Piketty and Inequality: Deeper than we thought-Your Thoughts?

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Thomas Piketty, a French economist has just published what many scholars are calling the definitive account of the historic evolution of inequality in advanced economics.   For those of us used to an economics profession that has either been a handmaiden to global capitalism, such as Hayack and his followers, or a group more interested in micro phenomena expressed in mathematical terms, it is refreshing to read a databased historical account of how inequality has grown under capitalism.  More importantly, Piketty describes the current situation and some thoughts, however gloomy on how to tame this form of capitalism so that it might be more democratic and not destroy democracy once and for all time. These few words from his introduction are the crux of his argument,

The history of inequality is shaped by the way economic, social and political actors what is just and what is not, as well as by the relative power of those actors and the collective choices that result…The dynamics of wealth distribution reveal powerful mechanisms pushing alternately toward convergence (less inequality) and divergence.  Further more there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently. (pp20-21)

Among the forces for convergence are knowledge and skills diffusion.  Higher Education is one of the mechanisms by which knowledge creation and diffusion is achieved.  But even in jurisdictions where strong investment is made in knowledge and skill diffusion, the forces of divergence are dramatically stronger. This is so for two reasons: first, top earners separate themselves quickly from the rest of income earners (as the recent Oxfam report on Inequality also shows ) and second, that the private rate of return on investment is higher than average economic growth.  This means that those with large amounts of capital become richer and richer while other become poorer or at best stagnate over time.  What these nearly 700 pages of evidence mean is that the present form of global capitalism undermines and makes it increasingly impossible for democracy to survive. From an economic perspective, the only way to put an end or at least to lessen the rate of the growth of inequality is to take progressive taxation seriously and to implement a tax on global capital flow.  What the chances for these measures are in our current era are sadly not promising.

What does this mean for Higher Education and knowledge democracy?  We welcome your thoughts as this appears to be the most transformative  economics text since Marx.  I see several implications. First, we have an obligation to study this evidence, share it with our students and colleagues.  We have the platform in each of our classes to do so. Second. We need to take a look at the role of Higher Education in providing access to knowledge and skills.  Piketty argues that Higher Education has failed to provide the democratic convergence that many of us might believe (485-486). Third, we need to increase the volume and further develop our arguments around knowledge democracy, cognitive justice and more radical approaches to engagement with social movements. Fourth, we need to support the work being done in the area of the social economy which is based on a linking of economics with democratic values.

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