Capitalist ideology has a mighty grip on the consciousness of contemporary Americans. It is sometimes said that people in the United States can more readily imagine the end of the world than the end of capitalism. Fortunately, not everyone is so conceptually constrained. In his pathbreaking book Capital and Ideology (Harvard University Press, 2020), the preeminent French economist Thomas Piketty writes:
“The study of history has convinced me that it is possible to transcend today’s capitalist system and to outline the contours of a new participatory socialism — a new universalist egalitarian perspective based on social ownership, education, and shared knowledge and power.”
Capital and Ideology presents the elements of a viable participatory socialism as well as a plausible strategy for getting there. Piketty’s version of socialism does not eliminate capital. But it radically equalizes the possession of capital and radically democratizes the exercise of both economic and political power. Recognizing the efficiency and incentivizing advantages of regulated competition, Piketty retains markets for the allocation of labor and for the distribution of many (but not all) commodities. Thus, Marxists would characterize Piketty’s participatory socialism as a democratic form of market socialism.
Capitalism is based on the concentration of economic power in the owners of capital. Thus, transcending capitalism requires curtailing or abolishing the economic power of the capitalist class. This can be accomplished, argues Piketty, by changing the nature of property and ownership. In Piketty’s participatory socialism, ownership becomes temporary rather than permanent possession, and ownership of capital circulates around the adult population. Temporary and circulating ownership is implemented in two ways: steeply progressive taxation and a universal capital endowment.
Piketty advocates three radically progressive forms of taxation: an annual income tax, an annual wealth tax and a steep inheritance tax. The exact size of these taxes must be experientially determined, but here are the orders of magnitude that Piketty has in mind. Annual income 100 times the average might be subject to 70% annual taxation, while annual income 1,000 times the average might face 80% annual taxation. Wealth 100 times the average might experience 10% annual taxation and 70% inheritance taxation. Wealth 1,000 times the average might endure 60% annual taxation and 80% inheritance taxation.
Progressive taxation of this magnitude would clearly prevent any huge accumulations of income or wealth. It would rapidly and drastically reduce both income and wealth variation. The income tax would also pay for education, health care, retirement, unemployment insurance, guaranteed annual income, plus imperative environmental expenditures.
As a means of circulating property, every young adult at age 25 would receive a capital endowment equivalent to about 60% of average wealth. This endowment would be financed by the wealth taxes mentioned above and could be used as the recipient wishes. This universal capital endowment would be complemented by new rules of business governance according to which workers receive a substantial and expanding share of votes on all corporate boards. The voting share exercised by workers would eventually become a majority in large firms. Moreover, a ceiling would be placed on the votes of large private shareholders. These rule changes aim at a gradual substitution of social ownership for private ownership of productive enterprises.
Participatory socialism also requires liberating the state from plutocratic dominance. To facilitate such liberation, Piketty recommends a low ceiling on individual political contributions combined with what he calls “democratic equality vouchers.” According to the latter, each citizen would receive an annual voucher, worth say $20, which could be contributed to any political party or movement of the person’s choice. These financial revisions, Piketty acknowledges, are necessary but not sufficient conditions for rendering government truly democratic.
A viable participatory socialism must address climate change and establish an ecologically sustainable economic system. With this in mind, Piketty recommends a carbon tax, but emphasizes that it must be supplemented by strict regulations prohibiting environmentally destructive activities. Noting that high-income persons bear disproportional responsibility for carbon emissions, he advises that the carbon tax be added to the progressive income tax rather than levied separately. He also claims that the greatly reduced income inequality of participatory socialism will itself decrease carbon emissions and other environmentally destructive behaviors.
Piketty considers education extremely important for durable social equality.
“Emancipation through education and diffusion of knowledge must be at the heart of any project to build a just society and participatory socialism,” he writes.
Hence participatory socialism must equalize educational funding (public and private) across all income levels and all scholastic durations. Preventing the reemergence of social hierarchy requires that any disadvantaged communities receive ample educational resources of the highest quality.
Piketty’s participatory socialism is not a fully egalitarian society. Indeed, it is best understood as a route towards participatory socialism rather than a completely socialist system. But in contrast to many socialist utopias, establishment of Piketty’s participatory socialism does not seem politically impossible and would not entail major violence.
If implemented, it would achieve at least four vital objectives: 1) decisively breaking with capitalism, 2) greatly reducing economic inequality, 3) forming an environmentally sustainable economy and 4) eliminating poverty.
A just society, Piketty maintains, is not a completely equal one. Rather, a just society is one in which the least advantaged person has the highest possible life conditions. Such a society maximizes the minimum social welfare and thus could be called a maximin social system. And among realistically attainable social systems, Piketty’s participatory socialism might well be maximin.
Just Economics is written by members of the Economic Justice Collective of the Rocky Mountain Peace & Justice Center.
This opinion column does not necessarily reflect the views of Boulder Weekly.