With the recent development of the Occupy Movement, public criticism of neoliberalism has climaxed since the onset of a global financial crisis in late 2008. The mobilization of protesters in cities throughout the world was preceded by much speculation in the media and blogosphere over the past few years, where commentators have been quick to suggest that the end of neoliberalism is upon us. The validity of post-neoliberalism, however, remains tenuous, as its advocates continue to treat neoliberalism as a monolithic, static, and undifferentiated end-state. The ambiguity of post-neoliberalism forces us to recognize and appreciate such breaks from neoliberalism without losing sight of its continuities. This is why the current moment is so frightening, because a new hyphenated post-neoliberal era has not arrived and we may instead be bearing witness to the emergence of a new version of neoliberalism that substantially extends its content. The very notion of crisis consists, Antonio Gramsci once argued, “precisely in the fact that old is dying and the new cannot be born: in this interregnum, morbid phenomena of the most varied kind come to pass.” So while “neoliberalism is dead” insofar as it has run out of politically viable ideas, Neil Smith is also quick to point out that “it would be a mistake to underestimate its remnant power. . . neoliberalism, however dead, remains dominant,” precisely because “the left has not responded with good and powerful ideas.”
Thomas Piketty, professor at the Paris School of Economics, isn’t a household name, although that may change with the English-language publication of his magnificent, sweeping meditation on inequality, Capital in the Twenty-First Century. Yet his influence runs deep. It has become a commonplace to say that we are living in a second Gilded Age—or, as Piketty likes to put it, a second Belle Époque—defined by the incredible rise of the “one percent.” But it has only become a commonplace thanks to Piketty’s work. In particular, he and a few colleagues notably Anthony Atkinson at Oxford and Emmanuel Saez at Berkeley have pioneered statistical techniques that make it possible to track the concentration of income and wealth deep into the past—back to the early twentieth century for America and Britain, and all the way to the late eighteenth century for France. The result has been a revolution in our understanding of long-term trends in inequality.
The question is whether China can maintain rapid growth though somewhat slower than its recent breakneck pace, even as it reins in credit expansion which could cause an abrupt reversal in asset prices, confronts weak global demand, restructures its economy, and fights corruption. In other countries, such daunting challenges have led to paralysis, not progress. The economics of success is clear: higher spending on urbanization, health care, and education, funded by increases in taxes, could simultaneously sustain growth, improve the environment, and reduce inequality. If China’s politics can manage the implementation of this agenda, China and the entire world will be better off.
Piketty talks to a specific audience. Perhaps he hopes enough capitalists will be far-sighted and realize that open oligarchy may stimulate mass rebellion. He thinks there are good people like himself who care about democracy and understand that it must be paired with capitalism. In U.S. terminology, he is a liberal, on its left flank. The people next to them on the political spectrum hold the same beliefs but profess socialism in one or another cloudy version. These are the social democrats.They have had a rough time for a couple of generations. Capital, weakened by fundamental problems in its economy, became heavy-handed in a drive to raise the rate of exploitation. It dumped the old generation of social democrats whom it had coddled. A section of progressives are excited about Capital 21 because it might help revive social democracy. For the rest of us, Capital 21 provides solid data about the very rich. Piketty’s work is a demonstration of the adage, follow the money. Good advice. But when you need deep understanding of society, follow the labor.
Read also: Piketty’s Inequality – A “wicked” problem
From a labour market policy perspective, the dual education model also offers undeniable advantages over any other education system: First, it is always up-to-date. If the economy changes, or if production methods or provision of services change, trainees immediately learn to meet new demands. By nature, a predetermined school curriculum will always be behind the curve. Second, following every school education, each graduate confronts the necessity of a job search. This step in particular, is often no longer necessary after concluding an apprenticeship. Many young trainees simply remain employed in the company where they received training. The most important labour market policy goal is the prevention of youth unemployment. This is completely uncontested among all parties and the social partners. Here, the most effective tool is the so-called “apprenticeship guarantee”, a model which also guides the political endeavour of the European Union to implement the so-called “European Youth Guarantee”. The “apprenticeship guarantee” is a promise to each young person who wants to do an apprenticeship that they will be able to pursue such training if – despite the comprehensive support programme for companies offering apprenticeships – no vacant position is found.
In the 1990s, two young French economists then affiliated with the Massachusetts Institute of Technology, Thomas Piketty and Emmanuel Saez, began the first rigorous effort to gather facts on income inequality in developed countries going back decades. In the wake of the 2007 financial crash, fundamental questions about the economy that had long been ignored again garnered attention. Piketty and Saez’s research stood ready with data showing that elites in developed countries had, in recent years, grown far wealthier relative to the general population than most economists had suspected. By the past decade, according to Piketty and Saez, inequality had returned to levels nearing those of the early 20th century. Last fall, Piketty published his magnum opus, Capital in the Twenty-First Century, in France. The book seeks to model the history, recent trends, and back-to-the-19th-century future of capitalism. The American Prospect asked experts and scholars in the field of inequality to weigh in on Piketty’s argument and potential impact for policymaking on our shores.
Read also: Capitalism vs. Democracy
Thomas Piketty’s new book, “Capital in the Twenty-First Century,” described by one French newspaper as “a political and theoretical bulldozer,” defies left and right orthodoxy by arguing that worsening inequality is an inevitable outcome of free market capitalism. Piketty, a professor at the Paris School of Economics, does not stop there. He contends that capitalism’s inherent dynamic propels powerful forces that threaten democratic societies. Capitalism, according to Piketty, confronts both modern and modernizing countries with a dilemma: entrepreneurs become increasingly dominant over those who own only their own labor. In Piketty’s view, while emerging economies can defeat this logic in the near term, in the long run, “when pay setters set their own pay, there’s no limit,” unless “confiscatory tax rates” are imposed.
Read also: Capital in the Twenty-First Century
From Political Economy to Economics – Method, the social and the historical in the evolution of economic theory
In a new major work of critical recollection, Dimitris Milonakis and Ben Fine show how economics was once rich, diverse, multidimensional and pluralistic. The book details how political economy became economics through the desocialisation and dehistoricisation of the dismal science, accompanied by the separation of economics from other social sciences, especially economic history and sociology. It ranges over the shifting role of the historical and the social in economic theory, the shifting boundaries between the economic and the non-economic, all within a methodological context. Schools of thought and individuals, that have been neglected or marginalised, are treated in full, including classical political economy and Marx, the German and British Historical Schools, American institutionalism, Weber and Schumpeter and their programme of Sozialökonomik , and the Austrian School. Developments within the mainstream tradition from marginalism through Marshall and Keynes to general equilibrium theory are also scrutinised, and the clashes between the various camps from the famous Methodenstreit of the 1880s to the fierce debates of the 1930s and beyond brought to the fore.
Marx estava certo, por mais que economistas superficiais tentem negá-lo: causa das turbulências econômicas é enriquecimento sem-fim da burguesia. É surpreendente verificar que a extensíssima literatura produzida sobre as causas das crises atuais se tenha centrado tão pouco no conflito capital-trabalho (aquilo que costumávamos chamar de luta de classes) e sua gênesis no desenvolvimento da crise. Uma possível razão é a enorme atenção dada à crise financeira como suposta causa da recessão atual. Só que essa atenção desviou os analistas do contexto econômico, e também político, que determinou e configurou a crise.
Não é possível analisar cada uma delas, e a maneira como estão relacionadas, sem referir-se ao conflito capital-trabalho. Como bem disse Marx, “a história da humanidade é a história da luta de classes”. E as crises atuais (da financeira à econômica, passando pela social e política) são um claro exemplo disso.