So, even before Thomas Piketty’s book, the topic of ‘inequality’ had arrived in the economic mainstream, and with the following line of argumentation: inequality and poverty are no longer regarded so much as a consequence of capitalist economic growth, but rather as a brake on such growth and as a problem for stability. [...] What stands at the centre of attention are no longer the problems that the poor have with capitalism, but the problems that the poor pose for capitalism and its growth. The demand that follows from this is no longer a fundamental change of economic system, but merely a correction of the existing one – and not a correction of wealth to the benefit of the poor, but a correction of poverty for the benefit of wealth. The goal is not a better life for people – such a better life is only supposed to be a means of making economic growth smoother and faster. [...]

[...] if all people owned an equal amount of wealth, all of them would equally profit from a strong growth of capital. In fact, however, wealth is unequally distributed, according to Piketty. He does not explain why that is. Rather, he assumes inequality as a given, and examines its development over time. This demonstrates, according to Piketty, that the strong growth of wealth in contrast to that of income exacerbates an inequality characteristic of all societies: those who have, receive (more). The rich become richer. According to Piketty, increasingly inequality is not a coincidence, but rather inscribed into economic development. Piketty says this is the case not only under capitalism, but also in other economic forms. However, Piketty does not wish for this diagnosis of growing inequality to be understood as a call to class struggle: ‘To be clear, my purpose here is not to plead the case of workers against owners but rather to gain as clear as possible a view of reality.’

[...] Only a few years afterwards, however, it underwent a drastic reduction. One reason for this was of course the loss of wealth in the form of ‘war damages’. A further reason was the devaluation of financial wealth in the form of government bonds: government bonds were already held in the eighteenth and nineteenth centuries, but in the course of war financing from 1914 on, their importance increased. After the First World War, these assets were devalued by inflation. In order to minimize the effects of inflation upon the general public and curb the price spiral, rent controls were also introduced, which reduced the returns on real estate. And finally, in their financial need, governments decided upon higher taxes upon inheritance and top incomes, which further eroded wealth – at least in France, Germany, Britain and the US.

This taxation was something new. Before the war ‘tax rates, even on the most astronomical incomes, remained extremely low … This was true everywhere, without exception.’

Hidden behind these pure numbers, however, are radical changes within society. According to Piketty, states used their tax revenues in order to build welfare state structures. With the loss of significance of the super-rich, and a new relation between the state and the market, a new middle class emerged that could build up wealth by means of its labour-power and income. The emergence of this middle class was the result of the decline of the capital–income ratio. [...]

Piketty’s central point of critique is aimed at the legitimation of inequality. Bourgeois society’s self-description, in which inequality is a consequence of different abilities, will no longer be accurate in the future. To make a long story short: effort will no longer be worth it.

While Piketty attacks the dominant economic form, capitalism, he never argues in an anti-capitalist way. First of all, his ‘laws of distribution’ according to his work are valid in every economic formation, not just in capitalism (which he also leaves conceptually vague). For Piketty, growing inequality is a law of wealth per se, not of a specifically capitalist form of wealth. Secondly, his political demands do not amount to a fundamental transformation of the system, but rather are limited to a few changes in the tax system, which are supposed to make capitalism more stable. Piketty’s enormously constructive critique of capitalism makes him compatible to the reigning crisis discourse. Despite all coquetry, Piketty never misses a chance to distance himself from Marx’s ideas (which are attributed to him).

Piketty regards the dominant economic system completely positively. All of his criticisms of conditions and their development are not intended as a principled objection to the capitalist mode of production and distribution. The ideal condition he strives for is a prosperous capitalism characterized by economic growth. Critique of growth as such is foreign to Piketty. And he only criticizes inequality to the extent that it could damage growth and the legitimacy of capitalism. In this sense, he is both progressive and conservative: he wants to change something in order to maintain social relations as they are. He wants to protect capitalism from the poor – not the other way around. That’s not anything that one has to ‘uncover’, but rather it is his openly formulated ‘programme’: ‘I admire capitalism; I admire private property, and I admire the market economy. Of course I recognize that economic growth occurs principally in capitalism. Of course I cling to private property, because it is the foundation of our freedom. There was never as much capital as today. I was 18 years old, when the Berlin Wall fell. I belong to a generation that never had sympathy for Communism.’

[...] On the one hand, inequality appears to be only explainable in terms of different levels of labour performance and therefore only legitimate in terms of labour performance; on the other hand, reality shows that this is not the case. That is the background as to why Piketty moves in circles. He thus ends up arguing that inequality is growing because inequality exists. He argues in a circular fashion, without explaining how ‘original’ inequality came into the world at all, and which socially specific inequality characterizes capitalism: the separation of direct producers from the objective possibilities of production. Piketty thus has noticeably little to say about the manner in which inequality arises and persists in capitalism. That has consequences.

Concerning risk: it is true that whoever lends money takes the risk that he or she might not see that money ever again. And the greater this risk is, the greater the interest demanded will tend to be. That does not mean, however, that interest is the ‘just wage’ for risk. In fact, the reverse is the case: capitalists want to increase their money, make a return on it. That is their goal. To do that, however, they have to take a risk. Their profit is not compensation for a risk. On the contrary: the risk is the condition for the profit. The profit motive comes first. A car company also does not want to produce and distribute cars, thus taking on a risk and receiving profits as ‘compensation’ for the risk. The risk is, by the way, not something natural, but rather socially conditioned: in capitalism, an investment is risky because all competitors want to make profits and struggle with each other for market share, but not all are able to succeed. To state things more generally: in a society in which production is not regulated in a cooperative and political manner, but rather commodities are produced for an anonymous market, it is only revealed in retrospect whether the investment was worth it, whether the product produced is actually sold. The entrepreneurial risk thus arises not solely through the profit orientation, but already due to production for an anonymous market.

[...] The wage does not pay for labour, but rather for the disposal of labour-power for a specific period of time. During working time, the enterprise applies labour in order to make a profit – that is to say, to extract output from the workers that has a monetary value greater than that which they receive as a wage. That is possible because only the disposal over the ability to perform labour (labour-power) is paid, and the workers do not receive a wage corresponding to the value product produced by their labour. That is how it is possible in the first place that the success of the business can be measured in terms of profits – in terms of that which the workers precisely do not receive: surplus-labour. The struggle for shares of social income occurs permanently, its foundation is a negative dependence: capital and labour need each other, but at the same time stand in opposition to each other.