Reviews 173

Piketty: The Agenda for Economics and

Inequality write, Piketty has continued the
Andrew Elrod tradition of growth economics — but in a
You Might Call It Wealth backward way. Unlike his predecessors, Pik-
etty doesn’t aim to provide policy tools for
Heather Boushey, J. Bradford DeLong, and managing the expansion of the economy.
Marshall Steinbaum, eds. After Piketty: The Agenda Instead, his data and equations explain why
for Economics and Inequality. Harvard University worsening inequality is inevitable and nor-
Press, 2017. mal. No matter what tools you use, Piketty
suggests, growth may never deliver equal-
What aspec ts of the economy are under ity. Wealth always accumulates at a greater
our control? According to John Maynard rate than that of economic growth, an argu-
Keynes, if interest rates are low enough to ment he made famous with the formula r>g
keep investment flowing and consumer (in which r is the rate of return on capital
spending high enough to maintain sales, and g is the rate of economic growth gener-
everybody can be put to work. Businessmen ally). Absent a world war or unplanned cata-
will never lose their confidence, and their clysm, market economies as a rule bestow
property will never be idle. The economy, in increasing largesse on a minuscule portion
other words, could be manipulated to yield of the population while leaving most people
desired outcomes: manageable growth, full comparatively poor. We can’t control the
employment, and the boom and bust of a distribution of growth, Piketty says; we can
business cycle smoothed out of existence. only “counter the effects of this implacable
During World War II and the three logic” by making the post-tax distribution of
decades that followed — the so-called golden wealth and income more equal.
age of capitalism — American and British Although Piketty’s ideas come out of the
economics departments reworked Keynes’s confident tradition of postwar growth eco-
observations into a formula for endless nomics, his provocations suggest as many
expansion. Under the right conditions, they disagreements as certainties over the pre-
argued, society could create as much wealth dictive authority of social science. The mod-
and income as it wanted. Fiddle with taxes ern subdiscipline was born when profes-
correctly and you’ll ensure the right amount sional economists entering graduate school
of private savings and investment. Growth in the 1940s wove together three intellec-
could be “balanced,” each group’s share sta- tual traditions: the vogue for Keynes; data-
ble into the future. It was like calculating driven analysis of business cycles, which had
the propulsion for rocket trajectory: adjust- flourished in the 1920s; and an older, more
ment by economic telemetry would guar- speculative practice of considering long-
antee optimal flight. These were the tenets run tendencies in modern civilization. This
of growth economics, a field of academic combination gave growth theorists a the-
inquiry fused with policy proposals that ory of history and a kind of economic geol-
would come to define midcentury liberalism. ogy: each business cycle deposits a layer of
More than half a century later, Thomas capital — buildings, machines, infrastruc-
Piketty’s 2013 Capital in the Twenty-First ture, knowledge — and whatever is not swept
Century is the discipline’s most lauded, yet away in an economic downturn becomes
apostate, progeny. As the editors of After an economy’s “growth path.” This sediment
 174 Reviews

is generated from existing deposits — you

need capital to make capital — but explana-
tions for where and how it accumulates, in
whose interest, and subject to what direc-
tion have varied according to whom you
ask. Like many historians, economists have
traditionally read data through the cultural
lens of the moment. In the 1950s, they fore-
saw a sturdy future of bountiful equality.
In the ’70s and ’80s, they saw a turbulence
at once unpredictable and self-correcting.
Today — after decades of slowed growth,
the severing of real wages from productiv-
ity, and the serialization of acute financial
crises — many foresee a prolonged, irreme-
diable endurance trial.
After Piketty, edited by a trio of Demo-
cratic Party economists from the Clinton
Treasury Department and the greater policy
establishment of union-backed think tanks
and research philanthropies, convenes a
number of social scientists to debate Pik-
etty’s work and the assumptions of growth
“If you want to know what the left
theory. Meaningfully, the book appears at a
is thinking, read Dissent.” moment when the very idea of “controlled
—National Review growth” — the ability to control the rate of
private investment to meet national income
targets and avoid economic crises — is in
question. Are we doomed to live in a cycle
of apocalyptic economic scenarios beyond
our control? Some of After Piketty’s con-
tributors suggest that Piketty’s pessimism is
misguided and revert to postwar ideals. Oth-
ers affirm the pessimism without providing a
plan for overcoming it. A third group, frus-
trated by the discursive trap of econometric
thinking, abandons growth theory altogether
and turns instead to the history of institu-
tions — the law, the administrative state, the
presidency — to understand the economy.
n+1 readers take Today the American “agenda for econom-
half off new subscriptions at ics and inequality” remains trapped within
dissentmagazine.org/nplusone the framework of tax incentives to chan-
nel private savings and investment. These
 Reviews 175

frustrated anti-economists break through or further moneymaking, thereby raising

that framework, seeing the economy as a the standard of living and transforming the
creature of history. For the second time in nature of work.
forty years, influential liberal economists Keynes gestured toward a role for central
have begun to speak the language of class government planning in investment deci-
struggle. Implicit in it is the possibility of sions, writing that “the duty of ordering the
a long-foreclosed approach to managing current volume of investment cannot safely
growth, productivity, and inequality: demo- be left in private hands.” But his American
cratic central planning. students, reared in a cold war context that
made central planning anathema outside
During World War II, the nation’s work- the defense sector, shrank from this part of
force and wealth were subject to coercive Keynes’s vision. Growth economists like
but democratic government control. give Robert Solow, one of Keynes’s American
’em both barrels, reads a 1941 poster interpreters, believed that since techno-
from the Office of War Information: the logical change led to increased productivity,
first barrel is a machine gun, the second government spending on research and edu-
a pneumatic riveter. The excitement that cation was a sure if indirect tool for manag-
met Keynes’s General Theory of Employ- ing growth. “Economic science ought to set
ment, Interest and Money after the war was certain ground rules of philosophical and
due in part to his suggestion that wartime ideological discussion of economic institu-
economic goals could be pursued without tions,” he explained in 1970, with implications
wartime coercion. American Keynesians in marked contrast to Keynes. His “science”
wanted to preserve private ownership of displaced government control of investment
the means of production while pursuing decisions and the pre-tax distribution of
public imperatives such as full employ- income from the liberal policy agenda, as it
ment and maximum output. If employment directed most policy focus toward research,
depended on business’s profitability, and if development, and education.
business made investments according to This approach wasn’t uncontroversial
the spending power of consumers, then among Keynesians. In the 1960s, the ques-
possible shortfalls in employment could be tion of how to influence the rate of growth
met with increased government spending prompted one of the most storied debates
(as opposed to Soviet- or Fascist-style pro- in economics, the Cambridge capital con-
grams of forced labor, or the parliamentary troversy. The affair involved both left-wing
socialist method of legislating government Keynesians at Cambridge University and
ownership). Government stimulus would neoclassical cold warriors in Cambridge,
put more money in the hands of consum- Massachusetts. The former, led by Joan
ers, which would encourage consumption, Robinson and her colleague Michał Kalecki,
and in turn drive demand and create jobs. were among the principal supporters of cen-
Lowering interest rates would also allow tral investment planning, which could pre-
entrepreneurs to borrow money on easier vent the investment process from siphoning
terms to produce more machines. Capi- off income for the preservation of private
tal would accumulate to a level of abun- wealth. The modern banking system, they
dance at which it could be consumed or saw, had a tendency to operate as a sort of
invested for purposes other than survival dual politburo-casino. Both contemporaries
 176 Reviews

of Keynes, Robinson and Kalecki supported 4.6 percent.* But the situation did not last.
Fidel Castro and Kim Il-Sung and praised Solow and Samuelson did not anticipate the
the superiority of state-directed develop- new investment opportunities that emerged
ment in third-world nations over the US’s simultaneously in Europe and the third
method of influencing investment decisions world. Business managers, flush with cash
indirectly through the tax code —  forms and facing a still-organized working class,
of control that would presumably remain closed factories in the US and opened new
chaste, if not liberal. operations abroad.
Their principal opponents in the United Solow’s 1964 world didn’t account for
States were Solow and Robert Samuel- asset bubbles. At the time of the Kennedy
son, who prided themselves in mentoring tax cut there hadn’t been a financial crisis in
President Kennedy. Samuelson described the United States for thirty-five years. Capi-
Joan Robinson’s polemics against Ameri- tal was always valued accurately by markets,
can growth economics, with its fixation on it was assumed, and necessarily represented
class, as a “power theory” that was “unreal- a real income stream from planned future
istic and naive.” Both he and Solow defined production. But by the 1980s, after the Fed-
themselves in opposition to Marxism. eral Reserve and Congress intervened to refi-
Ensconced in power themselves, Samuelson nance insolvent industrial and banking cor-
and Solow developed theories for existing porations — raising interest rates to attract
American institutions, which notably lacked investment, reducing reserve requirements
any permanent planning agency capable of to expand bank credit, and arranging private
targeting investments or influencing corpo- refinancing deals for the Penn Central Trans-
rate management decisions (save the Pen- portation Company, Lockheed, and New
tagon and the New Deal–ized Department York City, among others — it was clear that
of Agriculture, which sets annual prices and our system was incapable of allocating capi-
quotas for our various farm commodities). tal efficiently, or even pricing it accurately.
The primary challenge of hands-off tinker- As Solow remarked when he received the
ing, American-style, was how to guide dif- Nobel Prize in economics in 1987, “One of
fuse private investment decisions in a way the achievements of growth theory was to
that would ensure the updating of industrial relate equilibrium growth to asset pricing
plants, generate jobs, and sustain growth. under tranquil conditions.” In other words,
Solow and Samuelson imagined (unre- private investment and distribution goals
alistically and naively) that private man- could be made objects of indirect planning
agers would respond to higher wages and if capital markets sent meaningful signals
lower taxes by upgrading machinery to about social priorities. But “the hard part
raise productivity. The Kennedy tax cut of of disequilibrium growth is that we do not
1964 — the MIT-sponsored “trial” of postwar have — and it may be impossible to have — a
Keynesianism in Washington that Solow really good theory of asset valuation under
helped plan — did achieve full employment turbulent conditions.” High securities prices
for the first and last time since the Korean might signal that a corporation or munici-
War, as well as an annual growth rate of pality was satisfying public wants through

*The Kennedy tax cut had been proposed in 1963, but was passed by Congress and signed by Johnson after Kennedy’s
assassination.
 Reviews 177

its provision of sales or services — or that it long run. Capital does in fact exhibit falling
had been thrown on the betting table or the “real” returns, he argues, and he demonstrates
chopping block. Profits and profitability in his point by removing capital gains from the
the capital market, it turned out, no longer measurement. In the history of economic
told us anything about what kind of prod- thought, “the long run” has been a bludgeon
ucts and services the public wanted to con- to wield in a policy fight, and here Raval uses
sume and how. Maybe they never had. it to argue against a global capital tax, the
most radical solution to global inequality Pik-
Piket ty’s empirical measurements of the etty proposes. A global tax would ultimately
historical distribution of income in Capital reduce labor income, Raval says, since a
in the Twenty-First Century were shocking, wealth tax would discourage investment and
but his conclusion that inequality intensi- employment. Besides, if the inequality that
fies with time falls squarely within the earlier has racked the past two generations will end
growth-economics tradition. Piketty demon- as capital income falls, as Raval argues it will,
strates that the rate of return to the aggregate we may as well go along to get along.
capital stock — the dollar increment by which Raval goes to such lengths because the
the total value of all property increases each stakes are high, for economics and for
year — has hovered around 4 to 5 percent over policy. Piketty’s empirical observation of
the past two hundred years. Meanwhile, there steady returns to the abstract total capital
is simply a greater capital stock (i.e., more stock poses an existential problem for the
wealth) than ever before. The observations discipline, as it contradicts one of its most
pose a problem for classical economic theory, ubiquitously taught maxims: that price var-
which holds that the more wealth there is, ies inversely with quantity. It is the trout in
the less scarce and cheaper it becomes, and Thoreau’s milk, evidence that the savings-
therefore the harder it is to ensure a steady returns story of the distribution of economic
rate of return. So how has the rate of return growth — which posits that social wealth
held steady even as the total amount of capi- grows when people invest their private sav-
tal has increased? Piketty believes that tech- ings for profit — might not be as predictable
nological innovations — fertilizer, hand tools, as we expected. Why does capital income
machinery, “robots” — have enabled a larger remain so high when capital itself should be
stock of capital to continue to be productive. cheaper? Why does the production of wealth
And according to the methods of Solow-style distribute more evenly in some moments in
macroeconomics, this is the only explanation history than in others? Returns to capital
that exists. in the aggregate, it turns out, have had little
But what if capital in the abstract has not relationship to real investment, employment
been “more productive”? According to neo- levels, or the distribution of income within a
classical theory, this would mean the fifty- given society. As Emmanuel Saez, an origi-
year trend toward rising capital income in nal partner in Piketty’s research enterprise,
the historical data is merely an aberration. explains in his contribution to After Piketty,
In his contribution to After Piketty, Devesh “There is no compelling evidence that the
Raval, a former economist for Amazon who countries that lowered their top marginal
is now on staff at the Federal Trade Commis- tax rates and experienced large increases in
sion, tries to pin down the effect of technol- income concentration had a better growth
ogy on capital, both in the abstract and in the experience since the 1960s.”
 178 Reviews

The implications may seem radical in the were employed by Equitable Growth during
aftermath of the Reagan, Bush, and Trump the book’s gestation; the third, J. Bradford
tax cuts, justified as incentivizing “job cre- DeLong, a former Clinton White House offi-
ation” among the beneficiaries, but they cial and professor of economics at the Uni-
shouldn’t. When economists aggregate all versity of California, Berkeley, is a frequent
the various types of capital into a single collaborator. (I received a research grant
quantity — corporate paper, equipment, pat- from Equitable Growth in 2016.) The out-
ents, real estate, et cetera — they make it fit has found itself in the difficult position of
impossible to know whether the right tax trying to restore that technocratic optimism
incentives will channel this abstraction into in a moment of profound intellectual disar-
labor income, productivity, or growth. Most ray. At one of the organization’s research
often, liberated capital flows into asset bid- conferences in September 2016, for exam-
ding, more debt, corporate stock buybacks, ple, a former editor of the Journal of Politi-
dividends, and idle cash to be hoarded. You cal Economy could be heard denouncing “the
might call it wealth, but you’d need the right incompetence of the Fed to create negative
education to believe it. interest rates,” following the neoclassical the-
Historically, the tendency in American ory that money could be mobilized produc-
economics has been to conflate investment tively (rather than put into cash hoarding or
talk with trading talk, which opens the door useless speculation) if only the Board of Gov-
to the argument that cutting tax rates for ernors of the Federal Reserve had the guts to
large savers will increase the funds avail- establish a de facto fee to punish people for
able for starting businesses and creating holding dollars. The keynote address that
jobs, rather than for taking bets and protect- night was given by Karen Dynan, the chief
ing status. Since high rates of return should economist in Jack Lew’s Treasury during the
mean available investment opportunities, the Obama Administration. When a reporter
confusion leads people to oppose any limits asked whether the White House would con-
on profits. This makes it difficult to deter- tinue its regulatory campaign against for-
mine what type of social activity our finan- profit universities, she equivocated by saying,
cial institutions are sustaining — increasing “I did not mean to disparage the sector.” The
the income of ordinary workers or safe- administration was not against all for-profit
guarding hoarded wealth. The devastating education, only the bad apples, she explained.
effects of this confusion are now self-evident, In fact, she continued, many for-profit
and they cast a shadow over the Clinton and schools were offering American workers
Obama Administrations. the much needed service of improving their
skills — an outcome that fits snugly within the
Pik e t t y ’s A meric a n re ader s are sus- “human capital” line of thinking strengthened
pended between two poles of intellectual by Solow’s productivity studies.
development in economics. One is midcen- The other pole — the one that descends
tury social-scientific technocracy, descended from Robinson and Kalecki — holds that
from Solow and Samuelson, which is preva- political power has some say in determin-
lent in the think tank that produced After ing the value of capital. The promise of
Piketty, the Washington Center for Equi- After Piketty lies with the number of con-
table Growth. Two of the book’s editors, tributors who appear to have abandoned the
Marshall Steinbaum and Heather Boushey, search for explanations of modern inequality
 Reviews 179

in growth economics. In an essay on the econometrics: the testing of marginal-pro-

intellectual history of sovereignty in 17th- ductivity theories of income distribution by
and 18th-century Europe, Yale Law profes- applying them to historical statistics. But the
sor David Singh Grewal asks how our theory other way of seeing the economy is, like Gre-
of history changes when we see capital as a wal’s, a political-economy view (Naidu calls
“social relation” rather than “simply a stock of it “wild Piketty”), which understands that
assets, whose equilibrium rental price may prices arise from policy decisions that grow
be established through conventional supply out of social and political conflict. As Naidu
and demand considerations.” Grewal argues writes, financial markets and labor relations
that the ability of the state to “limit — or but- are both arenas in which state power plays
tress — the prerogatives of capital” is rooted the determining role; both are shaped by the
in the legal distinction between a govern- contingencies of government interference or
ment constitution and a government admin- lack thereof. When values collapse and debts
istration. In this analysis, it is the law, rather go unpaid, or when a strike threatens the
than productivity, that determines the dis- health and safety of the community, it falls
tribution of income. Conflicts that emerge to the courts and the police to decide which
between a new administration and con- groups will come out ahead. If we follow this
stitutional law — as with the campaigns to line of thinking, property values represent
abolish slavery, to institute the graduated more than expectations about social desires;
income tax, or to establish a federal mini- they represent confidence that ownership
mum wage or universal health insurance at will continue to carry influence and power.
the state level — “are only to be overcome, if Property rights are best understood as “the
at all, in extraordinary moments of popular ability to call on the government to secure
constitutional lawmaking.” Such extraordi- the promised flow of income.”
nary moments in the United States would A third contributor to this political-
include the Civil War amendments to the economy view is editor Marshall Steinbaum,
Constitution, FDR’s attempt at court packing, who strays far from his economics training
and Barack Obama’s uncertain defeat by the and borrows his framework from the his-
Supreme Court when it struck down manda- torian Eric Foner. The reversal of the 19th-
tory Medicaid expansion in NFIB v. Sebelius. century trend of worsening inequality, he
“Higher-order constitutional protections for writes, was a result of left-wing movements
property and contract ratified initially by the “discrediting” free-market ideology and the
popular sovereign [are] rendered difficult to “traditional elite” it served. The “egalitar-
change,” Grewal writes. It is the American ian era of the mid-twentieth century” did
Constitution, in this interpretation, that pro- not come about because the destruction
duces inequality and forecloses policies that of two world wars enabled growth to out-
could correct it. pace returns to capital, Steinbaum writes.
In his chapter, Suresh Naidu, a faculty It arose from new ideas that allowed capi-
member at Columbia’s School of Inter- tal owners to share income more widely
national and Public Affairs, distinguishes than in the past. In a survey of the socialist,
between two ways of reading Capital in social-democratic, and “new liberal” politi-
the Twenty-First Century and of thinking cal movements that emerged across the US
about economic change. The first, “domesti- and Western Europe during the Gilded Age,
cated Piketty,” is what we usually think of as he shows how campaigns for redistributive
 180 Reviews

taxation and social subsidies, high-level analysis. Journalists took Samuelson and
private bargaining between capital and labor, Solow’s myopic insights to argue that fis-
and the expansion of the public sector per- cal deficits were combining with generous
sisted from 1890 to 1940. Yet it was only welfare benefits to disincentivize work and
after the wars and the Depression that the slow productivity, while raising wages and
political leaders who opposed such reforms prices. It was the threat of “excess demand”
were finally repudiated. that pushed Jimmy Carter to abandon full
As Steinbaum writes with startling frank- employment and spearhead his anti-infla-
ness, income and wealth “tend to diverge tion campaign with calls for a balanced bud-
because the ideological commitments of get, and it was the “excess demand” idea that
capitalism prohibit policies that would necessitated breaking the powerful unions
check divergence.” If there is a formula here, created by the New Deal, whose purchasing
it is about power and ideas, not a purely power had grown too great (to say nothing
economic understanding of r>g. The state of other kinds of power), and whose high
produces inequality by ensuring a constant wages, it was now argued, prevented corpo-
rate of return to capital, even when growth rations from investing in new equipment.
is slowing. Jeff Faux, one the founders of the left-
wing Economic Policy Institute (EPI) and
The l ast time a c adre of egalitarian policy its first president, was a leading opponent of
intellectuals challenged the idées fixes of this idea in the late 1970s. Faux had been a
technocratic government, the problem was midlevel bureaucrat in the Johnson Admin-
stagflation rather than inequality. In 1960, istration. After the Democratic Party’s inter-
Samuelson and Solow had argued there nal convulsions and failed election bid in
would always be a policy trade-off between 1968, Faux settled in Cambridge, Massachu-
inflation and unemployment for Ameri- setts, with a community of underemployed
cans. They pointed to the Phillips curve — a social scientists and would-be policymak-
graph of the historical relationship between ers, many of whom had hoped for positions
wages and unemployment in a given coun- in or near a Robert Kennedy or Humphrey
try; as jobs filled, Phillips found, wages and Administration. Faux gravitated to the Cam-
prices rose . Given the relationship, one could bridge Institute, a shoestring think tank
expect a price level that corresponded to any then styling itself as a Boston version of the
employment target. The formula gave an Washington DC–based Institute for Policy
approximation of the policy menu available Studies, where he began to collaborate with
to the federal government. Gar Alperovitz, a former Senate staffer and
But the shape of the curve changed economics PhD. Alperovitz had worked on
rapidly through the 1970s, thanks to the war Title V of the Public Works and Economic
stimulus of Vietnam, the opening of foreign Development Act of 1965, which created a
investment markets, the dramatic lowering short-lived series of regional commissions
of tariffs through the 1960s, and the growth that aspired to be descendants of the Ten-
of multinational corporations. Inflation per- nessee Valley Authority, and had made his
sisted, even though there was high unem- academic name arguing that the atomic
ployment. Because the nature of the trade- bombs had been detonated over two Japa-
off was influenced by institutions, it was nese cities to secure foreign investment mar-
beyond the scope of American Keynesian kets for the American empire. (Alperovitz
 Reviews 181

had a Marxist training: he was a student of But the programmatic radicalism of

William Appleman Williams and had studied Working Papers was a blend of statist plan-
with Paul Baran at Stanford and Joan Robin- ning and Marxist posturing that, in the
son at Cambridge.) inclement weather of the cold war, did not
Out of government, this crowd of New cohere outside universities. And the struc-
Leftists and would-be New Dealers were tural-planning debate of the 1970s turned
eager for something to do. So they insti- only in part on the quality of the arguments:
gated a short-lived but tremendously pro- equally important was the lack of power
ductive magazine, Working Papers for a New that planners and their divided constituency
Society. In the 1970s, Faux and Alperovitz held over Jimmy Carter. What of New Deal
also founded a think tank, the National Cen- liberalism remained in influence had been
ter for Economic Alternatives, to broadcast firmly wedded to the Johnson-Kennedy cold
the idea of public, democratic planning, as war foreign policy; Carter’s internationalist
opposed to the existing regime of closed- détente shut them out politically. Alpero-
door, business-executive planning. They vitz rose to fame opposing US intervention
wrote frequent opinion pieces in the New in Indochina. George Meany, president of
York Times to support the raft of social- the AFL-CIO, had fully supported military
democratic reforms that reached Congress spending on the Vietnam War and opposed
during the Ford and Carter Administrations, peace on the grounds that it would endanger
from a new full-employment law to the cre- full employment. Lane Kirkland, who suc-
ation of public options in the energy, bank- ceeded Meany in 1979, was once asked by a
ing, and transportation sectors, which were reporter about the AFL-CIO’s “preoccupa-
already being lavished with public financing. tion” with “communism.” “Totalitarianism,”
Contributors to Working Papers aspired to he replied, is “destructive of what we are.”
develop policy proposals for a political econ- When Jeff Faux founded EPI in the after-
omy in transition — proposals ranging from math of the Reagan recession to bring the
turning military industries toward civilian case for government planning back into
purposes to community buyouts of bankrupt the mainstream, he did so with money
Steel Belt factories and waterless septic tanks from organized labor. But a moment had
for private homes. The masthead included passed; whatever power unions held evap-
Noam Chomsky, Frances Fox Piven, and orated as a cascade of plant closings rolled
Emma Rothschild. Among the editors and through heavy industry. The Working
contributors were young luminaries such as Papers alums became a team of consum-
the journalists Andrew Kopkind and Chris- mate insiders, an image Robert Kuttner has
topher Jencks (an editor at the New Repub- most nobly upheld, selling social democ-
lic); the economists Derek Shearer (who later racy to politicians increasingly unthreat-
directed Tom Hayden’s Senate campaign), ened by any mass mobilization on behalf of
Lester Thurow, Barry Bluestone, and Rob- working Americans.
ert Kuttner (these last three helped Faux to The ideas on display in After Piketty
establish EPI in 1986); and nonluminaries approximate the direction of economic
like Sidney Blumenthal and Judith Miller. thought as intellectuals and scholars reach
Should they ever get back in power, the once again for the rudder of a drifting
thinking went, the building blocks of a pro- American liberalism. All three editors are in
gram would be ready at hand. close orbit to influential Democratic Party
 182 Reviews

leaders. But a return to political economy argues that new information technolo-
among American liberal policy experts only gies allow managers to concentrate power
foreshadows the enduring political ambigui- over employees through surveillance and
ties that lie beneath any reassertion of col- logistics strategies that eliminate middle-
lective claims on the economy. If the rate of management positions and redistribute
growth really is, as Solow’s student Robert income upward. The continued introduc-
Gordon argues, facing unfavorable head- tion of new technology in firms — think of
winds beyond our control, it is not imme- the future of long-haul trucking — also sup-
diately evident that a proper set of taxes and presses labor income.
skills can channel private capital into more Weil’s chapter is a restatement of his 2014
productive uses. Yet this remains the start- book, The Fissured Workplace, in which
ing point for the majority of economists. In he argues that firm specialization, a focus
fact, Piketty’s proposal for a global wealth on “core competencies,” and the growth of
tax is made because he forecasts a contin- outsourcing have been successful manage-
ued growth slowdown. Obvious corollaries rial strategies to suppress wages and flout
to using the state to diminish private wealth eighty years of employment law. He, Tyson,
are nonmarket forms of production and dis- and Spence all suggest that growing inequal-
tribution, such as public enterprise or state- ity has to do with gaps in income, rather
administered rationing programs. There is than, as Piketty argues, with wealth grow-
reason to think state-directed investments ing at the expense of labor, and they pro-
might, as a form of structural planning, pose traditional social-democratic policies
even be superior to skills-based educa- to strengthen workers’ bargaining power
tion in raising productivity, in which case and expand the welfare state. But with-
growth would accelerate. Yet none of the out the political infrastructure to mobilize
contributors to After Piketty consider these the types of collective action required to
practicalities. enforce any real sacrifices from corporate
Those who come closest to proposing executives  —   the political infrastructure
practical programs do so through reshaping once provided by labor unions — it is dif-
the private-sector labor market. If growth ficult to imagine how their agenda might
is slow, they reason, better to have it “pre- be sustained.
distributed” more evenly before taxes — to
ensure more numerous slices than to fight What to make of the return of political
over a pie that won’t grow fast enough. economy? Has the type of programmatic
These are older economists, such as Laura thinking that flourished among government
Tyson, who served as the chief of Bill Clin- economists during the New Deal found a
ton’s Council of Economic Advisers, and new audience in positions of influence? Fed-
David Weil, who was the head of the Wage eral involvement in the inner workings of
and Hour Division of the Department of corporate bureaucracy enraged corporate
Labor in the Obama Administration. Their executives in the 1930s; the equivalent today
chapters locate the past four decades of would amount to compelling Jeff Bezos by
inequality in new, practical theories of the law to raise wages in his warehouses and
firm, rather than in grander visions of class to have his investments directed by elected
struggle. Writing with Michael Spence, who leaders. (At the moment, the opposite hap-
shared the Nobel with Joseph Stiglitz, Tyson pens: his investments direct those elected
 Reviews 183

leaders.) The challenge of such conflict father texted to me, of a hospital bill (mine)
between corporate managers and public accidentally mailed to his address.
officials has led economists in many mixed If you’ll need your image later, make
economies to turn to government owner- a copy. Then rename the file, change the
ship. Why fight a business manager over extension from .jpg to .txt, and open it.
the central planning office of a corpora- I get:
tion when you can appoint in his place a
bureaucrat loyal to the government and . 
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America during the 20th century. The policy Ÿfi® — ‡›÷ — ‘‘…ÈÎÚü À€Ã ◊Œfl ı÷ƒ·ÎÓ
response of New Dealers was to turn away 샟Àˇ˜
from control and toward growth as a way of ˜“¿‡‚‚çº÷»
achieving public goals within a system of ˘‘¿„fifl䥑ƒ”‡ È‹„Ñ؃≈!˚ˇÊøȇÌ!Ç©¡ø”˘ı¯ÌîÎÂ
“free enterprise.” Incentives, they thought, Ô(}†ªª˜Û¯Ùí‡Í˜$ó≥±Û˙ÓÔÓ넯}èßØ˚ıÏÁ
could ensure that private property would be 뉘˚{å¢Æbplist00‘UflagsUvalueUepoch
used for democratic ends. Policy intellectu- YtimescaleËêñ.ü;ö #-/8:
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protect the sanctimony of free enterprise in
a world of corporate domination, but what  . . . et cetera.
good is free enterprise if the growth it deliv- This cryptic heap is the language of the
ers no longer means rising wages and greater contemporary image. On-screen images
equality? In broaching the subject of power and even most we encounter IRL are made
and control today, many of the writers in of such incomprehensible strings. Some
After Piketty may be signaling the return of a lines are decipherable: a paragraph in, my
more robust agenda for bringing the rules of bill reads, “Apple iPhone 6s back camera
our economy into public, democratic debate. 4.15mm f/2.2,” which means that it was taken
But understanding the existence of power is with my father’s iPhone camera using a large
a long way from having it, and still further aperture. The light in his kitchen was low; it
from knowing its possible uses. + must have been night.  
In a JPEG, these garbled glyphs are mostly
encoded cosine functions, charting the loca-
tion, luminance, and color of each pixel. If
I’m feeling playful, I’ll muck around — delete
Rachel Ossip bits, add a message — then resave the file as
Ghost World a JPEG. Today, a few lines of pixels shift a
centimeter to the left, shearing the aggres-
Hito Steyerl. Duty Free Art: Art in the Age of Planetary Civil sive suggestion “TO MAKE CREDIT CARD
War. Verso, 2017. PAYMENTS.”
I find it unnerving that most of the
Have you ever opened a JPEG a s a tex t images we encounter are really just text — or,
file? If not, find a stray image, something perhaps more accurately, data. Even when
from your desktop. I’m using a photo my we know they’re constructed, images that