It’s refreshing for an economist, and a damn good one at that, to be able to put their arguments in a way that the lay person can grasp. Thomas Piketty has done just that, though I should add that I found his monumental ‘Capital’ pretty tough going. But the essence of Piketty’s polemic, be it in full academic mode, or the more accessible journalistic mode, is that inequality is increasing across the planet, with the one percent getting an ever larger share of the cake and the ninety-nine percent having to scramble around for the remaining crumbs.


Chronicles is a collection of nearly fifty short journalistic style articles dating back to the financial collapse of 2008 and running through to late 2015. In those eight tumultuous years I can honestly say that not one of these articles have unduly dated or become redundant. On the contrary, they seem fairly essential reading if we are to get anything like a grip on the contradictions that are bedevilling our times. The collection is grouped into three sections: 1) Why Save the Bankers? 2) No, The Greeks Aren’t Lazy 3) Can Growth Save Us? These three sub-headings are self-explanatory enough but if the collection were to have an overall title it could usefully be ‘The Contradictions of Globalisation’.  


Piketty is pro-Europe and pro-EU but he is a fierce critic of how the EU is currently being run. Right from the outset he lays out both his pro-European sentiment and his coherent criticisms of our current EU masters loud and clear.

‘More generally, Europe’s political fragmentation and its inability to unite are particularly debilitating as it faces the instability and opacity of the financial system. When it comes to imposing the necessary prudential rules and tax laws on globalised markets and financial institutions, the nineteenth century European nation-state is, obviously, no longer the right level at which to act. P4/5

And which sane person could argue with that. Yet UKIP and an astonishingly high 52% of the British electorate seem to think otherwise. That is assuming they think about this issue at all. A large proportion of that 52% I suspect could not think beyond the ‘free movement of people’ and the poor immigrant desperately knocking at their door.

Piketty proceeds in his preface to underline his criticism of the current EU political impasse by stating;

‘The basic error was to imagine that we could have a currency without a state, a central bank without a government, and a common monetary policy without a common fiscal policy. A common currency without a common debt doesn’t work. At best it can work in good times, but in bad times it leads to an explosion.’ P7

A reference particularly aimed at the EU’s diabolical attitude towards Greece but apposite to all the poorer counties within the EU. So Piketty is calling for a real political and economic union whilst political parties like UKIP and the French Front National are arguing persuasively, to the losers in the game of globalisation, for the very opposite.  


The interesting thing about this Piketty collection is that it is presented in a chronological order so the reader is able to see the economic and political crisis unfolding step by step and to marvel at how Piketty has been able to largely anticipate this twin crisis well in advance of the actual events. Way back in early March 2009 Piketty saw clear enough the roots of our current EU crisis and even offered a simple enough set of alternative policies.

‘We’re witnessing the same phenomenon as in the United States: executives take control and vote themselves exorbitant incomes unrelated to their productivity, encouraged by repeated tax cuts. What’s more, in the financial sector these obscene salaries have incited senseless risk-taking behaviour, which clearly contributed to the current crisis. The answer lies in the tax system and requires a rebalancing between labour and capital. This enormous job of reconstruction will require strong international coordination.’ P27/28

Well we can see that seven years on there has been no change in direction, no strong international leadership and further widening of the gap between the owners of capital and the European labour force. And what was UKIP’s response? To pull out of the European Union altogether and to urge Britain to go it alone. And what has been the very first policy change of the crumbling British Tory Party? To propose a radical cut in corporation tax. Instead of international cooperation we see the first significant signs of the race to the bottom. 

 By the end of that year Piketty is sounding somewhat more pessimistic.

‘Today, governments support banks and large firms, which has allowed us to avoid a depression. But without holding accountable the institutions thus supported, this outpouring of public generosity in many cases brings about a reverse redistribution of wealth.’ P49

How true. In Britain the banks were bailed out but the general populous got a severe dose of recession. The state has been significantly shrunk and public services are in crisis. At the very time of writing, schools are closing for the day while teachers strike over diminished state funding.

Piketty concludes;

‘Left to itself, capitalism, because it is profoundly unstable and inegalitarian, leads naturally to catastrophes. Unfortunately, it seems new crises are necessary for governments to fully recognise that.’ P50

Of course, on this point I think Piketty is mistaken. Governments and political parties of the establishment don’t seem to learn anything. Take for example both the British Tory Party and the British Labour Party. Still both are clinging onto the failed neoliberal policies that led us into the current mess, and when new forces like Syriza, Podemous and the Corbynistas emerge, their alternative policies are vilified and the establishment bunker down with the same old Chicago School orthodoxies. Nothing it seems is learned.

Stepping forward to 2015 Piketty really goes into optimistic mode but unfortunately events do not prove his optimism well founded.


‘The electoral triumph of Syriza in Greece may be on the verge of overturning the European status quo and putting an end to the austerity undermining our continent and its youth. Especially since the Spanish elections scheduled for late 2015 may produce a similar result, with the rise of Podemos. But in order for this democratic revolution from the south to really change the course of things, the centre-left parties now in power in France and Italy need to take a constructive attitude, recognising their share of responsibility for the current situation.’ P152

Unfortunately, none of the above has come to pass. Syriza has backed down in the face of EU bullying. Podemos has twice failed to unseat the big two parties in Spain. And neither the French nor Italian governments have abandoned the neoliberal project. And of course, on top of all that, Britain has just voted to leave the EU with a surge of xenophobic, right wing passion. No sign of the EU changing track any time soon. Piketty, replying to the growing anti EU isolationist sentiment, concludes;

‘Let’s be clear: as long as we share the same currency, it’s entirely justified to coordinate the level of deficits, as well as the overall orientation of our economic and social policies. But simply put, these common choices must be made in a democratic way, in broad daylight, following a public and pluralistic debate, and not by applying mechanical rules and automatic sanctions which, since 2011-12, have led to excessively rapid deficit reduction and a generalised recession in the Eurozone, and public debts have increased, the opposite of the proclaimed objective. P153

Finally, as if predicting the Brexit vote, Piketty writes;

‘Why is the working class turning away from mainstream parties more or less everywhere, especially from the centre-left parties that claim to be their defenders? Quite simply, because the latter have not been defending them for a long time. Over the past few decades the working class has endured a double hardship, first economically and second politically. Economic changes have been unfavourable to the most disadvantaged social groups in the developed countries: the end of the exceptional growth of the post-war decades, deindustrialisation, the rise of emerging counties, (and) the destruction of low and medium skilled jobs in the Global North. …….. This feeling of abandonment fuels the Far Right vote and the growth of far right parties both inside and outside the Eurozone. P156/7

This brings us bang up to date. With the French national elections zooming up into view, it is not beyond the imagination to see Madam Le Pen and her far right Front National taking the French Presidency. Even if they fail in that objective their poisonous neo-fascism continues to attract working class votes in ever greater numbers.

So what is to be done? Piketty calls for a radical about face in the EU’s policies. A rejection of the failed austerity programmes and a return to policies of growth and investment. It’s not rocket science but our current masters seem to be a stubborn bunch. The British working class, having opted out of the EU, will quickly learn that the austerity obsessed Tories and their UKIP side-kicks will only offer them more of the same. As for the British Labour Party, it is torn between its old Blairite neo-liberal policies and the Corbynista pro-growth Revolution. The war rages on.

End JPK Copyright, 5/7/16

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