Reprinted from Law & Liberty
In the introduction to Democracy in America, Alexis de Tocqueville asserted that the history of the world, or at least of the West, exhibited a providential, inevitable movement towards equality. As the scholar Marvin Zetterbaum argued in his book Tocqueville and the Problem of Democracy, Tocqueville’s claim was partly rhetorical: by persuading democracy’s conservative opponents in France to accept its inevitability, he hoped to induce them to join in guiding it in a salutary direction, harmonious with human liberty and dignity. By contrast, in the last part of Volume Two of his book, Tocqueville expressed the fear that the principle of equality, if carried to an illiberal extreme, would culminate in a “tutelary” despotism, in which government, even if elective, would deprive individuals of the freedom to act, aiming to regulate all their actions for the sake of what it “knew” was their good.
Tocqueville found the most distinctive characteristic of American democracy to be the equality of conditions that all citizens enjoyed. By this he didn’t mean that nobody was richer, more politically influential, or more socially renowned than anyone else. But the economic inequalities America exhibited were fluctuating rather than fixed, as people took advantage of the opportunity to rise through their own efforts. Moreover, since all officeholders derived their positions, directly or indirectly, from popular election, Americans were politically equal. Nor could anyone, regardless of his wealth, position, or achievements, afford to look down on his fellows: if anything, those with aristocratic pretensions needed to conceal them from the public. Finally, in Tocqueville’s account, Americans took a direct, active role in their governance, with most domestic affairs being decided at the local level.
Thomas Piketty, a French economist who achieved international celebrity with his book Capital in the Twenty-First Century, begins his sequel to that work by observing a worldwide trend over the past two centuries in the direction of equality. Unlike Tocqueville’s claim in this regard, Piketty’s assertion of that movement in A Brief History of Equality is based on evidence from various portions of the world, although he is chiefly focused on Europe (especially France) and America.
The March Towards Equality
Contrary to its title, Piketty’s book is not chiefly historical. Nor does he exhibit any of Tocqueville’s reservations about the dangers of carrying the egalitarian principle to an extreme. Rather, from the outset Piketty adopts (without any explicit justification) the premise that economic and political equality is an unmitigated good, to be advanced to the greatest degree possible. To recognize the modern tendency towards equality “is not to brag about success,” he remarks, but rather “to call for continuing” its pursuit, recognizing that the movement
still has a long way to go, especially in a world in which the poorest, and particularly the poorest in the poorest countries, are preparing to be subjected, with increasing violence, to climatic and environmental damage caused by the richest people’s way of life.
Piketty recognizes that the share of property possessed by the richest one percent of the French population has halved since the end of the eighteenth century. This particularly benefits the middle class, whose share of national wealth “underwent spectacular growth” during that period. He nevertheless warns that the scope of the march toward equality “must not be overestimated,” since “the richest 10 percent” still owned over 55 percent of all property at the start of the 2020s, while “the poorest 50 percent own next to nothing,” that is, “five per cent of the national total.”
Without explaining what he would regard as a satisfactory level of equality, Piketty calls for radical increases in the progressivity of income taxation, as well as taxes on wealth itself, to mitigate these alleged injustices. He ordains international policies combining “remedial” justice (to compensate descendants of the victims of slaveowning and colonialism) and “universalist” justice designed to reform the world economic system so as to “reduc[e] inequalities and ensur[e] that everyone has the most egalitarian access possible to education, employment, and property.”
The Decommercialization of Human Life
As indicated above, Piketty adds to the ground of the redistributionist program laid out in Capital an unsubstantiated assertion of imminent global catastrophe supposedly caused by inequality, which forms a recurring motif in Brief History. He judges existing policies of international aid to poorer countries to be hypocritical, since the aid is small by comparison with the “cost of climatic change” the richer nations inflicted on the poorer ones, supposedly amounting to “several points of the global GDP.” He does not acknowledge that the greater air and water pollution, and alleged contribution to climate change, produced by the world’s richest countries was a function of their industrialization, which contributed vastly more to the world’s wealth than such pollution could have subtracted from it. And of course it is industrially developing nations like China and India that now cause far more pollution than Western nations which have invested much more in combating it.
But climate catastrophism is not the chief ground of Piketty’s proposals. Rather, those proposals embody a project for achieving a radical expansion of existing welfare-state policies and steeply progressive taxation of both incomes and accumulated wealth so as to lay the foundation of a new politico-economic order Piketty calls “democratic, self-managing, decentralized socialism.” This project, at its deepest level, entails abandoning the Lockean/Smithian principle that private property rights are “sacred.” Gone is the liberal policy, enshrined in America’s Declaration of Independence as well as the French Declaration of the Rights of Man and Citizen, that regards the securing of individual rights, including the right to property and to the pursuit of one’s own conception of happiness (so long as one does not violate the equal rights of others), as the primary purpose of government. Piketty aims to remove “vast sectors” of human activity from the ”commercial logic” of voluntary, private transactions. Instead, he would assign to government the responsibility for “organiz[ing]” not only health care and education, but also “culture, transportation, and energy” (with “cultural policy” including such aspects of life as “show business.”)
To advance what he terms the “historical process” of “decommercialize[ing]” human life (meaning the extension of government-run social-welfare and socialist policies), Piketty applauds the adoption of “virtually confiscatory tax rates” on income such as existed in the United States from 1950 to 1990 (with an “average” top rate of 72 percent) as an “immense historical success.” These policies enabled a great reduction in “the divergence of fortunes and incomes, … improving the situation of the middle and lower classes, developing the welfare state,” and improving overall “economic and social performance.” “Historically,” Piketty maintains, “it is the battle for equality and education that has made economic development and human progress possible, and not the veneration of property, stability, and inequality.”
Piketty’s “historical” assertions are quite unhistorical. As the economic historian Deirdre McCloskey (along with numerous other scholars) demonstrates in her trilogy Bourgeois Dignity, Bourgeois Equality, and Bourgeois Virtue, it is the liberation of the peaceful pursuit of individual economic gain from heavy-handed government restraints that made possible the vast improvement in living standards: first in the West and then throughout the world, which Piketty himself acknowledges took place beginning around the start of the nineteenth century. That pursuit, far from venerating “stability,” upset pre-existing feudal orders, enabling persons of modest means to rise, even while (as Marx and Engels acknowledged in the Communist Manifesto) they tore asunder previous political and economic hierarchies. Nor, of course (as seen in Tocqueville’s America) did it worship “inequality” as a goal. In fact, it is only thanks to the enormous increase in national wealth that it became possible for governments to finance such welfare-state policies as free public education and all sorts of transfer payments to the poor, the disabled, and the elderly.
It is curious that an economic historian should take at face value the high rates of federal taxation that existed in the U.S. from 1950 to 1990 without acknowledging the vast network of exclusions from taxable income that made those nominal rates tolerable. These included, for instance, unlimited deductions for medical expenses, liberal home-office deductions, and income-tax averaging, all of which were eliminated by the 1986 Tax Reform Act, in return for the lowering of rates. To raise tax rates (without such exclusions) on the highest incomes to the levels envisioned by Piketty, along with annual confiscations of a proportion of the property owned by the wealthy, would be an unprecedented expansion of state power. Nor does Piketty, in making these proposals, acknowledge the deterrent to private investment that they would entail.
Piketty never mentions the economic reasons that led the governments of France and other European countries to abandon their wealth taxes after a few years, including the exodus of some 42,000 French millionaires. Instead of worrying about deterring business investment, Piketty praises the benefit of high tax rates on capital in compelling the rich to live less “extravagant[ly]”—as if, we are tempted to say, they were Russian oligarchs, profiting from Putin’s beneficence. And along the way, as further evidence of the benefit of removing “vast sectors of the economy” from “commercial logic,” Piketty cites a “fact” that every informed person “knows,” that European-styled “public health care systems” are “both less expensive and more efficient” than the (largely) private American one. But this “fact” disregards the actual fact that European systems keep costs down by rationing, limiting the kind of drugs that may be provided, and causing extended waits for medical care. Additionally, as indicated by his proposal for governmental control of “cultural policy,” Piketty assumes that in every realm of life from economic productivity to “show business,” “the state” always knows better than any private individual the right thing to do. Regarding the danger posed by redistributive policies to individual initiative in the artistic, scientific, and philanthropic realms, one needs only to read Bertrand de Jouvenel’s classic The Ethics of Redistribution.
There are numerous aspects of both Piketty’s charges against “commercialism” and his proposals for reform that display a lack of the sort of thinking-through one would expect of a competent economist or social reformer. As part of his critique of the supposed hypocrisy of Western aid to poorer countries, Piketty observes that donor countries received far more from their investments in those countries than they donated in aid. But why should the former not exceed the latter? Why would any company make an investment that wasn’t expected to yield a greater net return, even after charitable contributions? And aren’t income-earning private investments also more likely to benefit the inhabitants of poorer countries (providing jobs and technical training) than giveaways that wind up subsidizing authoritarian governments? Similarly, without evidence, Piketty claims that “the process of development in wealthy countries was based on a major increase in the power of the fiscal state,” that is, of tax revenues, between 1914 and 1980. But how does he explain the massive increases in national wealth that preceded and followed those years?
The Despotic State
Echoing President Obama’s “you didn’t build that!” remark, Piketty calls for restricting the ability of corporations to enrich themselves through international capital transfers, since their wealth depended on publicly funded infrastructure and “educational and health care systems” in their host countries (despite his having criticized private health care). And as a means of preventing high earners from contributing to the “consumer rat race” while leaving scant time for family or civic goods, he urges overcoming the “patriarchy” that supposedly blocks women from achieving high executive positions—as if encouraging them to participate more fully in the pursuit of executive positions would strengthen families rather than promoting further consumerism.
Perhaps most revealing of Piketty’s ambitions, recalling Tocqueville’s worst fears, is the repeated emphasis in his chapter on “Exiting Neocolonialism” on the need for building “strong states” in the less-developed nations. Piketty complains that nongovernmental organizations’ provision of direct aid to the people, rather than transmitting it through state officials, “weakens state construction.” (Contrast the writings of development economists like the Peruvian scholar Hernando De Soto on how heavyhanded government regulations and corrupt bureaucrats are the chief obstacle to the advancement of the poor.)
In the end, Piketty is less concerned with promoting either political or individual freedom than he is with building a “state” strong enough to push “to its logical conclusion” the movement towards “real equality” as he conceives it—based, it would appear, on nothing more than an ambitious intellectual’s attraction to abstract principles. This is reminiscent of the armchair, “literary politicians” to whom Tocqueville and Edmund Burke attributed the origins of the terroristic French Revolution. Both Piketty’s principles and his policies are a perfect recipe for achieving Tocqueville’s democratic despotism.