Capital, Ideology, and the Liberal Order
26 Pages Posted: 28 Aug 2021 Last revised: 29 Oct 2021
Date Written: August 26, 2021
Abstract
Thomas Piketty’s Capital and Ideology (2020) offers a powerful critique of ideological justifications for inequality in capitalist societies. Does this mean we should reject capitalist institutions altogether? This paper defends some aspects of capitalism by explaining the epistemic function of market economies and their ability to harness capital to meet the needs of the relatively disadvantaged. We support this classical liberal position with reference to empirical research on historical trends in inequality that challenges some of Piketty’s interpretations of the data. Then we discuss the implications of this position in terms of limits on the efficacy of participatory governance within firms and the capacity of the state to levy systematic taxes on wealth.
Keywords: Piketty, wealth inequality, consumption inequality, measuring inequality, classical liberalism, Austrian economics, knowledge problem, participatory socialism, private-property markets
JEL Classification: B53, A13, D31
Suggested Citation: Suggested Citation