Capital in the Twenty-First Century, a book by French elite scholar Thomas Piketty, has become an unlikely bestseller.
Less than a month after its English edition appeared in the United States, the book has lit a fire amongst the world’s scribbling classes. Print copies of the book have sold out, while the digital edition has gone to number one on Amazon.
Here in Ontario, just about the last thing Premier Kathleen Wynne did before calling a provincial election for June 12 was release a Piketty-esque budget, which opposition parties rejected.
Now, in a real-world test, the people of Ontario will have a chance to prove whether the popularity of the Piketty principles extend beyond the ivory towers.
Piketty’s book is a reasoned argument that economic inequality is not only bad for capitalism but is a natural outgrowth of unrestrained capitalism. It claims to prove that the only way to get the global economy back on track is through intervention by governments. As such, it is a rabbit punch to the belly of traditional free-market thinking.
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Premier Wynne has not officially aligned herself with Piketty. But with the policies laid out in the Liberal budget — higher taxes on the rich; a pension for people threatened with poverty in old age; a higher minimum wage; higher payroll taxes on the private sector — Wynne seems to be positioning herself as the Piketty Premier.
“The book’s success has a lot to do with being about the right subject at the right time,” says The Economist magazine in an article this week. Certainly the media, left and right, is flooded with reviews and commentary on Piketty and his thoughts. Those who agree call his ideas revolutionary. Critics call him a dangerous ideologue.
Not the only credible voice
At the time of the Occupy movement, commentators like yours truly were critical of the economic status quo, but Piketty gives such feelings the credibility and heft of a Grande école economist.
Picketty is not the only credible voice warning of the growing rich-poor split. The International Monetary Fund took a similar line. And just this week, the rich countries’ think tank, the OECD, pointed to Canada as one of those countries where the greatest proportion of wealth goes to the richest.
The OECD’s recommendations — higher taxes on those with the most money — could have been written by Picketty.
If voters all agreed with the OECD and Picketty, you might think Premier Wynne would be a shoo-in to win the upcoming spring election. But despite all the ivory-tower advice, raising taxes, even on the rich, has not proven itself to be a political winner.
The poorest don’t typically vote. Neither do they donate to political campaigns. Besides, no matter how far the Wynne government goes in taxing the rich or raising the minimum wage, many voters on the left will say it is merely window-dressing.
While Wynne may hope to grab votes from the New Democratic Party, saying they should have accepted an NDP-friendly budget, there will always be those on the left who say her policies do not go far enough.
Finally, the competing ideology that low taxes and free enterprise are the ultimate engine of economic success is an idea that is far from dead. Piketty and others compare our current era with that of the Gilded Age, that great period of inequality at the end of the 19th and beginning of the 20th century. But that age of mansions and hovels, masters and servants, did not end easily.
It took the shock of two world wars and the Great Depression to bring in a government willing to shake off the power and influence of the richest and redistribute wealth more evenly. We have certainly not yet reached a crisis of those proportions.
While pessimists say we are on the inevitable road to ruin, many of those who vote continue to put their faith in a business-led recovery. It appears those who disagree are not worried enough to put their differences aside. It may well be that the time has not yet come for a Piketty Premier.