Notes: Piketty’s Capital–The Introduction

I have been reading Thomas Piketty’s Capital in the Twenty-First Century for the past few weeks and have decided to post my notes on the book in a series of blog entries. I have noticed that since the English translation of the book became available, the book has been a subject of intense debate. But mostly what I also find fascinating is that quite a few public figures are talking about the book without having read it. So, the purpose of these notes is personal and public: personal because these notes, I hope,  will help me understand the book better and public in the sense that these notes will be available to all those who want to read and discuss the book.

Note: In the discussion below the headings created by me are provided in bold and the original section headings from the book are provided in italics.


 

The Questions

In the introduction, Piketty clearly lists the questions that he attempts to answer in this book. The main question is about the “Distribution of wealth. (DW)” Which is followed by certain concomitant questions:

  • Do we know about the evolution of DW over long-term?
  • Does the dynamics of private wealth, a la Marx,  lead to concentration of wealth?
  • Or, a la Kuznets, the balancing forces (growth, competition, technological progress) lead to a reduced inequality?

What Makes Piketty’s Study More Convincing

  • It is based on “much more extensive historical and comparative data” (1).
  • “Data covering three centuries and more than twenty countries” (1).

Piketty’s main Assertion

When the rate of return on capital exceeds the rate of growth of output and income . . . capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based. (1)

Policy Recommendations

Based on this historical, empirical research, Piketty offers some policy recommendations (later in the book) with the following aim:

[So that] democracy can regain control over capitalism and ensure that the general interest takes precedence over private interest while preserving economic openness and avoiding protectionist and nationalist reactions. 

A Debate without Data?

This section of the introduction provides Piketty’s views on the previous debates on the DW question, which in his words, was  “based on relatively limited set of firmly established facts together with a wide variety of purely theoretical speculations” (3). Piketty also provides, in this section, an explanation of the role of the social science research, something that we all should also think about:

Social scientific research is and always will be tentative and imperfect. . . . But by patiently searching for facts and patterns and calmly analyzing the economic, social, and political mechanisms that might explain them, it can inform democratic debate and focus attention on the right questions. (3)

Malthus, Young, and the French Revolution

Thomas Malthus  influenced partially by the travel diary published by Arthur Young, was first of many to tackle the question of distribution. For Malthus the “primary threat was overpopulation” (4). Affected by the French revolution, Malthus “argued that all welfare assistance to the poor must be halted at once and that reproduction by the poor should be severely scrutinized lest the world succumb to overpopulation leading to chaos and misery” (Piketty 5). 1

Ricardo: The Principle of Scarcity

While David Ricardo had no “genuine statistics at his disposal” (5), he did have “intimate knowledge of the capitalism of his time” (5). He was concerned with the “following logical paradox”:

Once both population and output begin to grow steadily, land tends to become increasingly scarce relative to other goods. The law of supply and demand then implies that the price of land will rise continuously, as will the rents paid to landlord. The landlords will therefore claim a growing share of national income, as the share available to the rest of the population decreases, thus upsetting the social equilibrium (5-6).

Ricardo’s Solution: “A steadily increasing tax on land rents” (6)

 

Notes:

  1. Some quotes from Malthus: (Source: http://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Population)

    The way in which these effects are produced seems to be this. We will suppose the means of subsistence in any country just equal to the easy support of its inhabitants. The constant effort towards population… increases the number of people before the means of subsistence are increased. The food therefore which before supported seven millions must now be divided among seven millions and a half or eight millions. The poor consequently must live much worse, and many of them be reduced to severe distress. The number of labourers also being above the proportion of the work in the market, the price of labour must tend toward a decrease, while the price of provisions would at the same time tend to rise. The labourer therefore must work harder to earn the same as he did before. During this season of distress, the discouragements to marriage, and the difficulty of rearing a family are so great that population is at a stand. In the mean time the cheapness of labour, the plenty of labourers, and the necessity of an increased industry amongst them, encourage cultivators to employ more labour upon their land, to turn up fresh soil, and to manure and improve more completely what is already in tillage, till ultimately the means of subsistence become in the same proportion to the population as at the period from which we set out. The situation of the labourer being then again tolerably comfortable, the restraints to population are in some degree loosened, and the same retrograde and progressive movements with respect to happiness are repeated.

    (Malthus T.R. 1798. An Essay on the Principle of Population. Chapter II, p 19 in Oxford World’s Classics reprint).

    The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world. (Malthus T.R. 1798. An Essay on the Principle of Population. Chapter VII, p 6).

    Malthus’s Proposed Solutions:

    We may be quite sure that among plants, as well as among animals, there is a limit to improvement, though we do not exactly know where it is. It is probable that the gardeners who contend for flower prizes have often applied stronger dressing without success. At the same time, it would be highly presumptuous in any man to say, that he had seen the finest carnation or anemone that could ever be made to grow. He might however assert without the smallest chance of being contradicted by a future fact, that no carnation or anemone could ever by cultivation be increased to the size of a large cabbage; and yet there are assignable quantities much greater than a cabbage. No man can say that he has seen the largest ear of wheat, or the largest oak that could ever grow; but he might easily, and with perfect certainty, name a point of magnitude, at which they would not arrive. In all these cases therefore, a careful distinction should be made, between an unlimited progress, and a progress where the limit is merely undefined.

    “It does not… by any means seem impossible that by an attention to breed, a certain degree of improvement, similar to that among animals, might take place among men. Whether intellect could be communicated may be a matter of doubt; but size, strength, beauty, complexion, and perhaps longevity are in a degree transmissible… As the human race, however, could not be improved in this way without condemning all the bad specimens to celibacy, it is not probable that an attention to breed should ever become general”. (Malthus T.R. 1798. An Essay on the Principle of Population. Chapter IX, p 72).

Some Thoughts on Solidarity and Community

(I had written this article for our Save the UNT Library blog; I think it applies to more than just one cause and that is why I am sharing it here)

We live in a world constructed to force us to internalize our own insignificance. Every single day we go on with our daily activities, painfully aware that we are caught in an ever-expanding web of impersonal, totalizing power, a power that has, à la Foucault, no source, no origin, no head. Against this impersonal yet palpable power, our narratives of identification are also deeply structured by the images that we see and the stories we read or hear.

The greatest fiction perpetuated in this realm of financialized globe is the idea of individual subjectivity according to which, in the great scheme of things, the individual somehow masters his or her will and becomes a subject of his or her own movement up the so-called social ladder. This is the ideal narrative, for man and woman alone is the idealized object upon which this disembodied but potent power can work its magic.

So, we, having internalized these fictions of self, live our lives pretending to be free and individualistic while every night we enter our houses, close the doors and re-enter the world through the flat screens that offer us, virtually, the kind of world needed to keep us where we are: alone, powerless, and mostly unaware of our real state of being.

But self, and we all know this in a way, is always, as Bakhtin would say it, a “bridge thrown across” by another. That is why we seek symbolic and romantic recognition from the other: we become ourselves, so to speak, through the loving gaze, caring touches, and soothing words of the others. Love makes us who we are, but love always presupposes an other, or else all one has left is a destructive narcissistic self.

This insignificance that has now become a global way of life dictates our actions, polices our thoughts, and frames our self-narratives. We are always either too busy, too tired, or simply in too much of a precarious condition to do something, to say something. We even express our outrage in private, for the public, we have learned, is a dangerous space. In this world full of riches and plenty, when it comes to our self-worth, we have, somehow, learned to connect it to what we have and not who or what we are.

The question that we must pose to ourselves is simple: Are we noble? Yes, noble: an old fashioned word that has lost its significance in this world of enormous wealth and heartbreaking poverty and suffering. For if we are noble, we will, sometimes, stop to offer a word of kindness, a helping hand, a look that lifts someone’s spirit, an acknowledgment of the humanity of someone else, for, ultimately, it is only when we recognize the humanity of the others that we truly become human.

In this world, then, our only recourse, our only hope lies in solidarity with others, in being noble to each other. We also always imagine that the only form of heroism is something beyond the common scale, something monumental and since we conflate nobility with heroics, we also, always, find both the heroic and the Nobel beyond our reach. But heroism is not about scale, for anyone trained for years and given the biggest guns and tanks available can go and fight a war. True heroism, true nobility is the one we perform every single day: a smile and a kind word to the person who serves us our coffee, a thank you to a stranger who holds the door for us, a smile to someone who crosses our path. These are noble acts, acts that make us human and allow us to share our humanity.

This cause for the library started the very day sectarian violence claimed eight lives in my home town in Pakistan; In fact the city was under an indefinite curfew when we launched our Facebook page. Compared to that tragedy, attempting to save the library might seem like a mundane affair. But it is crucial to fight these fights, for we do not pick the scale of our fights nor do we choose what stands we would take and for what cause, but all we can resolve to do is to stand for something slightly larger than ourselves. I know, I know against the inexorable power that courses through the very fiber of this world, most of our efforts are doomed to failure, especially if we stand alone.

It is standing together, shoulder to shoulder (literally and virtually) that we send a strong message to the powers that be. It is in solidarity that we can learn to destroy the fiction of our flawed individualism. No, we do not lose ourselves into others: we rather stand together and share our energies so that the isolated oneness upon which rests the entire project of power is dismantled and replaced by a communal and loving way of thinking ourselves.

Save the UNT library movement is a great example of this solidarity, this power of the community: it is not a monumental cause, but a cause that has brought us together and taught us that in solidarity, in coming together for a cause we become more than ourselves. We become noble.

 

Geo News: Descent into Tantrums, Taunts, and Tastelessness

Like so many Pakistanis, I was shocked to hear about the assassination attempt at Hamid Mir. As someone associated with many public writing projects and as one who believes in the absolute freedom of the press, to me an attack on Hamid Mir was nothing less than an attack on all of us who voice our opinions against the powerful and mighty.

So, while my prayers and sympathies are still with Hamid Mir and so many others in Pakistan who put their lives at risk to keep the public informed, I now have strong reservations about Geo news since they have embroiled themselves in a silly war with those who have either challenged them or called them to question.

I have been watching Geo’s response to the case against them under consideration with PEMRA and now also the tone and virulence of their attack on Imran Khan, and I find their response childish, irresponsible, and reprehensible.

When I close my eyes and hear their phony challenges to Imran Khan and others to come debate them, all that comes to my mind is the image of an overfed spoiled brat who constantly wants more and more attention. It seems as if, somehow, through some cosmic intervention this entire network has been hooked to a massive, infantile id-driven monster, and no matter how much attention you give it, it always wants more.

Yes, freedom of press is absolutely necessary, but no democracy will ver allow the press to air uncorroborated rumors as news without any consequences. It seems Geo wants to have its cake and eat it, too. There is another side to the question of freedom of press: responsibility.

There is a certain hoarse childishness to Geo’s response to PEMRA as well as the statements of Imran Khan. I have been watching their continuous taunts and challenges to Imran Khan for his recent statements, which is sensationalist and might make sense to a twelve-year-old, but repsonsible journalism it is not.

Why was the army so incensed with the coverage of ISI after the attack on Hamid Mir? This question the Geo stalwarts have not bothered to ask. Was it only about the sanctity of the army as an institution, or that of its generals? I do  not think it was the latter.

Pakistan army is engaged in a war with the Taliban. This means that for the last ten years, eighty percent of Army cantonments are empty as men and officers are deployed in several regions of conflict. Those of you who have read my work before know that I am not an uncritical apologist for the army. In fact, some of  my writings have really alarmed some of my old friends. But my past criticism of the army notwithstanding, in these times one needs to be careful of what one impugns to the army, and the reason is simple.

Pakistan army is not a machine: it is made up of human beings. In most of the cases those human beings do not just follow orders, but follow the orders because they find them to be just. When the war against the Taliban was launched, there was a general crisis of motivation amongst the ranks that needed to be resolved. The crisis was religious: How to justify fighting against fellow Muslims who are fighting against America and who are fighting to establish a Muslim system.

So, the Pakistan army leadership had to redefine their role. They had to fist convince their soldiers that they were not fighting a proxy war for the US interests, but rather a war for the integrity of their own nation. They then had to posit the conflict not in the language of religion but in terms of rule of law. It was drilled into the minds of the soldiers and young officers that this war was about establishing the rule of law and the writ of Pakistani constitution and Taliban, by opposing the accepted law of the state, were, therefore, the enemies of the state. By and large this narrative seems to have worked.

By attacking the armed forces on flimsy evidence, Geo did not only jettison all forms of journalistic ethics, it also attacked the Pakistan army where this rhetoric hurts the very mission that the army has been engaged in. The logic is simple: If even the great institutions of Pakistan army are not safe from conjectural accusations, then, how would the media treat those in the lower ranks who put their lives at risk every single day. Furthermore, this “public trial” of generals further erodes into the leadership legitimacy that, when it comes to war against Taliban, rests on very precariously balanced narratives.

Similarly, the public spat between Geo and Imran Khan is another example of the infantile journalistic ethics that seems to be the mainstay of Geo group. In their pronouncements, the various Geo voices have insisted that Imran Khan should either prove his allegations in the courts or should come and face them on their TV shows. So, in one case they want Imran Khan, a politician, to follow some kind of journalistic ethic that Geo itself did not follow in reporting the attack on Hamid Mir, and in the other scenario they want a political leader to come into their staged TV show and offer himself for questioning. This is trying to have it both ways.

Over all, in this quixotic fight, as I watch the live streaming on my phone, Geo increasingly comes across as a spoiled rich kid stomping his feet and grinding his teeth asking for things that his opponents have no reason to give.

So, while I am not for banning any media channels or for putting journalists in prisons, I am also not very impressed with how Geo administration and its minions have behaved in this entire scenario.

I live in America, which has one of the freest (but corporatized) media in the world. Even here, where most programming is driven by ratings, the journalists never ever go after the armed forces without a hundred percent proof. By and large the media, sometimes more than required, mostly are very respectful to the armed forces and the logic is simple: the men and women of US armed forces put their lives at risk for their country and thus deserve due respect.

I would say the same principles should apply to the coverage of armed forces in Pakistan. It takes more than a good salary and good weapons to ask a soldier to run across a minefield and assault a heavily defended position. It takes a lifetime of care, love, honor, and respect.

This means that our soldiers should feel respected in their streets, villages, cities, mosques, and markets. All these acts of honor and respect are an investment–in so many indirect ways–to earn the right–as a nation–upon the lives of these men and it cannot just be done with a fat bonus. While this subjectivity of a solider takes a lifetime to construct and mobilize in the name of a nation, it can be very easily destroyed by one or two irresponsible and careless acts.

So, the reason the army is so incensed at Geo is not because Geo has, somehow, hurt the fragile egos of its generals, but that Geo has, inadvertently, weakened a fragile and precariously built system of motivation and morale.

No one who claims to be working in the best interest of Pakistan should do such damage and then hide behind childish and sanctimonious tantrums disguised under the general rubric of freedom of press. There can be no freedom of expression without responsibility!