As a book by French economist Thomas Piketty has soared to the top of U.S. best seller lists and the public discourse surrounding inequality has popularized the once rare term "oligarchy" in recent weeks, the American rightwing appears flabbergasted about how to respond to the seemingly red-hot rise of the idea that modern capitalism has become a failure by creating a permanent ultra-rich ruling class to the detriment of the overall economy and everyone else.
In his column in Friday's New York Times, calling it the "Piketty Panic" now occurring among Republicans and Conservatives, Paul Krugman says that what's most interesting about the national conversation sparked by Piketty "is that the right seems unable to mount any kind of substantive counterattack" to the book's central thesis — one that utterly destroys the core arguments long made by the nation's neoliberals and the financial elite.
"People are yearning for an explanation of the dire economic straits in which they find themselves. Piketty’s highly readable style, innovative mind, and breadth of knowledge have made him the ideal candidate to meet this need." —Richard Eskow
Using James Pethokoukis of the rightwing American Enterprise Institute as just one example, Krugman says his rhetoric proves the Conservatives are scrambling. Pethokoukis, in an op-ed in The National Review, said Piketty's book must be refuted, otherwise its ideas “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
But for Krugman the refutations so far amount to little more than familiar tactics. He writes:
What’s really new about [Piketty's book] “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re 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. Don’t call them the 1 percent, or the wealthy; call them “job creators.”
This week, Piketty's book sits atop the best seller lists of Amazon.com, Barnes & Noble, and the New York Times (to name a few), something rather unheard of for a 700-plus page economic treatise draped in extensive data, literary allusions, and scholarly research.
According to Richard Eskow, fellow at the Campaign for America's Future, the high sales and unprecedented public attention drawn by the book say something remarkable about both its content and the current state of economic and political affairs in the U.S.
The surprising sales figure, Eskow writes, are profoundly important:
People are yearning for an explanation of the dire economic straits in which they find themselves. Piketty’s highly readable style, innovative mind, and breadth of knowledge have made him the ideal candidate to meet this need.
As Piketty himself points out, the Occupy Wall Street movement showed that even seemingly abstruse mathematical concepts like “the top centile” can galvanize large numbers of people when they are translated into simpler language like “the 1 percent.” And, in fact, the phrase “we are the 99 percent” is derived from years of research by Piketty and his co-authors.
One of the key services of the book, says Eskow, is the promotion of the idea—backed by evidence—that "however bad you think inequality has become, it’s worse than that."
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The other service, of course, is the statement of solutions, which for Piketty's includes a global tax on extreme wealth as a way to correct what is an inherent flaw of capitalism itself: the outpacing of personal financial riches compared to the overall rise of the economy.
That focus on correcting for massive inequality gets back to Krugman's observation that the rightwing is simply unequipped—or at least temporarily caught off guard—by the power of the economic argument that says higher tax rates would not only lessen inequality across the board, but actually improve the performance of the economy.
The rightwing's primary strategy so far, says Krugman, is to simply call Piketty names, smearing him with the same red-Marxist brush. He writes:
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 that’s how they see it: recently former Senator Rick Santorum denounced the term “middle class” as “Marxism talk,” because, you see, we don’t have classes in America.)
And The Wall Street Journal’s review, predictably, goes the whole distance, somehow segueing from Mr. Piketty’s 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.
Krugman notes that the extreme wealth in the country is now integrally tied to the failed political and democratic processes due to the destruction of campaign finance regulations in a series of deplorable Supreme Court decisions.
But returning to the focus of his column, Krugman concludes that the right's reaction to the book and its argument proves 'Capital' has them on the ropes:
...the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t 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.
And that leaves others, including observers like Eskow, asking the classic question: What is to be done? He writes:
Piketty’s masterful work provides the populist movement with a new vocabulary, along with a powerful data resource with which to make its arguments.
“Capital” offers activists, analysts and lawmakers a new pair of glasses with which to view our economic landscape. If some of that landscape already looks familiar, that’s to be expected. And even when we choose to plot a slightly different course than the one Piketty recommends, he has provided a valuable service.
Thomas Piketty navigates his terrain with three stars to guide him: economics, history and a deep grasp of Enlightenment ethics. That has brought him, and us, to a deeper understanding of inequality’s genuinely “terrifying” implications.
Where we go from here is up to us.