Poor Marx for Thomas Piketty

One of the most bizarre features of Thomas Piketty’s sudden rise to fame as a superstar economist is his alleged affinity for Karl Marx. Both fans and critics of the French author of the bestselling tome have frequently portrayed him as a Modern Marx and a revolutionary.

This is hardly surprising since Piketty presents himself as a Marx 2.0: concerned about inequality but – unlike the flawed original – with data and shorn of the dogma of historical inevitability. Indeed the first part of his book’s title, Capital in the Twenty First Century, copies that of Marx’s masterwork (or Das Kapital in the original German).

Normally an examination of such comparisons would be for the academic seminar room but there is something more at stake in this case. Piketty’s association with Marx is meant to suggest that the French economist is a radical thinker of some sort. Perhaps not a full-blooded revolutionary like Marx but a reformer who attempts to ground his arguments in solid evidence.

The trouble is that Piketty’s own professed affinity is not grounded in the facts he claims to extol. If he had read Marx he would know that in many respects his arguments are diametrically opposed to those of the Germany revolutionary. We know that Piketty has hardly done so because he has admitted it himself.

In an interview in the New Republic, an American magazine, he implied he had not read any Marx apart from the Communist Manifesto. But that pamphlet was only meant as a manifesto rather than a heavyweight theoretical text. The clue is in its name.

There are many differences between Piketty and Marx but the most important one for the purposes of this blog is the contrasting view on inequality. For Marx the existence of large social inequalities – or class in 19th century terminology – was more-or-less a self-evident truth in market economies. Although

Marx did in fact make extensive use of empirical material he saw little need to examine the exact contours of class.

He made this clear in a letter he wrote to his friend Joseph Weydemeyer in 1852:

“Now as for myself, I do not claim to have discovered either the existence of classes in modern society or the struggle between them. Long before me, bourgeois historians had described the historical development of this struggle between the classes, as had bourgeois economists their economic anatomy.”

As an aside, trivia fans might be interested to know that Marx wrote this letter while living at 28 Dean Street in London’s Soho district. Today it is the site of the swish Quo Vadis restaurant but back then he lived in two small rooms with his family of five.

Marx’s focus in Capital was not class but an examination of what he saw as the laws of motion of capitalist society. He did this to show the historically transient character of capitalism although – contrary to the claims of Piketty and countless others – the thrust of his argument was hostile to the notion that its overthrow was inevitable.

Piketty, in contrast, is being lauded for outlining a trend that was apparent long before Marx. The old German revolutionary would be right to dismiss the Frenchman as yet another bourgeois economist.

This piece was first published today as a blog post on Fundweb.