- Timothy Shenk discusses Thomas Piketty's contribution to a critique of unfettered capitalism and gratuitous inequality:
Seen from Piketty’s vantage point, thousands of feet above the rubble, the fragility of this moment becomes clear. Economic growth was a recent invention, major reductions to income inequality more recent still. Yet the aftermath of World War II was filled with prophets forecasting this union into eternity. Kuznets offered the most sophisticated expression of this cheerful projection. Extrapolating from the history of the United States between 1913 and 1948, he concluded that economic growth automatically reduced income inequality. This was the moment when, as Piketty observes with both regret and nostalgia, “the illusion that capitalism had been overcome” secured widespread acceptance.- The Globe and Mail slams the Cons for continuing to push the Unfair Elections Act, while Michael Bolen and Lawrence Martin both see it as a northern expansion of Republican-style vote suppression. Adam Shedletzky worries that it represents the end of reason in our electoral system, while Patti Tamara Lenard discusses its infringement on voting rights. And Bruce Cheadle reports that the federal government defended the Cons' previous ID requirements by pointing to exactly the vouching process which is to be eviscerated under the Unfair Elections Act.
Time soon deflated this optimism. Although the growth of global GDP has accelerated—billions of people across Asia are now catching up to their rivals, a position analogous to Europe after World War II—the best available evidence suggests that these levels are impossible to sustain at the technological frontier. Europe’s per capita growth dropped to just below 2 percent from 1980 to 2012; the United States’ was even slower, coming in at 1.3 percent. Meanwhile, the link between rising GDP and falling inequality was severed, with the largest gains from diminished growth flowing to the richest of the rich—not even to the 1 percent, but to the one-tenth of 1 percent and higher.
Although the contours of Piketty’s history confirm what economic historians already know, his anatomizing of the 1 percent’s fortunes over centuries is a revelation. When joined to his magisterial command of the source material and his gift for synthesis, they disclose a history not of steady economic expansion but of stops and starts, with room for sudden departures from seemingly unbreakable patterns. In turn, he links this history to economic theory, demonstrating that there is no inherent drive in markets toward income equality. It’s quite the opposite, in fact, given the tendency for the returns on capital to outpace growth.
Despite the lengthy historical surveys, Capital in the Twenty-First Century, as its title implies, is as much about the future as it is about the past. Per capita growth for developed economies, Piketty believes, has settled at approximately its maximum sustainable rate, around 1 percent annually. That was enough to make people in the nineteenth century feel they were caught in perpetual revolution, but judged by the best of the twentieth century, or China and India today, it seems positively anemic. With growth reduced, escalating income inequality is all but inevitable without aggressive policy intervention. Piketty’s demand for a global progressive tax on capital has garnered the most attention, usually from commentators eager to dismiss it as utopian. But the global tax is more of a rhetorical gambit than a substantive proposal. It is designed to make Piketty’s real aspiration—the same tax, but confined to the European Union—seem more attainable. When the alternative requires obtaining planetary consent, making one continent sign on to a policy becomes a reasonable reach. Countries as large as the United States, he believes, could go it alone with considerable success.
Progressive taxation of capital is one part of a larger project that Piketty calls building “a social state for the twenty-first century.” This economist is no revolutionary: the major arguments over the structure of government, he believes, have already been settled. The twentieth century bequeathed a vision of government responsible for the education, health and pensions of its citizens, and those obligations will be upheld in the twenty-first. For Piketty, the most urgent task is not raising the general welfare but clawing back the advances of the 1 percent. Much needs to be done, he writes, “to regain control over a financial capitalism that has run amok.”
- Meanwhile, Alice Funke notes that the Cons' current MPs are fleeing into seemingly safer new ridings - suggesting they don't think they can win where they did in 2011. And Chantal Hebert points out Stephen Harper's eroding support - offering another indication as to why fighting a fair election in 2015 simply isn't an option for the Cons.
- Andrew Nikiforuk writes about the combination of minimal safety enforcement and high rates of worker injuries in the tar sands. And PressProgress wonders whether this will be the week that the oil industry's constant spin finally unravels.
- The Globe and Mail argues that we should be encouraging long-term immigration rather than driving down wages through temporary and disposable labour.
- And finally, Gerald Caplan analyzes Quebec's provincial election, and finds that the biggest winner was a party which didn't contest it:
(S)omething significant seems to have changed within Quebec’s political culture. It appears that many young Quebecois, traditionally separatists and social democrats, voted Liberal Monday night to express their weariness with separatism and their disillusionment with the PQ’s embrace of Pierre-Karl Peladeau and neoliberalism. That’s nothing but good news for the NDP. In the 2011 federal election, many young Québécois abandoned the Bloc and joined the Layton orange wave, electing a ginormous contingent of NDP candidates. Under Tom Mulcair, those MPs, many young and inexperienced, have acquitted themselves surprisingly well. If played right – a big “if” for any political party, as Monday’s election reminded us – their appeal to younger Quebecois should be another NDP slam dunk.