The left is now for the
educated elite
Today, skin color and religion are politics.
But how many care about finances? Thomas Piketty does - and he believes that
identity conflicts have increased precisely because we talk too little about
economics.
It was the taxes that made it possible - both
colonialism and the welfare state. From the 16th century, the European states
began to levy significantly higher taxes than China, writes the French
economist Thomas Piketty in his new book "Capital and ideology". This
is one of the explanations for Europe's dominance: with taxes, larger armies
and navies could then be financed. In "Capital and ideology" he has
collected data on the world's economic history from the bourgeois society
through colonialism and industrialization to the present day.
The period 1914–1980 is the great exception:
then the Western world experienced an unparalleled material redistribution.
Healthcare, education and rights took a leap forward, funded by higher taxes. The richest percent share of national
wealth fell from 70 to 20 percent without harming growth; during the tax
period, some of the highest economic
growth rates ever observed occurred. After
1980, injustices began to grow again. The richest percent has received a larger
share of world growth than the poorest 3.5 billion. In the USA, inequality is
now greater than in 1910. Today the world's most unequal region is the Middle
East, where the distance between rich and poor can be as great as in the
French slave colony Saint-Domingue around 1780. Despite the ambition to write
global history, Piketty is noticeably fond of Swedish social democracy. But
today, European social democracy has abandoned all real ambitions to reduce inequality and redistribute wealth.
The left has become "the parties of the educated elite". Voters react
by becoming nationalists. It is "very convenient for the elites to explain
everything by stigmatizing the alleged racism of the members of the
less-favored groups," writes Piketty.
You have just written 1,164 pages about the
history of economic injustice, but who cares about economics? Politics is about
identity, skin color, religion and nationality; that's what engages people
today. How do you want them to discover that they have common financial
interests? - One of the most important
explanations for the increase in identity-based conflicts, I think, is that we
have put an end to the economic discussion. For 20-30 years we have said that
there is only one possible economic policy, that governments can do nothing to
reduce inequality, the only thing they can do is control their borders. Then we
should not be surprised if the whole political discussion begins to be about
border controls and identity.
Piketty points out that for a long time we
have also neglected the legacy of colonialism and slavery. When Haiti, which
was France's largest slave colony, became free, the Haitians were forced to
compensate the slave owners for lost property, a debt that Haiti paid from 1825
to 1950. - Today, Haiti wants
compensation for that, which I understand. The difficulty is to reconcile the
universal perspective on equal rights for all with a recognition of specific
cases of discrimination that have taken place, or are still ongoing. I get
worried when it's just about symbols and identity issues. We have these
conflicts over identity and over migration, but we lack constructive economic
solutions, both in terms of class differences and racial discrimination. We
need to start discussing economics again.
Piketty wants to apply social democracy of
European - or even Swedish - model to the rest of the world. Can that recipe
work again, in a new context? Was not the model with high taxes and generous
welfare dependent on the long boom of the 20th century? - There is a major economic upswing in China and India, and we will see
an economic upswing in Africa in the future. If the condition for the welfare
state is high growth, then it is already met in many developing countries.
There is much to learn from Europe, but also from other parts of the world. In
terms of progressive taxation of inheritance and income, the United States was
a pioneer in the early 20th century.
In his book, Piketty often describes growth as
a reward for the right kind of political decision. Indian states that dare to
try a land reform, for example, are experiencing better growth than their
neighbors. How do you see the conflict between growth and the environment? - Ten
percent of the world's countries account for more than half of global
emissions. We need to change our
criteria for economic development. I always talk about national income, not
GDP. If you pump up oil for 100 billion euros, your GDP has increased by 100
billion, but national income has not been affected at all, because the oil was
there from the beginning. When you then burn the oil, you get carbon dioxide
emissions, and whatever price you want to put on the emissions, it gives a
negative national income rather than an increase in GDP. "One of the most
important explanations for the increase in identity-based conflicts, I think,
is that we have put an end to the economic discussion.
Piketty describes how the workers' parties
that built welfare have been transformed into parties for the highly educated.
From being parties for people with problems, they have become parties for
people without problems. Was this development inevitable? - In the 1950s and 60s, it was the
low-educated who voted for the Social Democrats in Sweden, Labor in the UK, the
Democrats in the US, and so on. Gradually, instead, it will be the highly
educated voters who vote for these parties. My interpretation is that it is
because the parties have failed to renew their redistribution policy. They have
abolished progressive taxation for the highest incomes. This exposes the social
contract to great risks, as it threatens the idea of economic justice on
which the welfare state rests. If you are a billionaire today, you should move
your fortune to the People's Republic of China, where inheritance tax is zero;
privatized companies and natural resources can be passed on to the next
generation. It is very strange that Sweden has also abolished the inheritance
tax, while it is 40–50 percent in Japan and South Korea. Youth unemployment in
many EU countries is around 20 percent, in Spain 40 percent. This is a whole
generation that the labor market does not need. A redundant generation equals
violence and social problems. Where should the jobs come from? It becomes even
more worrying if you consider that computerization is expected to take up a
large proportion of jobs in many industries. - The young people have been let
down, especially after the corona crisis. The paradox is that we are said to
live in an innovative knowledge economy at the same time as investments in
education have stagnated. The investments are at the same level as in
1980–1990, while the proportion who go on to higher education has increased
from around 20 per cent in 1980 to 50, 60, 70 per cent.
An explanation for why in 2014, Thomas Piketty
spoke at a seminar in Almedalen arranged by the Social Democrats. Even today,
six years later, Piketty speaks warmly about the Swedish Social Democratic
tradition of ideas. Thomas Piketty attracted great international attention in
2013 with his book "Capital in the twenty-first century". With the
help of long data series, it showed how the development of income and wealth in
the industrial nations has moved towards an increasing concentration of capital
in fewer and fewer hands and towards growing economic gaps (= Capitalist
Accumulation). This summer, Piketty's new book, "Capital and
Ideology", was published. - We have
shrinking growth and growing inequalities, and sometimes a very worrying
situation for young people. This is, I think, precisely because the educational
investments are stagnant. Finally, let's talk about migration. In the 1960s,
the newly independent colonies were surrounded by enormous optimism, they would
rise on their own and become modern, successful countries. 50 years later, all you can do is try to escape from there. How do
we get a world where no one needs to escape? - State formation is a process that can take hundreds of years. In the
1960s, we thought that the new, independent states would be able to do it in
5-10 years, but that was not realistic.
In addition, these countries have experienced the largest population increase
in history. Egypt had ten million inhabitants a hundred years ago, now they
have one hundred million. Imagine the investments that would be needed for
schools and infrastructure. Every society needs to develop a trust in the
state's ability to uphold justice - not a perfect justice, but at least an
acceptable injustice. - In Sweden's case, it is fascinating to see that you
were one of the most unequal countries in Europe until 1910–20. In local
elections, a single wealthy voter could have 50 percent of the vote; this is
something that Donald Trump would not dare to propose today. Inequalities can
disappear faster than we think.
That's what makes me optimistic in the long
run.
