The LSE half-day discussing Piketty’s Capital in the Twenty-first Century and the implications of rising inequality for politics and policy closed with a focus on local social policy dimensions and global politics. This is the last of four blog posts describing the event—and I hope it will inspire you to take up some of the questions it raises.

Kitty Stewart, a researcher in early childhood development policy, took us from politics to social policy. Her general criticisms of Piketty were around his narrow focus on vertical inequality, ignoring the real if limited progress that has been made on horizontal inequalities (e.g. race and gender), and (joining the chorus, but in a different key) his focus on wealth. Her concern here was that Piketty limits himself to discussing wealth inequality without really asking what wealth is for, as Nancy Fraser would have us ask. I agree that this is a serious limitation in Piketty’s analysis.

In Stewart’s research area, what wealth does is protect your child from having “only” the opportunities that public services (childcare, schooling) would provide. And the worse inequality gets, the stronger the need that parents feel to pay for this protection out of their own resources, both because public services decline and because the distance your children may “fall” if they don’t succeed is much greater. From this perspective, she welcomes Piketty’s focus on the rich as the problem instead of the poor. Stewart’s own research suggests an intriguing connection, and an interesting one for the normative debate over the relative importance of reducing absolute poverty and compressing inequality. Childhood poverty rates, she argues—using EU data—can only be shifted so much if the gap between the top and bottom quintiles isn’t compressed. There is only so much you can do by horizontal redistribution (from equally wealthy families without children to families with); you have to tap into vertical redistribution (from the wealthy to the poor) to get child poverty rates below 10%. This has health as well as life opportunity implications, of course. The data and the argument are in her chapter “Changes in poverty and inequality in the UK in international context” here.

At the level of service delivery, everyone sees the effects of austerity around them in the UK today, whether it’s the flashy new public library I love to spend time in that will have its opening hours cut back in Birmingham, or raised fees at cultural events, or draconian measures to deny people the benefits that have enabled them to eek by for decades. Stewart discussed one example of the impact of Britain’s austerity response to the financial crisis: foodbanks. These are not normalized in the UK in the same way as in Canada (and perhaps the US), where they are a routine source of food for the poor. In the UK, access is by professional referral, and people are given 3 days of emergency food relief. This usage has exploded in the UK—from almost 26,000 families in 2008-2009 to almost a million (913,000) this past year. (Just now passing the absolute numbers who use food banks in Canada, where we have half the population of the UK.) Instead of sounding the alarms about rising inequalities, the food bank charity has made the very polite British case that they would like more advance notice to families so families can plan ahead when they are going to be left bereft of social support.

Why the weak response? This brings us to Piketty’s assertion that one of the troubling effects of rising inequality is that it gives disproportionate political influence to the wealthy. Soskice challenged a simple version of that thesis at the outset of the afternoon: the outright purchase of political influence that we see in America is muted or qualitatively different in other countries, where party discipline plays a role in keeping individual elected officials from being blatantly bought off. Stewart spoke broadly about how the public conversation in the UK now is entirely in terms of fairness and protecting the worst off—how could it be more consistent with Piketty’s own values? And less at odds with what is actually happening?

She showed data from colleagues at the LSE and Essex (De Agostini, Hills, and Sutherland) clearly demonstrating that tax changes since 2010 have literally taken money away from Piketty “50%” (the lowest half of income earners) and given it to the 40%. The 40% are the “middle class”—leaving out the upper professional, entrepreneurial, and “rentier” classes that compose the 10%. This fostered a discussion around using the concept of accountability in political intervention: they’re using the language, and academics can collect the data to demonstrate that the end result is opposite to what they promise.

(The 1% made off with almost all the spoils of recovery—they didn’t get a tax break, but they don’t need one. The 10th to 1st percentiles join the 50% in not having gained in the last years, setting the stage, I suppose, for the new professional-worker (e.g. professor-adjunct) alliance.)

This theme brought us back to one of Soskice’s arguments about the dangers in focusing on the rich: while Piketty focuses our anger on the 1%, in many countries the dynamics of the 40% and the 50% are a substantial factor in the day-to-day world of economic inequality and life opportunity.

Stewart challenged Piketty’s assertion that education is a great force for equality: his claim here seems contrary to his overall argument that larger structural forces are widening the gap. She described this vividly by saying that early childhood development programs don’t support equality of opportunity in the sense that kids getting “head start” benefits may end up CEOs; they’ll end up, at best, working in insecure service industry jobs. Perhaps such social policy rearranges deck chairs on the Titanic, she said.

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I had read Piketty on education as saying that keeping up a focus on equitable access to education doesn’t reverse the growing structural gap, but it does keep particular groups from falling farther and farther behind, as African American men have in the U.S.—and the U.S. may be the least equitable among comparator country for educational opportunity.

In any case, if Piketty says what I think he does, it needs to be amplified by commentators like Stewart: those concerned with structural justice need to confront at every turn the facile idea that education, which may improve the lives of some individuals, changes in the same way, or some other easy way, the opportunities that those educated folks can compete for, which are determined more structurally.

Piketty and his collaborators work on extending their data sets to capture the global picture, but data beyond the traditional European colonial powers and their English-speaking outposts are limited: Piketty has little to say about global development (apart from capturing some of the global flows of wealth from the era of colonial expansion to now, including the fact that Africa is the only “formerly colonized” continent that continues to experience a net outflow of return on capital to other countries). John Sidel, coming from the perspective of international and comparative politics and development, discussed Indonesia, Malaysia, Thailand, and the Philippines: are these and similar countries harbingers of the unequal societies to come? Is it “their culture”—or “our markets”—that create the oligarchies, or oligopolies, that the region is known for? (“Oligopolies” highlights the market monopoly side of oligarchic power.)

The top income earners and wealth holders in these countries no longer live in neighbourhoods with their fellow citizens, but in exclusive gated communities. (That might seem normal to U.S. readers, but remember that you’re the sole “developed” country that achieves the levels of inequality that approach the levels common in the “developing” world—the only wealthy country that registers on the global absolute poverty measures of $2/day, which 2% of adults without dependent children in the U.S. experience.)

Sidel presented his work as a reply to the common idea that “the culture” of Southeast Asia creates politics—these oligopolistic classes emerged from market forces, he argued. When pushed on different kinds of cultural explanations, he further related the patterns he describes to colonial history, with India as the outpost of the British Empire, and Indian nationals represented among the oligopolies in countries across the whole region (save China), as well as parts of Africa. Several of the countries he described made substantial progress on reduction of absolute poverty in the last decade, while maintaining high levels of inequality—and while keeping taxation low and government services correspondingly slim, due to the political influence of the wealthy on tax policy. These oligopolies involve businesses that serve their domestic consumer markets, giving them an incentive to raise wages (so people can buy their goods), unlike in our globally disconnected markets, where the people making smart phones will never buy them. These patterns raise familiar questions of how much we should care about economic redistribution towards egalitarian goals or towards the goal of reducing absolute poverty, and how much we should care about redistributing wealth vs. creating and supporting shared public services.

I raise in my review essay the further question of what Piketty’s predictions about the increasing importance of wealth and its transmission via families could mean for women’s reproductive rights. As the role of inheritance is already increasing—it was a historical anomaly that the generations in the second half of the twentieth century inherited little—will oligarchy replace the (at least nominal) meritocracy that we dreamed we were creating in the 20th century? What would such oligarchies mean for women? When family relations serve as the conduit for wealth transmission, this situation tends not to be conducive to the protection of women’s reproductive rights.

Let’s add that specific risk to the many reasons why we should take up the general challenge Piketty issues: as wealth accumulates, what would a reasonable—or a radical—wealth egalitarianism look like?

There’s a full day on Piketty (and this time with Piketty in attendance) at the LSE in May. Stay tuned!