In this second entry of my reading guide to Piketty’s “Capital and Ideology” (Part One is here), we’re going to take an in-depth look at the first section of the book, which focus on the transformation of Western European inequality regimes from what Piketty terms ‘ternary societies’ into the classical liberal ‘propertarianism’ of the nineteenth and early twentieth century. Overall, this is one of the weaker parts of the book, where the limits of Piketty’s historical method are on full display. Piketty’s data on nineteenth century inequality is certainly impressive, his insights meaningful, and when it comes to the history of France he knows his stuff. But grand histories of the transformation of European feudalism into modern capitalism are ubiquitous - we’ve all heard this story before and Piketty brings comparatively little new to the discussion.

Ternary Societies

Piketty’s starting point - his ‘inequality regime’ par excellence - is represented by the feudal structure of Christian Europe, at least as it it was understood by Medieval writers and theologians. In this model, society was divided into three classes - nobles, priests and peasants - who differed in political, economic and social rights but whose interests and roles were balanced against one another as part of a cohesive whole. Piketty wants to make the claim that this three-fold distinction is ‘oldest and most common’ type of inequality regime in the world, shared alike by nomadic tribes, pre-modern agricultural kingdoms, European and Indian feudalism, and elsewhere. This is, of course, grossly ahistorical and under-theorised. It makes little room for city states, militarised empires or bureaucratic regimes, and ignores much of the historical contingencies that played a role in the early construction of European feudalism. So as a category, ‘ternary societies’ may be illusory, but we may be able to make use of it as a somewhat idealised type.

Piketty asserts that all societies have the same needs - ‘meaning’ and ‘security’. In a ternary society, the nobility and clergy legitimise their unequal access to power and wealth through the institutional provision of these public goods in a way that is accepted as legitimate by the other two orders. What matters in a ternary society is that the property rights of the clergy and nobility went hand-in-hand with the quasi-government (‘regalian’) powers they need to exercise their social function of maintaining moral and physical security. In other words, as a serf or tenant farmer, your landlord not only extracted rents and taxes, but exercised judicial and political authority over you; in the same way, your social and family life was regulated by the clergy.

For Piketty, the three estates of pre-Revolutionary France are the archetypal orders of a ternary society, despite the fact that he pays careful attention to the ways in which European feudalism differed significantly from ternary societies on other continents. Celibacy among the Christian clergy largely prevented the establishment of a hereditary priest caste. And the Christian prohibition on cousin-marriage (which is addressed extensively in Jo Henrich’s new book, “The WEIRDEST People in the World”) and gradual embrace of primogeniture inheritance laws meant that the power of the nobility became increasingly concentrated in fewer and fewer hands. The practical upshot is that on the eve of the liberal Revolutions the first two estates were, in a cross-historical and and cross-cultural perspective, shockingly weak, with only 0.7% of the French population belonging to the clergy and 0.8% belonging to the nobility. Nevertheless, the former still owned 25% of France’s land and the latter owned as much as 50%. Clearly, the tension between the political and economic powers of this tiny elite could not longer be justified by their functional contribution to society and a rupture was inevitable. The question was was sort of society would emerge from the ashes?

The first liberalism - propertarianism

The most valuable, and most informed, tracts of this part of the book comes in Chapters 3 & 4, where Piketty deploys an in-depth and well-researched discussion of legislative changes made during the French Revolution to tell the story of how the liberal notion of property rights was first conceptualized and led to the creation of the first liberal inequality regime, which Piketty terms ‘propertarian-ism’. Piketty argues, rather convincingly, that rather than its popular pretensions to radical egalitarianism, the leaders of the Revolution were in fact from the outset involved the construction of a new ownership society in which every citizen of France had, in theory, equal rights to own property, but in which the distribution of that property was deemed a non-justiciable or non-political question. One still encounters elements of this propertarian ideology in modern capitalism, and this rights-based framework remains an essential underpinning of libertarian arguments against redistribution today. It is a conservative, even fatalistic recognition that the origins or all property rights lie in violent expropriation and injustice, but that to question such rights would unleash a uncertainty and disorder potentially worse that the inequalities of the status quo.

Piketty has an insightful quote at the beginning of this narrative, that’s worth citing at length for the way that it pre-figures the sorts of questions that transformative figures in every era of change have to asked themselves about the construction of a just society.

“On the night of August 5, 1789, the French National Assembly voted to abolish the privileges of the clergy and nobility. In the months, weeks and years that followed, the challenge was to establish the dividing line between the prerogatives that should simply be abolished and those that were legitimate and therefore worthy of perpetuation or compensation, perhaps requiring reformulation in a new political and legal language.”

In other words, the demise of one inequality regime does not imply, or even begin to suggest, the demise of the structural inequality that existed under that regime. Rather, the new regime must come up with new ways to justify inequalities that persist. There’s an analogy here with modern intersectional liberalism, I feel, which was done a good job of identifying injustice but has really struggled to explain the persistence and even deepening of economic inequality despite the gradual historical progress made towards racial and gender equality.

Put simply, the legislators of the French Revolution wanted first and foremost to separate public and private powers - to erect a public sphere in which the state had sole authority over laws, justice and morality. But at the same time, they put very strong guard rails around the private sphere of property. The way in which this would be justified would be to make a distinction between those property rights which were historically or linguistically associated with the excessed of the ancien regime, and those ‘just’ rights which were rooted in modern notions of free contract. Of course, these were arbitrary lines being drawn around a centuries-long process of often violent expropriation. But they were the lines that were drawn, and the lines that were to stay, even after the Bourbons returned to the French throne. What made propertarianism so enduring and powerful as an ideology is the way in which it made individual rights - and especially property rights - sacred, regardless of their origin or extent. Then, as now, the invocation of the right to property was to serve once and for all as a stop-gap against further radical redistribution.

For Piketty, the new propertarian order was a failure, but an explicable one. Through his own rigorously gathered data, Piketty shows that the new liberal France of the belle epoque was as fundamentally unequal, if not more so, than the feudal order which it had replaced. The ideological function of the new propertarian regime was to legitimise the perpetuation of gross material inequality for far longer than the previous ternary inequality regime had been able to. Yet for Piketty, we shouldn’t blame late-eighteenth century liberals for this failure - “political actors caught up in fast-moving events often have no choice but to draw on a repertoire of [past] political and economic ideologies. . . at times they may be able to invent new tools on the spur of the moment, but to do so takes time and a capacity for government that is generally lacking”. In other words, when revolutions occur there are only a limited set of examples and counterfactuals leaders can draw upon - as cultural evolution theory suggests, there wasn’t enough information evolve a more complex or egalitarian form of social organisation. Even if some utopians were calling for it, they had no way to overcome majoritarian caution and institutional inertia.

On the Justification of Inequality in Ownership Societies

“If one begins to question property rights acquired in the past, and the inequality that derives from them, in the name of a respectable but always imperfectly defined and contested conception of social justice about which consensus will never be achieved, doesn’t one run the risk of not knowing where this dangerous process will end? Political instability and permanent chows may then ensue . . .redistribution is a Pandora’s Box, which should never be opened”.

It may be that each new inequality regime thinks of itself as the End of History, the end of politics. But this is never so. By the early twentieth century, propertarianism was being torn apart by its own paradoxes - firstly, by the economic inequality it generated at home, secondly by its dependence on imperial conquest and colonial extraction in order to fund its need for constant capital accumulation, and finally, by the vicious and militaristic nationalism which the first two paradoxes unleashed.

Propertarian liberalism was modern in many ways, but regressive in others that we a century-and-a-half later find almost inconceivably rigid and inexplicable. Piketty demonstrates at length the consequences of comically-low levels of taxation in Western Europe on the accumulation of vast fortunes by elites, and how the struggle for voting rights which led slowly but inexorably towards universal suffrage was by-and-large part of the struggle for progressive taxation. What’s fascinating with the benefit of hindsight is how naturally the early liberal order accommodated itself to the idea of attaching property qualifications to voting - that even from the outset of the French Revolution, liberalism made distinctions between ‘active [tax-paying] citizens’ and passive or non-voting citizenship. Hilariously, Piketty shows that in Sweden until the 1920s, some electors could cast as many as a hundred ballots or represent more than half the electorate of their township if they were sufficiently wealthy. It perhaps says something that his model of ownership democracy remains the one extant in modern corporate governance to this day - at odds with ideological values at work in mainstream society.

This brings up an important element of the propertarian inequality regime which has been supplanted by a more moralistic and meritocratic ideology in modern capitalism. According to Piketty’s reading, in the nineteenth century “no trace of heroism remains in ownership society; there is no clear relation between the size of one’s fortune and one’s aptitude or capabilities . . .Each person plays the role assigned by his or her capital.” In other words, because the distribution of wealth in society is beyond question, there can be no thought given to the idea that wealth has either moral causes or consequences. [I would note that the situation was likely different in the United States, where the frontier society likely created an early incarnation of meritocratic, Protestant liberalism in which virtue and wealth went hand-in-hand].

In the end, Piketty’s account of propertarian liberalism - the first of three key variants he’ll discuss over the course of the book - is valuable to understanding the modern capitalist ideology, even as, as we shall see, inequality regimes grew more complex and continued to evolve over the course of the twentieth century.