Piketty’s People

by Andrew Stuttaford

Writing in the New York Times, David Brooks goes quite a long way to getting it right about the current elite swooning over Thomas Piketty’s confiscation manual, a phenomenon that reflects the fact that this particular class struggle is, as is so often the case, within the top few percent:

If you are a young professional in a major city, you experience inequality firsthand. But the inequality you experience most acutely is not inequality down, toward the poor; it’s inequality up, toward the rich.

You go to fund-raisers or school functions and there are always hedge fund managers and private equity people around. You get more attention than them at parties, but your whole apartment could fit in their dining room. You struggle with tuition, but their kids go off on ski weekends. You wait in line at the post office, but they have staff to do it for them….

The situation is ripe for the sort of class conflict the French sociologist Pierre Bourdieu used to describe: pitting those who are rich in cultural capital against those who are rich in financial capital.

…Piketty wouldn’t raise taxes on income, which thriving professionals have a lot of; he would tax investment capital, which they don’t have enough of. Think of what would happen to the Manhattan or Bay Area real estate markets if the financiers had to sell their stray apartments in order to get liquid assets to pay the tax bill. Think of how much more affordable fine art would be. Think of how much more equal the upper class would be.

That’s not an entirely accurate description of what Piketty has in mind.  At higher income levels he would raise income taxes too (a marginal rate 60 percent on incomes over $200,000, and 80 percent over $500,000 or, more generously, $1,000,000) but Brooks’s point remains, nevertheless, broadly true.

There’s something else though that Brooks might have mentioned. The richest of the rich (a Warren Buffett, say, or a George Soros) also have a vested interest in making sure that in making sure that their position at the top of the heap is not challenged by wannabe magnates.  Higher taxes (which they can easily afford) would be a small price to pay for keeping the not quite so wealthy riffraff out.  And that’s a good part of why they fund what they fund and why they vote how they vote.

Who, whom?