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Primogeniture is in the index, but not primitive accumulation. There’s no entry for expropriation, nor enclosure. The index contains no mention of race and racism, but it does direct us to multiple lengthy discussions of Rastignac’s dilemma. There’s also no mention of Native Americans, even though a good chunk of the book is about North America in the 19th Century, but in the index of Thomas Piketty’s 577-page autopsy of over 300 years of capitalist economic development you will find an entry for “Indicial tax system” about where an entry for indigenous should be.
This is perhaps the biggest hole in Piketty’s otherwise masterful and challenging text on political economy: he hasn’t incorporated the role of race as a central inequality in the origins and expansion of capitalism.
To be sure, Piketty has written a very detailed account on the means by which wealth has almost always tended to gain at the expense of labor all over the earth, except during one brief period in the middle of the 20th Century. The book has gotten very favorable reviews, from both mainstream economists and more free-thinking scholars. Conservatives seem downright intimidated and silenced by Piketty’s masterful use of the language of economics to tell a story that pretty much shatters the conventional thinking of how economies develop. We can all finally and forever kiss Kuznets and his optimistic curve goodbye.
It’s obvious that Piketty aspires for his book to take its place in the canon of social science literature on economics. And this is a deserving aspiration. Piketty has assembled a giant body of data, and crafted a compelling narrative to explain it. He takes us from the 1700s to the present, showing empirically how capital dominates labor, how rents rise in real terms, and fortunes grow while hard work becomes of less importance for individuals to get ahead. His scope allows him to cut through the static of volatility in stock and bond markets, credit bubbles, wars, booms and depressions, and look at the systemic instability of the process of accumulation on national and global levels. Piketty also escapes a lot of the traps of economics, an academic discipline that especially in the United States has become so quantitative and theoretical that it hardly has anything to say about the reality of power anymore.
While I don’t claim to fully grasp everything Piketty is saying in Capital in the Twenty First Century, it is apparent from my first reading of the book that he’s left out a few important historical facts about the origins and growth of the world capitalist system. The biggest among them are the racial and colonial means by which Western European nations and the United States climbed to the top of the global capitalist system, enriching themselves with levels of wealth equivalent in value to many years of national income. Considering some of these facts would, in my mind, alter some of the big picture statistical series Piketty uses to make his points, and might also alter his conclusions about what is to be done to reduce inequality and democratize the economy. Take Africa, for example.
Piketty does tell us about Africa. He starts by showing us that national incomes for the United States, Western Europe, and Japan are slightly greater than their domestic products today. That is, these nations enjoy income greater than the total of goods and services produced inside their borders, meaning that they gain additional income from capital they own abroad. This is a sort of equilibrium in which wealth that flows out of America or Europe is replaced by wealth flowing in from another region. Indeed, for Britain and France in the 19th and early 20th Centuries a huge surplus of income flowed in from their colonies. This was wealth acquired through wars of colonial aggression, income arriving under the barrel of a gun.
“The only continent not in equilibrium is Africa,” explains Piketty, “where a substantial share of capital is owned by foreigners.” Piketty’s talking about the present, not some supposedly prior era when he writes this.
“According to the balance of payments data compiled since 1970 by the United Nations and other international organizations such at the World Bank and International Monetary Fund, the income of
Africans is roughly 5 percent less than the continent’s output (and as high as 10 percent lower in some individual countries.)” Piketty’s calculations show that as much as 20 percent of the capital stock of Africa is owned by foreigners, mostly Europeans, some Americans, and recently the Chinese.
The most accurate term for this relationship of extraction is plunder, and the historical origins of it go back to the European colonization of Africa, a mission that was accomplished only by murdering countless resistors. Without establishing this fact, and accounting for ongoing wars and efforts to destabilize African politics by Europe and the United States, it’s impossible to account for the situation in which foreigners own so much of the capital in Africa, and extract value equivalent a significant percentage of the continents yearly output.
Today the outflow of wealth from Africa might take the immediate form of sovereign debt payments and ownership of African industries and land by foreigners who repatriate their earnings, but this economic imbalance was itself created through war. Piketty doesn’t ever get to this discussion, however, even though it occurred during the centuries for which his data sets supposedly give us sweeping macro economic views of the global system, especially the 1800s. Instead his explanation remains rather sanitized, focused on statistics like net national incomes from capital, and other aggregations. His discussion of colonialism is confined to about 4 pages.
This leads to a rather shallow and disappointing discussion of American capitalism especially. For example, Piketty points out that in the total capital stock of the United States, since its founding to the present, land never accounted for the same proportion of the total wealth as it did in crowded France and the UK. His explanation is that land was scarce in Europe and thus of higher value. By contrast Piketty writes, “there was so much land [in North America] that its market value was very low: anyone could own vast quantities, and therefore it was not worth very much.”
But land was only abundant and available for private ownership in vast quantities at cheap prices in the Americas because it was stolen from the indigenous nations, starting in the Caribbean islands and then spreading to massive outright thefts of land in what is today New York, Massachusetts and the rest of the East Coast.
Later Andrew Jackson conducted forced marches to eradicate the Choctow, Cherokee, and other tribes from the rich agricultural floodplains coveted by the American slave-owning plantocracy as well as white yoemen farmers. In California the United States arrived to complete a continental genocide, finishing up the savagery by blasting mountains into mud to excavate untold billions in gold ore. Like the land in California, the gold, and eventually also the oil beneath it, and even today the urban real estate which is among the most expensive in the world, could never have been incorporated into the American economy and accumulated in certain hands, were it not for the racial othering of the West Coast tribes.
The value of land in America was clearly not being determined by any market, at least not any market that wasn’t first set up and shaped from the very start by a racial regime that allowed for expropriation. Land values were being subsidized downward by forceful dispossession, and then again by racial and gendered laws that made owning land impossible to all but white men. We can see this today in the recent refusal of the Lakota Sioux to accept $1.8 billion in payment for the Black Hills. The Black Hills were outright stolen by a mob of white settlers who followed Geneal Custer and did not succumb to his fate. The settlers stripped the Black Hills of timber, gold and other minerals worth untold amounts. The Supreme Court of the United States recognized this in 1980 by establishing a $102 million trust, but the tribe has rejected it because it would constitute payment for lands that were never sold, that many Indians argue can still never be sold.
Any discussion of capitalism in early American that leaves out these fundamental facts is lacking in its ability to explain prices of assets like land, for if the land hadn’t been available for privatization in such quantities it would have been a very different story of economic development. If white Americans had not developed an ideology of racial supremacy that led them to eradicate entire nations of people, to round them up into prison camps, and steal their homelands for settlement and exploitation by mining and timber and plantation interests, the whole issue of inequality in America today would be entirely different.
Piketty seems to grasp the importance of race in American capitalism when it comes to slavery, and he incorporates slaves into his measurements of capital in the antebellum United States. The racial ideology and colonial system of power that made the slave trade possible created a whole category of capital that has virtually disappeared today: capital as the human body. A remarkable, and disturbing finding of Piketty’s is that even though American planters in the first half of the 19th Century owned land that was low in value, the American plantocracy still was far wealthier than the aristocratic landlords of Europe.
“Their farmland was not worth very much,” writes Piketty, “but since the had the bright idea of owning not just the land but also the labor force needed to work that land, their total capital was even greater.”
Honestly I’m not disappointed by Piketty’s lack of willingness to tackle the central role of race in the development of capitalism. It’s not what his book is setting out to do. What he does set out to accomplish, he achieves with more data and clarity than any economist has done in practically a generation.
The worrisome, and very convincing conclusion he reaches, is that in the 21st Century inequality is likely to worsen in the United States, Europe, Japan, and other nations where growth has slowed, both demographically, and in terms of economic output. It will get worse even if somehow, miraculously, human rights are universally respected, and there are no further thefts of land and natural capital (or predatory and racially discriminatory bank lending, to give a much more current example of racial capitalism at work).
In this context capital, that is land, securities such as shares and bonds in corporations and government debts, rents extracted from housing and commercial space, and other forms of wealth, will claim increasingly larger shares of the flow of income. The top one will crush the bottom half of society. The top ten percent will monopolize the ownership of capital and suck up larger shares of the flow of income, dominating the political process in way that only worsen the situation (pushing for greater tax cuts on wealth).
Piketty’s prescription to stem inequality is a global progressive tax on wealth that would redistribute income downward and create security for the majority of humanity who own little or nothing besides their labor.
But then if race and colonialism had been a central part of his analysis too, might he also be offering reparations, debt jubilees, and other forms of capital redistribution as a possible solution to the grotesque imbalance of wealth? After all, much of the capital inequality between nations, and between different racial groups today, is a direct result of colonization, slavery, and plunder.
Darwin Bond-Graham, a contributing editor to CounterPunch, is a sociologist and author who lives and works in Oakland, CA. His essay on economic inequality in the “new” California economy appears in the July issue of CounterPunch magazine. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion