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Piketty and The Nostalgics


Ismail Lagardien is a writer, columnist and political economist with extensive exposure and experience in global political economic affairs. He was educated at the London School of Economics, and holds a PhD in International Political Economy.

There is an apparent belief that knowledge, especially knowledge and ideas on inequality and injustice, belongs to Marxists. It is assumed that Marxists have a monopoly on ideas, and that their ideas are eternally valid. As Engels may have said: ‘how ridiculous it would be to attempt to ascribe any absolute validity to our present views….’

Sometime after the East Asian Crisis of 1997, neo-liberal orthodoxy, the belief that free and unfettered capitalist markets were the best arbiter of human behaviour, lost much of its intellectual force. What remained of this force, especially its insistence upon proscribing the state, faded considerably after the current crisis spread from the United States across Europe and the world sometime in 2008. This decline and gradual disappearance has had mixed intellectual outcomes. For the sake of the discussion that follows, four may be isolated.

First, there are the copper-bottomed neo-liberals, especially those who are loyal to the neo-classical economics model. This group, who have dominated the profession and academic discourses, realise they’re under intense pressure because of their discipline’s failings. They seem to be on the retreat….

Then there are those who are generally opposed to neo-liberal orthodoxy. Among them are Marxist and non-Marxist political economists. Some of the more prominent non-Marxist opponents of neo-liberal orthodoxy are noted economists like Joe Stiglitz, and, of course, Thomas Piketty, to whom we will return, below. A third group of opponents, are those political economists who are, generally, associated with heterodox or pluralist approaches to public policy-making. I generally associate myself with this group, mainly because the neo-classical economics model has several philosophical, theoretical and methodological shortcomings – and because of the iniquitous outcomes of liberal capitalist organisation of society. The finer details of this assertion are for another discussion.

And then there are the nostalgics; a group of Marxists who, in a combination of jealousy and envy which, it seems to me, conceals a lack of fresh ideas, would insist, like the little boy who was given a hammer, that everything is a nail. Fighting neo-liberalism, since the early 1980s – necessary as it was – gave them a raison d’etre, and now they don’t know how or what to do next. Quite absurdly, if comically, the neo-liberal nostalgics (not all of whom are economists) slap the label of neo-liberalism on everything they don’t like, or that is wrong with humanity.

The nostalgics always seem to be offended by anyone (other than themselves, of course) who dares say anything about injustice, inequality, exploitation and abuse of dominance – without referencing Karl Marx or the work of Marxist scholars. This is, of course, ridiculous; very many of us experienced prejudice, injustice, racism, abuse, structural inequality and exploitation before we read Marx or learned about socialism. As Marx may have said, our social existence determined our consciousness.

The first, and probably the main problem with the nostalgics is the idea of ownership. There is an apparent belief that knowledge, especially knowledge and ideas on inequality and injustice, belongs to Marxists. It is assumed that Marxists have a monopoly on ideas, and that their ideas are eternally valid. As Engels may have said: ‘how ridiculous it would be to attempt to ascribe any absolute validity to our present views….’

And so we come to one of the more recent critiques of Piketty. This particular critique was based on two issues. The first was that Piketty merely sought to shore-up neo-liberalism, the second was that he did not consult, or draw on the works of Marx – as if this somehow invalidated his efforts.

Anyway, in this instance, the nostalgics are just wrong. Accusing Piketty of being neo-liberal seems a lot like a ruse to conceal a lack of any new ideas or the ability to grapple with 21st century capitalism. The nostalgics seem quite unable to deal with the vast changes that have taken place in the world since the end of the Cold War. Actually, they seem much more comfortable with the period around what political economic historians refer to ‘the hungry 40s’, the truly grim period in Lancashire, England that inspired Marx and Engels to write their opus in the mid-19th century.

Instead of engaging capitalism in the 21st century, and contributing to establishing a more just and equal social order, the nostalgics return to the industrial capitalism and economic conditions of that era in Britain. This seems to give little consideration for how the world has changed since 1848, when the Communist Manifesto was first published. It is generally accepted that the Manifesto was written by Marx, but its economic analysis was significantly influenced by Engels’s ‘practical experience of capitalism’ in his family’s cotton firm in Manchester. Without detracting from the historical and analytical value of Marxism, the Manifesto was based largely on the economic, social, and political conditions in Manchester, and the surrounding Lancashire cotton towns during the 1830s and 1840s. The knowledge produced in the Manifesto can, therefore, be situated quite easily, and may well be most relevant to its time. To quote Engels himself (again), ‘how ridiculous it would be to attempt to ascribe any absolute validity to our present views….’

So, while successive crises over the past two decades have reduced the force of neo-liberalism as the organising principle for global public policy-making, the nostalgics will have nothing to do with it. They’re still making like its 1848. This nostalgia is terribly tedious, unproductive and says a lot more about the rigidities and fundamentalisms of the dreamers and their reveries, than it does of global capitalism.

Reading the work of the nostalgics, I am reminded, sometimes, of the time I shared a home with a blind woman. It was her own apartment, but within the first three weeks I was there, she kept breaking porcelain plates and glass bowls, and crashing into side tables or chairs. One night, she sat me down and gave me a talking to.

For the few years that she had lived in the apartment, she arranged things so that she knew where they were, instinctively, without looking, without crashing into them, and without falling over. She assured me that she was happy to share the space with me, but would prefer it if I did not move things around without telling her, or if I helped her establish new patterns of movement. This, I think, is a useful analogy to try to understand the nostalgics. The world is changing around them, and it has been for decades, but they remember only the social relations that shaped the 19 century satanic mills of northwest England. They are a lot more comfortable explaining – not understanding – the world, today, on terms that were more appropriate almost two centuries ago. The strength of Piketty’s work is precisely in its attempts to deal with capitalism in the 21st century.

That he did not draw on Marxism is not a flaw.

Consider this. When I was in standard six, in Eldorado Park, I drew a nest of concentric circles on a black board in one of my classes. I explained how we were moved from Johannesburg (Fietas), to the periphery, and how our parents earned less money than people who lived in or near the centre of the city, but we had to travel further and longer to and from work. This was my analysis of structural inequality (as a thirteen year-old), and I did not draw on Marx; I had not even heard of Marx. Surely this did not invalidate my analysis. Again, my social existence, determined my consciousness.

In general, though, going on about neo-liberalism, when greed, selfishness, entitlement, corruption, pollution, patriarchy or simple bigotry – all of which may well be with us for generations to come – is just bang out of order. It gets us nowhere close to resolving the multiplicity of crises, and structurally complex inequalities, injustices, and abusive patterns of behaviour and dominance that beset the world.

To put a Marxist spin on Piketty, we may say that it was precisely his ‘social existence’ that determined his consciousness; his social existence can be situated in a frayed, disillusioned capitalism, and with capitalists running for cover in almost every corner of the globe. While Piketty can speak for himself, it is fair to say that he did not decide, at some point that he was a Marxist, and should, therefore, comment on the world in which he found himself. This is probably the cynosure of Marx’s method. This is probably what our humourless Marxists miss. By insisting that everyone who disagrees with them has to be neo-liberal, seems to me like they are chasing their own shadows.

The nostalgics’ fixation with neo-liberalism reminds me of Marx’s explanation of 19th century obsession with Greek art, which came down to nostalgia for an age and a set of relations that everyone quite well knew would never return; there would never be another Oedipus Rex, another Odyssey or an Iliad.

Like their religious counterparts, the Marxist nostalgics as fundamentalists draw on texts that were written in specific social and historical contexts. Theses texts were written by particular people for particular purposes. It’s time that we accept that the ideas contained in fundamentalists texts, whether Marxist, Smithian or Ricardian, have outlived much of their usefulness. We need fresh thinking. Piketty has laid down an important marker for dealing with capitalism in the 21st century. That he did not consult Marx simply means that his ideas are fresher than those of the nostalgics. I am with Bertolt Brecht who reminded us that old and new wisdom mixed very well. DM