Picketty, Rifkin and Sassen

In 2010 Professor Greg Philo, Research Director and one of the leading lights of the Glasgow Media Group asked why – amidst all the discussion of the deficit – there has been so little discussion in the media of how much wealth we had in Britain.  The truth, of course, was that we were the sixth richest nation on earth in 2010 with total personal wealth of £9,000bn. As Philo pointed out, this sum was comparable at the time with the national debt.

Naturally, wealth is overwhelmingly concentrated at the top. The richest 10% of Britons own £4,000bn, an average of £4m for each of the richest households.  The poorest half own less than 10% of Britain’s wealth between them.

Most of the wealth owned by the richest 10% is held in property and pensions that would be relatively easily taxable.  So Philo proposed a one-off tax on the very wealthy to wipe out the national debt at the time.  A simple 20% would have done the trick.  It would have raised £800bn and since much of the deficit was made up of interest on the national debt it would have dealt with that too.

Picketty's masterpiece 'Capital in the 21st Century' (published in English - March 2014) makes the same proposal - on a global scale - coupled with other drastic reforms. But his argument is based on a profound study of the fundamental characteristics of capitalist development over the last two and half centuries. The heart of Picketty's work is a vast and meticulous empirical, data driven study of wealth in capitalist countries. His conclusion is that 21st century capitalism's patterns of accumulation of wealth have fallen back into much earlier conditions where wealth accumulation has become greater than the total sum of societies' productive value. This is an inherently unstable and potentially explosive condition.

He points out (the evidence is unassailable) that the 20th century showed the reverse of this earlier trend which he accounts for by the World Wars etc. Wealth was much more evenly distributed as a result in the 20th century than it was in the 19th or the 21st.

Picketty rejects Marx's claims in the Communist Manifesto that capitalism's internal contradictions will bring its downfall. And he associates the narrowing of wealth differentials in the 20th century with the rise of Social Democracy. I think that both these ideas are wrong. I think it can be shown that Marx's views on the overthrow of capitalism went through an evolution from the Communist Manifesto onwards; that wealth differentials in the 21st Century have much more to do with the revolutions in Russia and China and the wars designed to defeat them then Picketty suggests; that Marx's concept of the changing ratios within the organic composition of Capital itself form a structural part of Picketty's observations. (More on this later.) Nevertheless, his insight and the spotlight now focussed onto the evolution of wealth in capitalist society has literally overturned the debate in world economics.

Rifkin, who the BBC calls an 'Advisor to the EU and other Heads of States' and who is President of the Foundation on Economic Trends' has also written an interesting book. The Zero Cost Society; The Internet of Things; The Collaborative Commons and the eclipse of capitalism' is a new utopian sketch of post capitalist non profit orientated economics, based on recent technological advance. Rifkin thinks that the 25% of Germans who now produce their own electricity are the harbingers of a future where more and more people and more and more types of production and general economic activity, will fall out of the market. Rifkin seems to imagine that this process is automatic, that the 'classless' neutrality of technology will push open all of the closed doors. He clearly has great faith in the urban middle classes!

But despite Rifkin's inability to grasp the social facts of life, his suggestions and examples of collective use-based productive and economic activity by the 'commons' - based on the imaginative use of collectively available technology, offers more than a hint on how to overcome some of the negative experiences of 'revolutionary' central planning and of state nationalisations that weigh so heavily on the 150 year history of the anti-capitalist struggle. We can see in this work the beginnings of the conditions where the withering state is left simply to manage the 'adminstration of things.'

Saskia Sassen is a professor of sociology at Columbia. What she has noticed in 'Expulsions, Brutality and Complexity in the Global Economy' is not so much the voluntary and beneficent detachment of people from the market, but rather how the new post welfare state, post Roosevelt conditions of the 21st century savagely cuts whole sections of society and the world loose from the capitalist mainstream, 'basket cases' as that charming patrician Douglas Herd once opined. Sassen's thesis of course connects back to Picketty's argument. What used to be called 'third world' conditions are now visible in the metropolitan centres of the most advanced countries (as wealth has also created its own enclaves amid impoverishment in less developed countries.) And what Sassen underlines is that the new demarcations are savagely policed. The people who are the victims of this process are of course the exact opposite of Rifkin's 'collaborative commons.' They are often literally fighting for their lives, often persecuted by religious and criminal warlords for their pains. Socialism or barbarism asked Rosa Luxembourg? It turns out that, among other things, Picketty's 1% will be remembered for pushing large parts of the world's population into concentration camp conditions.