Piketty, Rousseau and the desire for inequality

Thomas Piketty’s *Capital in the 21st Century* tells us a great deal about the evolution of inequality in wealth and income over a long period and how that distribution is likely to evolve unless we intervene. What Piketty does not do is to tell us why inequality is bad or why people care about inequality, although we can glean some knowledge of his personal beliefs here and there. In what follows I draw on some aspects of Rousseauvian moral psychology to suggest that the reasons people care about inequality matter enormously and that because some people value inequality for its own sake, it will be harder (even harder than Piketty thinks) to steer our societies away from the whirlpool of inequality.

In the book, Piketty argues that, without significant political intervention, it is likely that wealth inequality will increase dramatically in the coming century and that a class of rentiers will come to dominate over those who earn their incomes from labour, just as previous classes of rentiers did before the twentieth century. His book tells of a U-shaped pattern in the evolution of inequality in the past hundred years, with high levels of inequality being reduced but then bouncing back. Striking levels of economic growth coupled with the destruction by war and revolution of the wealth that formed the background to previous inequality, led to societies that were an unprecedented combination of egalitarianism and meritocracy, where those who worked hard could do well for themselves and where the domination over the living by wealth inherited from ancestors had become greatly diminished.



One of the things Piketty’s work does is to provide an important historical contextualization of the work of John Rawls, showing that the type of society Rawls took to be the new normal, was not. It is striking how far Rawls’s picture of a functioning scheme of co-operation reflected and normalised a merely historically contingent state of affairs. Rawls’s ideal of a well-ordered national society, with its basic structure organizing citizens into functional roles to the end of implementing his two principles of justice can be seen as a cleaned-up and morally improved counterpart to the Keynesian national economies and welfare states that were typical of the developed states in mid-century. Citizens, their basic liberties guaranteed, brought their natural talents and acquired skills to market, and the rewards attached to the various position in economy and society were structured so that income inequalities worked to serve the goal of efficiency, to provide incentives, and thereby to ensure an income distribution that met the criterion of the difference principle and worked to the greatest benefit of the least advantaged. Though the difference principle officially covered all those social primary goods not distributed by lexically prior principles, it is clear that income from work was the main thing up for grabs.

Piketty’s claim, then, is that all this is changing. We are moving from a high growth society to a low growth one, and income from the ownership of capital is coming to dominate income from labour as material inequality also grows. Moreover, there’s a vicious cycle at work: low growth both fosters inequality but also the inequality we are getting is a barrier to growth. The amount of income available to those who work hard or innovate is diminishing, the amount available to those who are actually or practically rentiers is increasing. With the passing of the mid-twentieth century norm, the tradeoff that the difference principle standardly invoked, that we should tolerate some inequality to provide the incentives that would improve everyone’s non-comparative good — how well people do in terms of wealth and income independently of how well others do — has largely been replaced. Now the pursuit of that good does not require permitting inequality so much as its active suppression, because it has gone beyond the point where it is necessary for growth and reached a degree where it suppresses growth, to the great detriment of those who have least.

As I mentioned at the beginning, Piketty himself does not have that much to say about why inequality is bad, or why people care about it. In the main, he simply documents the facts. In many respects this abstinence from moral philosophy is a strength. After all, there are many different reasons people care about inequality or believe that it is bad or unjust. If “inequality is bad or unjust” is within an “overlapping consensus”, then we can rely on that shared belief in further theorizing and argument without settling the question of why it is bad or unjust. People who believe that inequality is intrinsically wrong or unjust can then make common cause with those who think it is bad for instrumental reasons, often alongside those whose real opposition is to other ills, such as widespread poverty.

However, we can discern some of Piketty’s own normative commitments in his text, and these constitute something of a thin and conditional opposition to inequality even if — for all we know — they may not exhaust the reasons he believes inequality is bad or wrong. Two reasons stand out (perhaps more in [later elaborations](http://www.renewal.org.uk/articles/interview-inequality-and-what-to-do-about-it) than in the book). The first is that whilst he believes that some inequality may be good for growth, he thinks that too much inequality can stifle it. The second is that he believes that when inequalities are too great, democracy becomes unsustainable. Both of these reasons are compatible with a broadly egalitarian liberalism and with modern republicanism, and Piketty references both the work of John Rawls and the Declaration of the Rights of Man in support of his general position. Further, it seems reasonably clear that Piketty also endorses the Rawlsian view that inequalities within a state matter more than global inequalities do and for different reasons: the state has a duty to ensure that citizens enjoy equality of status with one another and this would be undermined by too much inequality of wealth and income. Globally there is no state with such a duty, nor citizens standing in a political relationship with one another. So the critique of global inequality must proceed on a different basis, and it is not central to Piketty’s concerns.

As well as abstaining from moral commentary, Piketty also says little about the social and psychological reasons people care about inequality, but he says more than nothing. For example, he writes of the reasons given for paying some French administrators very high salaries, explaining that this was thought necessary because otherwise they would lack the social status necessary to deal on equal terms with wealthy elites. But most of the time, when Piketty is considering these questions at all, his focus is on the second set of issues, and here he is a solid materialist and economist: what matters it that people have the material resources necessary to lead good lives and inequality is a good thing if it provides (the worst off with) more of those things, and a bad thing if it does not. His concern here is mainly with people’s non-comparative good. Some inequality has the effect of promoting that good, because it fosters growth, but too much inequality chokes it off and is therefore bad. (I put to one side here the fact that, because of competitive bidding for scare resources, inequality can affect people’s non-comparative good directly, because the can outbid or be outbid by others for nice houses and the like.)

As economists tend to focus on people’s non-comparative good, they also tend to neglect an important dimension of what people care about, having to do with pride, shame, recognition and the reactive attitudes. People don’t just care about what they are objectively able to do with the resources they have, they also care about their standing, their reputation and its acknowledgement by others. This is an old distinction and it is central to Rousseau’s philosophical anthropology as found, in his *Discourse on the Origins and Foundations of Inequality among Men*. According to Rousseau, people have two kinds of self-interested drive. On the one hand there is *amour de soi même*, an interest in non-comparative good, in being well fed, clothed, sheltered and healthy. On the other there is *amour propre*, a drive to secure recognition in the eyes of others as being of value which can turn into feelings of resentment and humiliation when it is not satisfied. My contention here is that something like Rousseau’s distinction is necessary to understand the situation we are now in, and why it is going to be so hard for us to get out of it. *Amour propre* explains, as Frederick Neuhouser puts it,

> how humans can be led to seek out inequalities for their own sake, as public demonstrations of the superior standing they are out to achieve. The range of human phenomena that depend on such an impulse to inequality is extensive and familiar: the endless pursuit of wealth, ostentatious consumption, the relentless drive to compete and outdo … all are manifestations of the “fervor,” inspired by *amour propre*, “to raise one’s relative fortune, [not] out of genuine need [but] in order to place oneself above others” (OC III, 175) [1]

The coexistence of these two drives naturally raises the interesting question of what people want when they are in conflict. To put it crudely, would people prefer to be better off in their objective standard of living, or would they prefer that they be relatively better off than others? That’s an empirical question and one to which I don’t have an answer that’s supported by evidence, but some reasonable speculation is possible. People who are poor, who lack the basic amenities in life and who have to work very long hours just to make ends meet will, no doubt, have some concerns about their relative standing. But the urgency of their material needs will be such that an improvement in those conditions will be what they care about most. Being adequately fed, having decent sanitation and then access to labour-saving devices like washing machines is going to loom large in their priorities.

By contrast, someone who is extremely wealthy already, whose every imaginable material need is met, who can afford to spend money on private jets and Hermes Birkin bags, is going to be more concerned with relativities and with securing the kind of respect and recognition that such a person believes they are due from those with less. They will also often value relations with ordinary people which have the quality of deference, of cowed compliance, of those other people “knowing their place” and, where visible at all, acting as instruments of the wealthy person’s will. To the one percenter, the subjection of others matters more than the further satisfaction of material need; to the person at the bottom, the satisfaction of need requires their own subjection because they have to accept that subjection in order to earn money to satisfy their material needs.

Notice how this picture inverts one of the standard tropes of the right-wing commentariat. According to endless pundits, it is the egalitarian left, obsessed with a “politics of envy”, who irrationally focus on the distribution of wealth and income at the expense of what really matters, making people’s lives better. But here we see that a focus on inequality, indeed a lust for inequality, is characteristic of the wealthy who value inequality for its own sake and who rejoice in the subordination of their fellows.

Since the crisis of 2008 there has been a continuous argument between proponents of austerity and those economists, influenced by Keynes, such as Paul Krugman and Simon Wren-Lewis who have argued that austerity and cuts are unnecessary and that a plausible expansionary recovery is possible. Pundits and politicians of a more conservative bent have pushed the line that structural changes in the economy are needed, involving more flexibility from the workforce, that public services should be “streamlined” and scaled back and that welfare programmes should be cut to provide people with incentives to get back into work, and so forth. Suppose, as seems plausible to me, that the Krugmans, Wren-Lewises, and company are broadly right. If they are then there’s a choice available between an “economically rational” policy with higher rates of growth and lower inequality , on the one hand, and an economically inferior policy with lower growth rates and higher inequality, on the other. In the second scenario we find the poorest members of society in an increasingly subordinated position with their best option often being precarious work on zero-hours contracts. On the “economically rational” view of the world the latter choice just looks crazy. After all, given compounding, over the long term higher growth rates make everybody better off. The poor would be richer, sure, but so would those at the very top.

But if, as I suggest above, people care not just about doing better with respect to their non-comparative good, but are also in the grip of powerful drives that can lead them to favour inequality, a different picture emerges. If the wealthiest members of society are strongly motivated to pursue and enforce inequality as a means of asserting their own dominance over others then, since they already have the material means at their disposal to satisfy all their consumption desires, they will (or enough of them will) favour policies that enhance the subordination of the least advantaged and make those people disposed to act according to the bidding of the wealthy. What Krugman, Wren-Lewis and others therefore see as an irrational policy preference becomes a rational one, given the things those in the elite most care about.

Where does this leave democracy? Piketty fears that given rising levels of wealth inequality, democracy is doomed. People will not tolerate high levels of inequality forever, and repressing their resistance to an unequal social order will eventually require dispensing with democratic forms. I’m not so sure. A highly unequal society in wealth and income is certainly incompatible with a society of equal citizens, standing in relations of equal respect to one another and satisfying their *amour propre*, their craving for recognition though a sense of shared citizenship. (This benign outcome roughly corresponds to the Rawlsian ideal of a well-ordered society where the social bases of self-respect are in place.) But the outward form of democracy, its procedures, are surely compatible with great inequality, just so long as the wealthy can construct a large enough electoral coalition to win or can ensure that the median voter is the kind of “aspirational” person who identifies with the one per cent, even though they are not of it. In an unequal society such people are very common. They may be very poor compared to the super-rich, but they have just enough to take pride in their status as members of “hard working families” and to hope for the lucky break that will elevate them. At the same time they can look down with contempt on the welfare claimant and the “illegal” immigrant, nurturing their own *amour propre* by taking satisfaction in what they are not. Here we have, in another guise, the phenomenon of the “poor white” who looks down on poorer blacks and is thereby impelled to sustain a hierarchical social order. Procedural democracy limping on against a background of inequality, disdain and humiliaton is not an attractive prospect, but it is already a big part of our present and may be the whole of our future unless egalitarian politics can be revived. [2]

[1] Frederick Neuhouser, *Rousseau’s Critique of Inequality* (Cambridge: Cambridge University Press, 2014) p. 79.

[2] Many thanks to Martin O’Neill for comments.