Analysis

Unlike Marx, Thomas Piketty wants to save capitalism: Don Pittis

Whether or not you've read his popular book, economist Thomas Piketty shows in a CBC interview that he wants to save capitalism, not overthrow it, Don Pittis writes.

Calling Thomas Piketty a Marxist proves you haven't read the book

Thomas Piketty's opponents liken him to anti-capitalist thinker Karl Marx, but those criticisms are unfounded, Don Pittis writes. (Reuters)

He's been called the new Karl Marx. And although it may disappoint both his boosters and his strongest opponents, I can prove that Thomas Piketty is out to rescue global capitalism, not destroy it.

But I can also prove that one of the things Piketty said in his CBC Television interview this week is absolutely false. And since both proofs do not involve wading through his weighty bestseller Capital in the Twenty-First Century, they have the advantage of being accessible to everyone.

This is more useful than you might think, because as we've seen with other complex bestsellers, few people actually read them. Not even the people who have them on their bookshelves. According to the BBC, world-famous physicist Stephen Hawking's A Brief History of Time is not just a top seller. It has also earned "the dubious honour of being the world's most unread book."

As Piketty himself said this week, the fact that people have not read his tome has done nothing to prevent them from adopting strong views about it. "The good thing about the success of the book is that many people read it, but the bad thing is that many people are writing or talking about it without even opening it," says Piketty.

"I can do nothing at all for people who don't read books," he said. 

And this is where I catch Piketty in his fallacy, because in a clear and even amusing conversation with my friend and colleague Amanda Lang, the à la mode French economist spells out the essence of his point of view very clearly — no book reading required.

Right-leaning publications have characterized Piketty's new book as the modern answer to Marx's DasKapital. "Bigger than Marx," bellowed the Economist. "Piketty's decaff Marxism would be just as oppressive," says the Spectator. 

Left-leaning commentaries have been just as quick to celebrate the French academic as a champion of the revolution.

The most outstanding feature about Piketty's responses to Amanda's close questioning is that Piketty is a dyed-in-the-wool pro-capitalist. "I am very much in favour of private property and private capitalism," he told her. "Making people invest in their businesses, making more people capitalists and owners, that is exactly what I am pushing for."

Amanda knows her subject and has interviewed some of the world's top economists and captains of industry. She was impressed with Piketty as someone looking for solutions. "Clearly, he's not an ideologue," she told me after conducting the 20-minute interview.

The element of Piketty's analysis that has attracted the most attention has been his support for the redistribution of wealth. But the reasons are far more interesting.

Rich getting richer

The cornerstone of his analysis is that currently the return on capital is higher than the world's growth rate. Effectively that means the small number of people who own most of the wealth will continue to take a bigger and bigger share of everything the world produces.

He says that is not only destabilizing but unnecessary.

"We don't need extreme concentration of wealth to grow," says Piketty. In fact he points out that in the postwar boom years, wealth was far less concentrated. And rather than simple handouts of wealth from the rich to the poor, he says a key part of any redistribution is higher investment in education and skills "so that people can have access to high productivity and high-paying jobs."

Most revealing was Piketty's response to Amanda's question about the "worst case scenario" if the trend toward growing inequality continues. The answer? Well, if a large part of the population begins to feel that only the very rich are getting the benefits, "then the risk is that some countries will choose to turn against globalization," says Piketty.

So there it is — Piketty is not just a capitalist, but a global capitalist. And a fairer distribution of capitalism is not a means for overthrowing global capitalism, but a means of saving it.

But don't listen to me, watch the interview here. And then, if you really need to, you can read the book.

About the Author

Don Pittis

Business columnist

Don Pittis was a forest firefighter and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.

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