Thomas Piketty in conversation with Mike Savage (Part one)

capitallogo95x95On the 8th of July 2015 Mike Savage interviewed Thomas Piketty about his work and his influential book Capital in the Twenty-First Century (which is sometimes referred to as “the book” in the interview). The interview has been transcribed from an audio recording. We will be publishing an edited version of the interview on the TCS website in three parts – it is also worth noting that a full transcript of the interview will be published later as a working paper by the LSE’s International Inequalities Institute.

Below is the first part of the interview which focuses on Piketty’s reflections on the issues arising from his book in potential future directions for extending his project. Parts two and three focus upon the underlying methodological and conceptual frameworks in his research and writing.

MS. So we will have a conversation about some of the issues arising from your book. And I know you’ve been in lots of debate about the book over the last year and a half, but what do you see as the new areas of research you want to get into? What are the main issues, which you felt you didn’t have time to get into with the book, which you want to tackle in the next few years?

TP. Maybe the most interesting impact of all the debate around the book, has been that now we have access to more data on emerging countries. In a number of countries in Asia, Latin America, it is now easier to access some of the historical data and fiscal data. And it’s partly because of the publication of the book and of the debates surrounding the book, there was stronger pressure put on government in Brazil, in Korea, in Taiwan, in Mexico, in Chile to say, well okay, why is Brazil not in the database? We are also making progress with Croatia and other Eastern European countries. So in many countries outside the sort of basic core OECD countries we are now able to access data, which we are not doing before. So that’s really one important area, which I am trying now to extend the database. With Russia and China it is still very difficult: governments here seem to fear transparency about income and wealth inequality even more than others.

MS. So it’s keeping the same models and approaches but extending the range? You expect to find some other things do you think?

TP. You know, I’m not really a model driven person. I think the history of inequality is always country specific, it’s really a way to readdress sort of core issues about the general political, social and cultural history of each country. I think each country is trying to deal with inequality in its own way and to address the basic problem of social equality with its own particularities. The history of inequality in South Africa is not the same as in France, it’s not the same as in Brazil where a third of the population was in slavery a century ago, 120 years ago. So it’s quite obvious that there’s no universal model. More generally I want to move more into the direction of this multi dimensional approach to ownership and to inequality, which I describe in my British Journal of Sociology piece. This is really what I’m trying to do already in this book, probably not enough because it’s difficult to address all these issues in a single book, but at least that’s my goal.

MS. One thing I thought reading your book back again quickly over the last week or so, the chapter on inheritance, which is mainly based upon French data, but in a way that’s where you’re pushing more towards more sociological, more anthropological arguments about inheritance, and there are a lot of issues there that would be really interesting to look at in a more comparative dimension, is that something that you want to do.

TP. Yes, I would love to do that now. The data on inheritance sometimes is even more difficult to get than the data on income, but inheritance pattern really involve deeper family structure and representation of family roles and gender roles, so you know, dowries in India today are not the same as dowries in India centuries ago, or in France at the time of Balzac as today, and I would love to be able to study these issues in a more comparative international perspective.

MS. Well I think it strikes me, think about the British context, and I don’t think we know much really about inheritance in the UK, I mean obviously your research gives us some patterns but, and I think one of the issues raised by your book is you describe the patterns really well in the world, but it’s how people themselves understand these issues, which is also very important. And I still think it’s the case that the figures you give about the numbers of people who can expect to inherit a lot is quite high, but whether people themselves are actually aware of this. A lot of people think actually the inheritance gets spent looking after old people and it may not actually be translated to me. So it seems to me trying to pin together people’s subjective awareness as well, or thinking about these issues with the patterns, which you describe could be a really important angle to take.

TP. Yeah, I agree. I think also that we have a dual return of inheritance, a form of wealth transmission, which we associate to sort of the old times and which I think are part of the future together with more modern forms of inequality and inequality in access to skills, universities etc. So the future is made of a combination of these old forms of inequality with new forms of inequality, and those are different with the return of inheritance today involves a bigger, larger group of sort of medium inheritance, medium to high inheritance returns and a smaller group of really high inheritance. So of course you have your group with really high inheritance but they are rare. But you have a large group of people who don’t inherit enough to stop working and maybe also they don’t want to stop working because they want to show their merit and they want to show their–, but in any case they don’t inherit enough so they couldn’t do that. But still they inherit enough so that just through their inheritance returns they might get as much as half of the population through their labour income for their life. So this is a form of inequality, which is different from the sort of traditional patrimonial type of society where a small group of the population inherits enough to just stop working entirely. Now it’s different, it’s a combination, now typically you inherit £500,000, that’s not enough to stop working because you still want to have a good degree and a high paying job, but that’s more than what half of the population is going to make in their whole life on the minimum wage.

MS. So we need to go beyond the one per cent towards the bigger proportion of–,

TP. Yes exactly, we need to look at these broad groups, and in a way that’s much more difficult to regulate because with the one per cent you have the illusion or the feeling that you can get them out basically, which the aristocracy in France was one per cent of the population. Now when it’s inequality between ten per cent of the population and 50%, you know, you’re not going to cut the head off 10% of the population.

MS. One of the things of course, which your work has really argued very strongly and it’s very convincing, was this sort of U shaped curve and the return of the patrimonial society. And as a sociologist that is very inspiring for me because the question, which I think we need to be asking is what kind of new elites are forming, and how similar or how different are they to the old aristocratic elite? Are we seeing the formation of a new aristocracy or something like an aristocracy, or is it a different kind of wealth elite? I mean one of the important shifts, what are the important differences between the old elite of Belle Époque and the new elite is presumably the way in which family dynamics work, the old elite would have been male dominated, the women wouldn’t have worked, inheritance would have gone through the male line. I guess one of the big differences now is it’s a very different dynamic, the roles of the families, women are often working, are often in high status jobs. And so I guess, it would be interesting to hear your thoughts on this, the inheritance dynamics would be different from how you might have found them, and the dynamics of reproduction might be different than you might have found them in the early 20th Century, or not?

TP. I guess one of the main differences between the new elite and the old elite is that the new elite in a way, you know, they want to have it all, they want to have the wealth and the merit, and they want to have the wealth and the virtue. Well I guess the rich have always been seeking for virtue, but I guess the new elite is unruly, violent in their way of assessing that basically they are where they are because they have the merit and the poor are where they are because they have low productivity and little merit and little effort. And these are some things that you sometimes hear at international level as well with lazy Greeks and hard working Germans or whatever. But within a country this is basically the same. So that’s partly related to what I was saying before, is that if you don’t inherit enough to just stop working then you need to combine high wage with high inheritance. But I think there’s more than that, you know, there’s a very interesting discourse that I quote in my book in chapter 13 by the founder of Sciences Po, and so that was right after the expanse of the commune, which was very traumatic at least for the elite, a very traumatic experience of redistribution in France. And so he has a very clear way to explain, well okay, now that we have universal suffrage, there’s a risk that basically the poor and the majority of the population will try to expropriate us, the elite. We have to display merits and our own standings so that it will be a completely crazy idea basically to get rid of us. So in a way it’s as if the meritocracy, the modern meritocracy discourse is invented as a way to protect the elite from democracy basically, from the universal suffrage. And he has a way to put it, which is very interesting, because at the same time Sciences Po is a private institution with very high tuition fees where it’s difficult to access if you’re not from the elite. So in the end this is the same elite in the sense that if you don’t come from a high income group it’s very difficult to access this elite, but in terms of discourse it tries to present itself as based on merit.

MS. And that’s different from the old elite, where there is a distinct status space and you couldn’t get into that elite if you hadn’t been born into it to a large extent I guess. I mean the meritocratic elite is the idiom, is the ideology I think rather than the reality. But this is an interesting point because you do use the idea of merit in your book, and one of the readings of your account is to say that inequalities in the labour market, inequalities in income are reasonable because they do affect the way the labour market works and the market for skills. It’s when issues of inheritance and wealth become important that the meritocratic sort of breaks down, would that be fair do you think?

TP. Well that’s what the winners of the game always try to pretend. Now is it justified? Well you know, I think all of the sort of popular discourse about inequality are always partly self serving and partly contain some interesting elements of truth or at least of experience, which are interesting. At least, I think they are largely self serving, in the book I refer to this as what I call meritocratic extremism. This very extremist way of presenting labour market outcomes as being fair. There are several ways to sort of unveil the mask and the discourse. One way is to show that the very high inequality, of course, in access to more privileged educational tracks, so I give data in my book showing that if you take the average income of the parents of Harvard University right now in the US you get the average income of this group is equivalent to the average income of the top two per cent of the US distribution of family income. Which doesn’t mean that nobody from outside this top two is going to Harvard, but it means that those who come from outside the top two are so few and those who come from the top two are so high in the top two that the overall average is as if all students have been picked at random within the top two. For Sciences Po in France I use the same data, I get the top nine per cent, which is a somewhat bigger social base for recruitment, but still it has little to do with equal opportunity. So I don’t know what at LSE would be the number but–,

MS. It would be more like the American model.

TP. Yeah, maybe in between. Maybe closer to Sciences Po than Harvard, I don’t know, it will be interesting. So I think it’s important to study this, because this is one area where the gap between the official meritocracy discourse and the reality of what we see is particularly striking. So to me meritocracy is more a discourse that’s used to justify inequalities than the reality. In theory you could imagine a world where people choose different careers whereas you cannot choose a different level of inherited wealth. Except that in order to choose your career you need to have access to education, you need to access the same network, which in practise you don’t.

The second part of this interview will be published next week on the TCS Website

Readers may also be interested in the Theory, Culture & Society Special Issue on ‘The Social Life of Methods’ that Mike Savage recently co-edited with Evelyn Ruppert and John Law (TCS 30.4, July 2013)



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