's not a disappointment. And certainly proves my nerd qualities that I'm reading this in my free/unemployed time.

Piketty's thesis has certainly generated a great deal of press and popularity in this country since it's rushed publication. The book apparently reached the NYT bestseller list and sold out on Amazon. The leftist blogosphere and intellectual mags are having collective orgasms around it. As soon as I get through more of it, I'll post of my own review. Yet, since the book has titillated the collective penis tip of the Left in the US, half-thinking pseudo-intellectuals on the Right are trying to put the giant wet blanket on our hot nerdy love affair. And I want to get on that bandwagon before it fully pulls away.

Ross Douthat tried to do that this past Sunday. Confession: Every time I start to read his column, I 1) gird my loins; 2) take a deep breath; and 3) preemptively roll my eyes upwards; all to prevent a really exaggerated response. [The fact that all of the regular columnists at the NYT besides Krugman and Blow, maybe Collins and Nocera too, should go is just accepted fact now. Blow it up!] But I didn't know Douthat's scribbles would inspire me to link Piketty's popularity to another interesting piece of scholarship that's making the online rounds at the same time.

Thank gosh Douthat realizes he's not qualified to talk about the actual economics in Piketty's book. Most people on the Right would not be so humble (if only they did so for Climate Change and Evolution as well; Krugman points out that no one on the intellectual Right have really contradicted Piketty's thesis). Instead, Douthat retorts, by arguing Piketty can't be right about growing inequality leading to revolution because we haven't see any yet. Despite large amounts of wealth being concentrated in the top 1%, with the wealth convergence experienced in the immediate postwar years, there's no massive movement of support for the Left in developed countries. Instead, people are voting for the far-Right fringe parties (Front National, UKIP, and, yes, he does go there...the Tea Party!). Why? 

"For now, even as the rich have gotten much, much richer, the 99 percent have shared in growing prosperity in real, measurable ways." [He cites another stupid article from a Forbes (scarebleu!) columnist criticizing not Piketty's thesis {which he gets wrong} but another article coauthored with Saez]. 

So like every other conservative critics of Piketty, Forbes, Douthat and others continue to defend the trickle-down theory of economic growth. What Douthat doesn't know is that votes for the Far-Right don't come from the unemployed and poor masses; they're not the ones deluded. They come from middle to upper-middle class professionals who tune into the "news". They're upset about immigrants and their kids living at home. They come from areas where there aren't a lot of immigrants. The poor, the working class, and those suffering from slow wage growth still vote for the Left--either here or Western Europe. They just can't get through and win.

But what if Douthat is right? What if we're headed to a second Belle Époque, where there will be huge levels of inequality, and national shares of capital and income are concentrated in fewer and fewer hands and no one cares? Maybe the general public thinks that these horrid levels of inequality are legitimate. Piketty acknowledges that this is a possibility: 

"Indeed, whether such extreme inequality is or is not sustainable depends not only on the effective of the repressive apparatus, but also, and perhaps primarily, on the effectiveness of the apparatus of justification. If inequalities are seen as justified, say because they seem to be a consequence of a choice by the rich to work harder or more efficiently than the poor, or because preventing the rich from earning more would inevitably harm the worst off members of society, then it is perfectly possible for the concentration of income to set new historical records." [264]

So we may have false consciousness. And the recent work of two American political scientists may confirm that. Martin Gilens and Benjamin Page test four established theories in the literature about which actors are most responsible for legislation Congress products. Like Piketty, they assemble a unique and awesome dataset of voters, lobbyists' and organizations' preferences and how they align with the legislation produced. They find that the average voter has extremely little impact on laws passed. Instead business elites and business interest groups have an extremely strong influence on legislation. If what the average citizen wants conflicts with what organized business groups want, the average citizen, the median voter, loses.

Their study has legitimately received a lot of attention, particularly by what passes as leftist media outlets. However, there are two cautionary notes that the authors raise that are not getting enough attention in the blurb-focused media. First, they find that the preferences of elites (the top 90th percentile in income) correlate with the preferences of the median voter (at the 50th percentile). Perhaps unsurprisingly, businesses interest groups' preferences and the average American do not. 

Second, and more importantly, their data do not show that the average American is not getting what she wants. They fairly often get what they want, so long as it coincides with what business groups want. And their study can only include the items that got onto the legislative agenda; not the ones that don't (immigration may be an example). Furthermore, their study doesn't show how elites actually shape the public's preferences.

So, both Piketty and Gilens and Page can't quite answer what Douthat is claiming yet--that the middle class isn't rebelling because they're more interested in social or cultural breakdown than economic despair, or think that these levels of inequality and the policies that support them are unfair. If high levels of inequality and income concentration and policies that favor elites and business interests are perceived as a legitimate, then there's no problem for democracy in American--yet, economic conditions will continue to suck.The recent opposition to the FCC's recently proposed rules destroying net neutrality could be a could test case. Let's not even get into the stupid and evil merger of Comcast-Time Warner.

Why don't the masses rebel? Maybe it is because America is that strange place where libertarianism and "economic liberty" arguments are widely shared across the American public, preventing policies of income redistribution. [This assumes that this is what must be done to tone down inequality.] That "American Dream" argument. Maybe it's the usual go-to standard-bearer factor--racism. The brouhaha over Cliven Bundy seems to support that view. But at least we now have to look into the ideological factors that sustain these policies and institutions now. And figure out how to change the ideological climate again. We know that there's more inequality, and how it came about thanks to Piketty. We know how much business interests and some elites control Congress. We now need to know how to change the ideological climate to promote mass political action.

More on Piketty to come!

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