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Complaints about capitalism are legion.

Many thinkers claim that capitalism is making our planet uninhabitable. Serious critics usually regard socialism as the logical alternative to capitalism.

Yet what these critics mean by socialism and, even more, how such alternative system could be established, remains very unclear. Significant illumination on both issues is provided by the distinguished and influential French economist Thomas Piketty in three important books: “Capital in the Twenty-First Century” (2014), “Capital and Ideology” (2020) and “A Brief History of Equality” (2022).

Piketty names his concept “participatory socialism.”  It might also be called radical social democracy. Participatory socialism is entirely different than the hierarchical centralized state socialism that existed in the Soviet Union.

Piketty characterizes it as democratic, decentralized, self-managing, ecological and multicultural. Participatory socialism does not abolish private property, but it transforms the latter in a fundamental way. Property becomes a temporary, not a permanent, possession. Extreme concentrations of property are abolished, and wealth is routinely circulated around the entire socialist community.

Between 1910 and 1980, significant increases in economic and social equality happened in all advanced capitalist societies. These egalitarian advances were achieved largely through taxation and social welfare. But after 1980, income and wealth inequality once again moved upward. Today, economic disparity in almost all capitalist societies is extreme and probably intolerable.

Piketty proposes to establish participatory socialism through profound extensions of both taxation and social welfare, plus growth of working-class power, reformation of bourgeois electoral practices and major environmental initiatives.

The basic process undergirding the movement from advanced capitalism to participatory socialism is a steeply graduated yearly wealth tax. This tax would annually appropriate something like 10% of wealth exceeding 100 times the average wealth level and about 60% of wealth surpassing 1,000 times the average wealth amount.

The annual wealth tax would be complemented by highly progressive income and inheritance levies. The wealth and inheritance taxes would fund a democratic wealth allotment, providing about 60% of average wealth to each person at age 25. These taxes and associated wealth allotments would achieve both an egalitarian circulation of capital plus a drastic reduction of wealth inequality.

Individual use of carbon would be measured, and a highly progressive carbon tax would be integrated with the progressive income tax. These combined taxes would yield something like 45% of national income. They would provide an income floor so that no one had less than 60% of average income. They would also fund free education, free health care, secure retirement and a comprehensive environmental program.

These transformations are radical and might even be called revolutionary. But further changes are necessary to establish a durable participatory socialism. To democratize power relations at work, Piketty advocates a bold co-management process, giving workers at least 50% of seats on all enterprise governing boards (and also limiting the votes of individual stock owners).

To democratize elections Piketty suggests the use of equality vouchers along with a strict ceiling on individual political contributions.  An equality voucher is an annual token worth a fixed amount (say $10) distributed to each citizen and which can be allocated to any candidate or political movement of the persons choosing.

Piketty emphasizes that any approach to participatory socialism must be experimental and open to modification on the basis of experience. His own concepts should be regarded as a first approximation of a viable socialist program, not as a fixed doctrine. An important strength of Piketty’s approach is the use of existing institutions of proven effectiveness (taxation and social welfare). It also suggests a plausible strategy for moving from advanced capitalism towards participatory socialism.

Socialists should endeavor to establish progressive wealth taxes, universal wealth allocations, co-management at work, progressive carbon taxes, income floors, free education and health care, etc.  Participatory socialism need not and probably cannot be established in one fell swoop. Incremental progress is possible and may even accelerate, which makes the achievement of socialism much more feasible.

Yet notwithstanding such evolutionary trajectories, Piketty recognizes how important social movements and political crises have been in producing progressive change.

“[W]hat makes historical change possible is above all the existence of social and political mobilizations for change and concrete experimentation with alternative arrangements. History is the product of crises; it never unfolds as textbooks might lead one to expect.” Piketty writes in “Capital and Ideology,” page 967.

Crises are certainly dangerous, but, given the environmental perils that threaten our world, the absence of crises may be even more dangerous. And if crises are indeed necessary for social progress, we can at least be confident that climate change will generate them.