Thomas Piketty (Reuters/Charles Platiau)

The right's Piketty nightmare: Coming of age in the era of Post-Exceptionalism

If conservatives want to ignore his warnings about inequality, we're not the only ones who'll suffer. They will too


Tim Donovan
April 24, 2014 9:30PM (UTC)

For most Americans, reports of our yawning, fast-expanding wealth gap only confirm what we've already seen and experienced in our own lives. If your job or industry has evaporated due to technological change or automation, if you've watched your factory position get shipped oversees (oftentimes offered, in one final bit of cruel irony, to train your foreign replacements first), if you've graduated from college or grad school in the past decade, only to find a nation with far too many applicants and far too few positions -- reports on the existence of two Americas, one for the "haves" and one for the "have-nots" will not surprise you.

We are living in the Age of Post-Exceptional America.

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An unavoidable fact of life in modern America, our growing inequality of income and wealth has eroded this nation's middle class and its economy, like a cavity or a tumor. Crucially, this disruptive inequality continues to expand, as confirmed by an increasingly large body of research from sources as varied as an obscure French economist (turned bestselling author) to the front page of the New York Times.

In the Times, David Leonhardt and Kevin Quealy report on new data from the "Luxembourg Income Study Database," which shows that America's middle class -- long the wealthiest in the world -- has been surpassed by the middle classes of much of Western Europe and Canada. Basically, they explain, while Wall Street booms and corporate profits soar, the wealth of average Americans is stagnant or fading. As Leonhardt and Quealy put it,

The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.

The authors are careful to note that their research only goes to 2010, but there's no reason to think that these trends haven't continued in the years since -- or that they won't continue in the future.

America's recent economic "growth," a mirage caused by gains made by the absolute richest of the rich, has also been recently outlined by French economist Thomas Piketty, in his "magisterial," "seminal" and "definitive" book, "Capital in the 21st Century." For liberals who've been beating the drum of inequality's democratic and economic dangers for years (and in some cases, decades), Piketty's book provides the intellectual firepower to firmly defend these assertions. And beyond writing a popular and highly influential book, Piketty (and his associates Emanuel Alvaredo, Salvatore Morelli, Sylvain Riffe Stern and Paul Segal) have compiled the "World Top Incomes Database," an in-depth source of historical data on income inequality that researchers have only begun to explore.

While Piketty's book provides compelling evidence of the shocking, destabilizing expansion of wealth among the richest of the rich in the modern world, it's also been vitally important in reframing inequality as the struggle between capital and labor. In his long and glowing review of the book, New York Times columnist and Pulitzer Prize-winning economist Paul Krugman outlines why this is so important:

The general presumption of most inequality researchers has been that earned income, usually salaries, is where all the action is, and that income from capital is neither important nor interesting. Piketty shows, however, that even today income from capital, not earnings, predominates at the top of the income distribution. He also shows that in the past — during Europe’s Belle Époque and, to a lesser extent, America’s Gilded Age — unequal ownership of assets, not unequal pay, was the prime driver of income disparities. And he argues that we’re on our way back to that kind of society.

Indeed, in his book Piketty seems almost eager to provoke: From the outset, he dives into the political and social implications of his findings, asking rhetorically in the book's introduction,

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Will the world in 2050 or 2100 be owned by traders, top managers, and the superrich, or will it belong to the oil-producing countries of the Bank of China? Or perhaps it will be owned by the tax havens in which many of these actors will have sought refuge. It would be absurd not to raise the question of who will own what and simply to assume from the outset that growth is naturally "balanced" in the long run.

Conservatives can smear Piketty as a "Marxist," or argue that liberals enjoy his findings because they confirm a set of preconceived notions, but what conservatives can't do is provide credible solutions to our yawning inequality that have any basis in historical reality. At some point, conservative politicians will likely be forced to accept that redistributive economic policies are necessary if we want to fix our economy long-term (an admittedly impossible proposition in 2014). Conservative politicians who refuse to undertake this evolution will be left supporting a set of toxic, increasingly unpopular policies that encourage the worst vision of America -- a land of massive, walled-off wealth surrounded by a sea of falling wages, rising prices, shrinking job opportunities and diminishing horizons for all but the very richest.

This is the America that most of us live in, and these are the challenges that most of us face. The sooner our politicians and media acknowledge this dark reality, rather than maintaining some idyllic illusion of greatness invented from generations past, the sooner we can start working to create new jobs, raise stagnant wages and restore the economy for the rest of us.


Tim Donovan

Tim Donovan is a freelance writer who's work has appeared in various publications including VICE, Al-Jazeera America, AlterNet, and Mic. He lives in Queens, New York. Follow him on Twitter at @tadonovan.

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