Worst Camping Trip Ever?

Endurance. An Epic of Polar Adventure by F.A. Worsley. W.W. Norton and Co. New York. 1931. (With an Introduction by Patrick O’Brien, 1999)

 Worsley was in command of Endurance, the ship that carried Earnest Shackleton’s 1914 expedition to cross Antarctica. Caught in the pack ice in the Weddell Sea, from February to November 1915 the Endurance drifted until she was crushed and sunk. From then until April, the twenty-eight men camped on the ice in thin canvas tents, without floors, on limited rations. They made several attempts to march north, an exhausting job over the rough and broken ice, until they were finally able to launch their three lifeboats to cross to Elephant Island, one of the last bits of land off the tip of the Antarctic Peninsula. Here, most of them camped under the shelter of two overturned boats, while Shackleton, Worsley and four others made a dangerous sixteen-day trip in the third boat to South Georgia. That they arrived there and did not simply sail on into the endless South Atlantic to sink or starve is testimony to the nearly legendary navigational skill of Worsley, who learned the craft traveling to remote islands while working for the British South Pacific Service. To cap this remarkable feat, Shackleton, Worsley and a third man had to cross the island to reach the whaling station on the south shore. This they did during the only window of weather for months when it was possible to struggle over the mountains and glaciers with any chance of surviving.

 Having found help and picked up the other three men, they headed straight for Elephant Island, but the pack ice blocked the way. Only on the fourth try, in their fourth borrowed ship, starting from Punta Arenas, Chile, near Tierra del Fuego, did they reach the stranded crew on August 30, 1916. All twenty-eight of Shackleton’s men had survived. Ironically, several soon perished while serving in the First World War, which had been going on the entire time they were away. Before they returned to England, however, they were honored by the Chileans of Punta Arenas with a banquet. The Chilean guests rose one by one to drink a glass of wine with the Brits, resulting in each hero having to consume multiple glasses while their hosts remained relatively sober. Shackleton, who drank little, was permitted to withdraw, but when the rest tried to follow a bit later, they were sent back at bayonet point by Chilean soldiers, who were under orders to allow no sober English, nor even any not sufficiently drunk, to pass.

Afterwards, Worsley served in the Royal Naval Reserve, commanding an anti-submarine ship. He sank a German U-boat by ramming it. He was also in the British Northern Russia Expedition against the Red army. After the war, he knocked around, leading several difficult trips to the Arctic but usually ending up in financial difficulties. Finally, in 1922, Shackleton took him on again for another Antarctic expedition, but Shackleton died on the trip south. After one more arctic voyage and an unsuccessful treasure hunt on Cocos Island, Costa Rica, Worsley spent the interwar years writing and lecturing. He lied about his age to secure a command in the Merchant Navy in 1941, but he was soon found out and put to work as a training officer on shore. He died in 1943 of lung cancer.

All I can say is that, as far as putting up with cold, hunger and strenuous exercise, even more than the early Mount Everest climbers, those guys were tough. Furthermore, the men in charge of the different parties were good at maintaining discipline and morale, keeping up a routine that included regular musical performances as well as hunting expeditions. In more than two years, there seems to have been only a single hint of mutiny: at one point, the ship’s carpenter, claiming (like Steven Hopkins – see my earlier post on the Sea Venture) that the loss of the Endurance set them free from Shackleton’s command, refused to go on. Shackleton stood firm and convinced him to stick. The other factor in the crew’s favor was that unlike the early English voyages to places like America, there were neither indigenous people to antagonize nor much in the way of infectious diseases to contend with. One man lost a foot to gangrene following frostbite, but there were two doctors in the party and an anesthetic, so it went well. They also got enough fresh meat to keep scurvy at bay. A final minor miracle of the trip was that a large number of their photographic negatives survived, giving us an amazing visual record of what they endured.

 Worsley is a good writer; the book is the sort to read in a few big chunks with much satisfaction and amazement.

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Nearctic Travels: Shipwreck and Shakespeare

A Brave Vessel: The True Tale of the Castaways Who Rescued Jamestown and Inspired Shakespeare’s The Tempest by Hobson Woodward. New York. Viking Press. 2009.

[Image from A young people’s history of Virginia and Virginians. 1896 by D.H. Maury]

 Woodward tells the story of the Sea Venture, the flagship of the 1609 supply fleet sent by the Virginia Company to support its colony at Jamestown. Caught in a hurricane and run aground on Bermuda, Sea Venture’s crew and passengers survived and spent nearly a year on the islands, until they could construct two new ships to complete the trip to Virginia. Among the passengers was William Strachey, a down on his luck gentleman, who aspired to literary fame. He was made secretary to successive governors of the Jamestown Colony and sent an official report and a private letter describing the events of the voyage. Woodward believes, largely on the basis of textual similarities, that the private letter was a major source for The Tempest.

The first part of the book covers the experiences of the Sea Venture castaways from England to Bermuda and Virginia and back to England, using Strachey and other historical sources. The second part deals more speculatively with how Shakespeare composed The Tempest, drawing out in detail similarities and coincidences between Strachey’s letter and the plot, characters and language of the play. Woodward has little to go on here, but he at least makes a plausible case for Shakespeare having read a copy of Strachey’s account.

 My interest in this very readable book was sparked by its references to another passenger on the Sea Venture, Steven Hopkins. Described as a “shopkeeper from Hampshire” who knew the Scriptures well enough to become clerk to the minister aboard ship, he is notable for having attempted to organize a mutiny on Bermuda. His goal was apparently to remain on the island and not be taken to Virginia, on the grounds that the passengers’ contract with the company was voided by the shipwreck. He was informed on to the military commander of the expedition, Thomas Gates, who put him on trial for his life. According to Strachey, Hopkins was so eloquent in pleading that his wife and children back in Hampshire would be ruined if he were hanged that most of the gentlemen in the group argued for leniency. Gates relented, and Hopkins survived his time in Bermuda and Virginia and returned to England. He later joined the Mayflower, with his second wife and children. Though not a member of the Pilgrims’ sect, he was taken on as someone who knew the land and native people of Virginia, which is where the Mayflower was supposed to be going. Hopkins’s wife gave birth while at sea, and his family was one of only two not to lose anyone on the voyage. In Plymouth, he helped negotiate a treaty with the natives that remained unbroken for the life of the signers and also ran the settlement’s first tavern. His female descendants married into some of the leading families of Massachusetts. I find it amazing that this man was part of three of the most remarkable English ventures in North America, especially since I may be distantly related through a female ancestor from one of those New England families. I’m currently learning more about him, because whether or not we are related, his story deserves to be more widely known.

A Brave Vessel is well worth reading for a sea story, as gripping as Joseph Conrad’s Typhoon, and as a look at the struggles of the English to establish a foothold in America. Woodward describes all the suffering that followed from the conflicts between colonizers and natives as well as within the English society attempting to transplant itself across the ocean. He also touches on the ecological and climatological factors that helped and hindered their efforts. The severe drought that bracketed the early years of the Virginia colony greatly increased the stress on both natives and colonists and led to the “starving time” in the winter of 1609-1610, which the arrival of the ships from Bermuda helped relieve. During those same months on Bermuda, the castaways lived well on fish, nesting seabirds and their eggs, green sea turtles, and the introduced pigs, left by earlier Spanish seafarers. The native plants, including palmetto and Bermuda cedar furnished food and drink as well as timber for building the two ships, Deliverance and Patience. The plenitude and mild climate of the islands undoubtedly were factors in Steven Hopkins near fatal desire to remain there.

 Bermuda became an English colony and suffered great ecological changes, including the near extinction of its endemic cedars and the cahow or Bermuda petrel, whose strange nocturnal calls helped give the islands their early reputation as haunted by devils. Bermuda’s roles in supporting the earliest ventures of England into North America and in inspiring one of the greatest English plays remain points of local pride. I wonder if Steven Hopkins dreamed of Bermuda during the dreary New England winters.

Playful Explorations

Atom Land: A Guided Tour Through the Strange (And Impossibly Small) World of Particle Physics by Jon Butterworth. The Experiment. New York. 2018.

A Mind at Play: How Claude Shannon Invented the Information Age by Jimmy Soni and Rob Goodman. Simon & Schuster. New York. 2017.

Genius at Play: The Curious Mind of John Horton Conway by Siobhan Roberts. Bloomsbury USA. 2015.

 These three books form a progression from the most concrete to the most abstract or, taking a different point of view, from the most serious to the most playful. At the same time all three are in different ways, highly imaginative.

The first is an account of particle physics, framed as a voyage into the unknown waters of the atomic and subatomic scales in the natural world, accompanied by charts at the beginning of each section that map physicists’ increasing knowledge as they probe matter at ever higher energies. The classes of particles recognized by current theory are shown as islands, while the forces that link them are shown as connections – electromagnetism as bridges traversed by cars, the strong force as sea lanes crossed by boats and the weak force as airplane routes. Butterworth describes the steps by which these waters were charted, from the development of the atomic theory of matter to the Standard Model, which culminated recently with the finding of the Higgs boson, using the Large Hadron Collider.

This model is a triumph of the partnership between theoretical and experimental physics, relying on both advanced mathematics and powerful machines, such as particle colliders  for achieving high energy at incredibly tiny scales and sophisticated detectors for examining the resulting products. Both the mathematical calculations and the engineering are among the most challenging being carried out anywhere in the world, and it is an open question how much deeper we can push these explorations.

Butterworth concludes by describing some of the conjectures and hints of what lies beyond (at even higher energies) cast in the form of sailors’ tales of the prodigies and monsters found in uncharted waters, like dark matter and energy, super symmetry and string theories. His account spares his reader all but the most basic mathematics and yet provides a very helpful overview of the current theory of our physical universe as well as an enjoyable tale.

The second book is a biography of the pioneer of communications theory, Claude Shannon, mathematician and engineer, whose work helped provide the basis for today’s digital computers and the entire structure of information technology built on their power. Shannon is a man who loved both thinking and tinkering and who was fortunate to be brilliant enough to be allowed to make those activities his career, without having to worry too much about where it all led. His most influential work, A Mathematical Theory of Communication, changed the way communications engineers thought about their work by eliminating the focus on the mechanism (telegraph, telephone, radio, television) and instead considering the fundamental logic of information. Among his key contributions were a focus on probability and his demonstration that all messages can be reduced to simple binary codes, consisting of “bits.” His basic measure of information is familiar to me from my days as an ecology graduate student, because it can be repurposed as a way of measuring species diversity in samples of organisms. This was one of my first experiences with the idea that information is a property of more than just human communications. The authors discuss the way in which the concept of information ( especially its conceptualization as uncertainty or randomness) pervades many aspects of modern science. They warn that this may prove just another version of the old “clockwork universe,” an example of the tendency to imagine nature in terms of our own inventions. Still, there is no doubting the extent of Shannon’s influence.

Despite his reputation, and despite being associated with many of the greatest minds of the twentieth century at Bell Labs and MIT, Shannon preferred his private family life and his playful activities, from robot building to unicycle riding, over fame and influence. He and his mathematician wife, Betty, spent much time devising toys and games, some quite sophisticated, including one of the earliest chess playing computers. He could accomplish amazing results with erector sets and a few switches and relays, like a juggling robot, dressed to look like W.C. Fields. He had earned, in the eyes of his employers, the right to pursue these activities by his amazing early achievements. Perhaps as robots and IT gradually take away the need for so many to spend lives in repetitive toil, more of us will be able to enjoy such a playful existence.

The last book suggests what a life of pure play might look like. I heard and saw John Conway at my institution many years ago giving a talk and demonstration on knots. It was a virtuoso performance, culminating it a dance in which a group of volunteers from the audience followed his directions to turn themselves into an amazingly elaborate pattern while joined together by a web of pieces of rope. I don’t recall the final result except that it was quite astonishing. Conway is widely known as the inventor of Conway’s Game of Life and of surreal numbers, among the numerous mathematical subjects that have engaged his attention over the years. The game of life has become a staple among computer pastimes, both because of the fascinating and sometimes beautiful patterns it generates and because of the way it models self replication and the universal Turing machine (the mathematical essence of computers). Indeed, as the Wikipedia article on the game notes, with those two properties, it can be thought of as modeling life itself, at least as mathematically defined.

Conway is in Roberts’ account perpetually at play, and like a heedless child, he leaves messes everywhere he lights. His offices at various venerable centers of mathematical research have been famous for the nearly impenetrable heaps of toys, games and paper constructions he accumulates. Conway loves games (he sees every game as a number, indeed games for him seem to underlie numbers, and provide a basic way to conceive of his surreal numbers). His method of solving problems is frequently to construct something or use a game as a model. His play leads to real mathematical discoveries, however, and other mathematicians, including some far more serious in demeanor than Conway, have been eager to collaborate with him on major projects.

Roberts biography is interspersed with accounts of her interactions with Conway during the time she was gathering material from and about him. Someone referred to the book as “metabiography,” since its making is part of the story, and it certainly manages to convey some of the strangeness of a life so dedicated to play. Mathematics, like tinkering, is one of the most primal forms play can take. When our educators come to understand that learning is about how to live and not just how to earn a living, they will have new and even better reasons to be sure everyone learns the fundamentals. We all need math to open up the horizons of beauty and pleasure.

 I know I’m going to keep rereading these books and also plunge into the colder waters of Wikipedia to try to better understand some of the concepts presented, but for now, I will post these impressions.

Palearctic travelers

The Horse, the Wheel and Language by David W. Anthony, Princeton University Press, 2007.

 This very rich and fascinating book details the development of our understanding of the history of the Indo European family of languages, from the latest common set of dialects spoken by people living in the steppes north of the Black and Caspian seas in southeastern Europe and southwestern Asia. David Anthony covers the time from the earliest diffusion of agriculture and domesticated animals out of Mesopotamia into southeastern Europe and the subsequent gradual spread out into the steppes. His key thesis is that the domestication of the wild horses of the steppes and their subsequent use as mounts, followed by the introduction of the wagon and the war chariot gave steppe tribes a mobility that enabled them to move long distances, eventually into central Europe and the Indian subcontinent, creating a bridge across cultural regions that by the late bronze age extended as far as China. Thus their language became the dominant family of languages over a vast geographic area.

 To begin with, Anthony, an archaeologist, provides an account of the linguistic evidence for a common ancestral language. The history was derived from careful analysis of phonetic and morphological changes among closely and distantly related languages. This work has been going on since the 18th century, when Europeans first began to suspect that their languages and those of India were akin to one another. This process is very much like reconstructing a biological lineage from genetic and morphological data on living or fossil specimens. It is always only the best hypothesis to explain the data at hand, but lots of work gradually leads to trustworthy results. Interestingly, linguists and evolutionary biologists employ many of the same computer programs. Anthony argues that with the predictive capacity of these explanations and the help of inscriptions dating to some of the earliest writing, we can be reasonably certain that we know some 1500 root words of Proto Indo European as well as many more terms derived from them.

 In a long series of chapters, he goes through the archaeological evidence to reconstruct the culture and characteristics of the speakers of Proto Indo European as well as how they came to be capable of leaving their steppe home and spreading out so far. Technological change is a key factor: the period covered extends from the late Neolithic to the Bronze Age. Tools, weapons, household goods and prestige items were all important. So was the domestication of the horse and the new kinds of both herding and livestock raiding that riding horses made possible. Climate change was another key factor: cold, dry periods favored herding over farming and led to wars that destroyed thriving agricultural settlements on the edges of the steppes. Cultural change was evident all along as settlement patterns, burial styles and material goods changed, indicating, according to Anthony, the rise of more male centered and hierarchical societies on the steppes – in other words the rise of the chieftain and possibly the priest, as had also happened in the city states of Mesopotamia. At some point the wheel spread into the steppe from the south.

 In the steppe, horseback riding and the wagon facilitated an mobile style of herding that also could be accompanied by cattle raiding, looting and trading, which in turn led some to accumulate greater wealth in herds and goods, including copper and bronze weapons and ornaments. Harsher climates also contributed to this increase in social inequality. Anthony argues from linguistic evidence that the speakers of Proto Indo European developed two key social systems that enabled them to dominate the cultures that they encountered in their expansion out of the steppe: patron-client and guest-host. The former stabilized and solidified the pattern of social inequality; the latter made possible firm alliances among groups from both similar and different cultures on the basis of reciprocal obligation (the Indo European root for “guest” and “host” is the same). These, plus the ability of mobile herders to make long distance migrations and easily establish themselves wherever pasture could be found, profoundly shaped the future history of Eurasia. Sometimes raiding and warfare must have been involved in the spread of these peoples, but not the sorts of mobile armies (think of the Mongol hordes) seen in the iron ages and Medieval times; those were a much later development. The primary way the Indo European culture spread, according to Anthony, was incremental. A few powerful chiefs established themselves in new territory, either as patrons or as guest/hosts, and their superior wealth, culture and technology gradually won over the locals. Horseback riding and chariots (possibly invented in the steppe) were rapidly adopted in Europe, the Middle East and China, while the Indo European language evolved into multiple major branches, eventually extending from the British Isles to India.

 Since the publication of this book, genetic studies of ancient Europeans have been published that are consistent with the overall picture given here. About the time suggested by Anthony for the initial spread of Indo European dialects into Eastern Europe, there was an significant spread of DNA, especially that of males, from the steppes north of the Black Sea into Europe. News reports from Science in 2015 and 2017 describes these studies as does a recent news article in Scientific American. The evidence, however, raises many questions. For instance, there are also significant indications that European genes spread into the steppes. This could be explained if long distance trading or raiding, involving wives or children brought back by returning parties were significant, as well as children fathered by the migrants/visitors in Europe. It doesn’t rule out long distance migration and colonization by steppe peoples as well, but it suggests that the picture was complicated. Genes, culture and language spread together, with or without large-scale migration, in Anthony’s scenario.

What makes Anthony’s account particularly cogent, and better than any of the news stories, is his attention to detail, particularly in laying out the linguistic and archeological evidence. It’s a lot to take in, but we can be grateful for his scholarship and willingness to cross disciplinary boundaries.

JOURNEYS TOWARDS FREEDOM AND EQUALITY

A Self-Made Man: The Political Life of Abraham Lincoln Vol. I, 1809 – 1849 by Sidney Blumenthal. Simon and Schuster. 2016.

The Politicians and the Egalitarians: The Hidden History of American Politics by Sean Wilentz. W.W. Norton & Co. 2017.

Two excellent books, the first minutely detailed, the second done in broad strokes of the historian’s brush, but illustrated with telling specifics. Both show how the struggle for freedom and equality in the United States has succeeded when idealists have found a successful political leader, with the skill to get things done through government action.

Blumenthal traces the process by which Abraham Lincoln went from poor white settler on the western frontier to well established lawyer and politician, on the cusp of turning his conviction that slavery was unjust and should be confined to the states where it already existed, into full blown opposition to slavery everywhere. Blumenthal’s second volume, Wrestling with his Angel, covers the years 1849-1856, when this conviction became more firmly set, and Lincoln joined the nascent Republican Party.

Part of the pleasure of this book is the details of Lincoln’s political activity during the ferment of the 1830s and 40s, the age of the Jacksonian Democrats and Whigs. I wrote about some of this earlier, in my post about Joshua Gidding’s The Exiles of Florida. In those days local party-affiliated newspapers provided outlet for the kinds of extravagant political commentary that thrives today on Facebook, and the partisanship was, if anything, even more violent, with dueling still sometimes practiced and plenty of plain old brawling. Lincoln was no simple country lawyer, telling homely stories about widows and lost horses, but an accomplished political satirist with a knack for vicious caricature, much of it printed anonymously. He had some fights, though he seems to have generally avoided them.

One of the most interesting sections for me was the account of the Mormons in Illinois and Missouri during this period, just before the migration to Utah. Their penchant for violence, even if cast as self defense, and the methods used to gain and keep adherents, make all but the nastiest of today’s cults seem not so bad. Lincoln and Illinois politicians both courted and feared these fanatics, eventually turning against Joseph Smith and accepting his murder with little indignation. This sort of mob violence became more common as politics became more polarized, leading up to the destruction of anti-slavery newspaper offices and, in one famous case, the murder of the editor.

Lincoln’s experience with politics up to 1848 was mostly in party caucuses and the Illinois legislature, with a single term in the House of Representatives. There, he was an active supporter of efforts to counter what was beginning to emerge as the Slave Power, the unified southern bloc that was determined to expand slavery as far as possible. Unlike many of the founding generation, who at least paid lip service to the idea that slavery was incompatible with the ideals of the Declaration of Independence, these men argued that it was a positive good and that southern society was morally superior to that of the North. Lincoln estimated that he had voted at least fifty times in the House for the Wilmott Proviso, an amendment that would have banned slavery in the new territory acquired in the Mexican War.

I’m looking forward to reading the next volume.

Wilentz’s book covers the same history as Blumenthal’s book in essays on Lincoln, Andrew Jackson and Frederick Douglas. There’s also one on John Brown. Besides these, he writes about Thomas Paine, Thomas Jefferson, Teddy Roosevelt, Franklin Roosevelt and Lyndon Johnson. He briefly touches on many others who can be classified as either egalitarian idealists or politicians who fought for freedom and equality. Throughout, his central point is that idealism by itself accomplishes nothing: only when joined to astute political manipulation can it take concrete form. Besides this, he challenges specific authors who have seen in men like Lincoln and Johnson sudden epiphanies that led them to do great and good things despite their basically rotten political nature. He argues strenuously that these men’s core beliefs in freedom and equality grew up naturally as they matured and rose to power, often at odds with other ideas and attitudes, but never appearing by magic at the singular moment.

Wilentz thinks that a deep seated American distrust of party politics, from the early founders like Washington and John Adams to the vast numbers of citizens who today claim to be independents, is fundamentally wrong headed. He thinks that partisanship, even as parties form and dissolve and change their spots, like the modern GOP, are essential to the progress that we have made since 1787. From 1860s and 70s Republicans, to the 1960s and 70s Democrats, he cites the ways powerful party leaders were able to pass such vital legislation as the Thirteenth and Fourteenth Amendments, the wage and hour laws, the progressive income tax, Social Security, the Fair Labor Standards Act and the Civil Rights and Voting Rights Acts. These are the changes that make a real difference in the lives of ordinary people, and we ought to be alarmed when politicians and judges begin to chip away at their protections, but we can only resist effectively by petitioning and protesting in ways that lead to concrete political action. Wilentz uses John Brown to argue that violent protest is generally counter-productive in American politics. The Homestead Strike is another example he gives to show how reactionary forces take any hint of violence (in that case, threats by anarchists) as a pretext for even more violent repression, to the great loss of those trying to achieve real gains.

Reading Wilentz’s broad depiction of the sweep of the American struggle for freedom and equality makes me want to go even deeper into these causes. I have loved Robert Caro’s Lyndon Johnson, despite his bias against the man, and as a high schooler I enjoyed delving into labor history, including one of my idealist heroes, Clarence Darrow, through such books as his own Attorney for the Damned (1957). I need to learn more about  periods such as Reconstruction and about areas Wilentz does not discuss, like women’s rights. There is no lack of fascinating and inspiring history along these many and various paths.

Global Voyager

Maya Jasanoff. Dawn Watch. Joseph Conrad in a Global World. Penguin Press. 2017.

Jasanoff’s biography is both an appraisal of Conrad’s career as an author and the influences on his life and work of the rapid global expansion of commerce and imperial ambition in the second half of the nineteenth century. She describes his childhood in partitioned and occupied Poland, where his father was a idealistic revolutionary, exiled for much of his life. Conrad was inspired to go to sea at age sixteen after reading, among other works, the seafaring novels of James Fenimore Cooper, which I did not realize the author of Leatherstocking Tales had written. He eventually made his way to England, at that time the country most open to expatriates and the greatest maritime power.

 Rising through the ranks of the merchant navy to become a licensed master, he voyaged across the globe, but mostly to Australia and Southeast Asia, mostly on sailing ships or the lesser steamers, rarely having the opportunity to serve on the better classes of fast passenger ships. When he began to write and publish his own stories, they were set in the locales familiar to him, aboard ships at sea or in the ports and backwater towns and villages of the great Asian archipelago. He focused on sailors and on the various exiles, dreamers of wealth or those escaping the past, who found their way into the remote places where they encountered indigenous rulers and other adventurers in constant conflict, much of it driven by the outside forces of expanding trade and European imperialism. His one trip on the Congo provided the framework for his most famous and controversial work, The Heart of Darkness. There he saw firsthand how the unbridled force of European greed brought out the savage potential of nearly everyone who became involved in the enterprise.

 Conrad did not like to be thought of as a writer of sea stories, although he certainly wrote vivid and hair raising tales of the struggles of ships and crews, Typhoon being one of my personal favorites. He thought of himself as writing about the struggles of human beings, mostly, but not exclusively, men, caught up in the web of impersonal forces, both natural and societal that he saw driving the history of his times: oppression and the revolutionary impulse, personal ambition and political intrigue and the “material interests,” which he associated most powerfully with the United States.

 Jasanoff does an excellent job of drawing out the threads that connect Conrad to our own day, arguing that more than any other author of his time, he saw and made his readers see the historical forces at work that we would now call “globalization.” Much has changed, as she is careful to describe from personal experience, both in material circumstances and our perspectives, but the seeds were present and can be perceived clearly in Conrad’s work. She herself, to gain first hand experience, made a river journey down the Congo, following the route of Conrad and his fictional Captain Marlowe, but she saw none of the darkness that they did, only poor but very enterprising people, making their way in a complex world, where bushmeat sellers from villages of bamboo houses buy toothpaste and batteries and watch satellite television showing European football matches. Some things she says, do not change much: the camaraderie of a long sea voyage (for her, on a giant container ship, following the long established route from Hong Kong to England) and the ravishing beauty of the dawn over a smooth sea.

 Jasanoff sees Conrad as deeply pessimistic about human beings, carried along by winds and currents of history. Although we can master the literal forces of nature by our machines, we unleash consequences we cannot control, and the forces within ourselves are even less manageable. But, she says, Conrad does show us those times when however precariously, we can make choices that alter the course of ours and others’ lives. I find Conrad himself a clear case in point: in choosing to go to sea, the Polish boy, Konrad Korzeniowski became Joseph Conrad, master mariner and one of the greatest English novelists.

Looking for the Logos of Lucre I

Thomas Piketty. Capital in the Twenty-First Century. Translated by Arthur Goldhammer. Harvard University Press, 2014.

[Illustration: Victor Dubreuil, Barrels of Money, 1893]

I’ve been slow in posting these comments on a book I finished reading last spring, but recent developments in federal tax laws seem about to begin an experiment to test some of the author’s ideas. I’ll write more about that once the tax bill is done with, but meanwhile, here’s a summary of what I learned from Piketty. If you have time and inclination to read the whole 700 pages and take careful notes like I did, I say, do it. Otherwise, this somewhat lengthy post is my best effort to describe some very important work.

Piketty left his position at an American University because he felt American economists were too childlike in their fascination with mathematical models and too ignorant of the historical patterns of economies in the real world. He feels that economics in America was too divorced from the other social sciences to contribute usefully to understanding the changes in global society. While Piketty does rely heavily on economic data, and he uses a few very simple equations, for the most part, this is a book about history and what it suggests about the future. In some ways Thomas Piketty sounds like Alexander Herzen (whom I posted about last year). He admits that he cannot really predict what capital will do in the twenty-first century, because as he says, “history always invents its own pathways.”

In part one of the book he shows that growth rates for the two factors that control economic output, population and productivity per capita, have undergone a dramatic rise and fall since about 1700. This started in Britain, France and the US, and then spread to the rest of Europe and later to Asia. According to Piketty, the most likely scenario is that the rest of the world will catch up in the 21st century. Overall this leads to a rise and fall of economic growth, with a likely leveling off around 2100 at 0.2% population growth and 1.2% per capita output growth, for 1.4% growth in total economic output.

Piketty believes inequality rises because the rate of return on capital (r) is higher than the overall growth of output (g), or simply, r > g. The rich, who own capital, benefit from r, while the lower ranks, who depend on wages, can usually only gain as the economy grows (g). Economic inequality was very high throughout the nineteenth century and then declined in the early twentieth. The top ten percent’s share of income was about 45% from 1910 to 1940, fell to about 35% from 1940 to 1980 and has risen since to 47-50% [without any signs of slowing down, I think]. From this, there also follows a shift in the capital to income ratio, that is the value of accumulated goods compared to annual domestic production.

In part two, Piketty talks about how the character of capital has changed. The nineteenth century novels of Honore de Balzac and Jane Austen illustrate the way well to do people then lived off rents, mostly land or government bonds, although Balzac’s characters often owned factories or mercantile houses at some time in their lives.

Beginning about 1914 there was a huge drop in accumulated wealth across the developed world, but a much smaller reduction, or even growth, in economic output. What caused the big twentieth century dip in the ratio of capital to income? Physical destruction in war does not account for more than a third of the drop. He attributes the rest to the collapse of foreign assets, low savings rates and low valuation of assets in the politically unstable times. Wealthy people sold assets to maintain their level of consumption during the Great Depression, etc. Government bonds’ value was lost through inflation. “Ultimately the decline in the capital/income ratio…is the history of Europe’s suicide, and in particular the euthanasia of European capitalists.”

America never had the drastic swing that Europe did in the 20th century, so we may tend to regard capitalism with less suspicion, according to Piketty. Also today, because of Europe’s slower growth, economic and demographic, accumulated wealth is even more important there than here. Britain and France have capital/income ratios of five or six, compared to the US ratio of four. Germany is also at four, which he says is because German corporations are more controlled by stakeholders (unions, government, citizens) relative to stockholders, which keeps their stock prices down. The global ratio of capital to income stands at about 4.5:1 as of 2010. Piketty projects that it will rise to something like 7:1 by 2100.

The capitalist’s versus the laborer’s share of national income in Britain and France has gone from 35:65 in the eighteenth century, to as high as 45:65 between 1830 and 1870 (think of Ebenezer Scrooge) to as low as 15:85 between 1925 and 1980 and back up to 25:75 today. Picketty also tries to assess the rate of return on capital, which generally seems to be about 5% but got somewhat higher around 1920 and a lot higher (>10%) around 1950. He stresses that non-wage work, such as in small business owners and partnerships are hard to assign correctly to labor vs return on capital and that even pure return on capital like interest or dividends, requires quite a bit of work. Adjusting for this to get a “pure” return on capital lowers and flattens the temporal variation. He thinks larger individual or corporate fortunes earn higher rates of return. On really large fortunes and things like endowments, it may be well above 5%.

He expects that the rate of return on capital will not decline as the capital to income ratio increases in the future, which will lead to a higher share of national income for capital, possibly as much as 30 or 40% by the end of the century. This depends on whether capital is able to go on substituting for labor (by computers, robots, etc.) or whether the increasing demand for skilled operators will strengthen labor’s share in the long run, as some economists believe. It never crosses his mind that we might go with Ivan Illich and begin liberating ourselves from industrial goods and technology by political means.

He begins his third section, on inequality at the individual level, by returning to Balzac’s Pere Goriot, specifically Vautrin’s lesson to Rastignac about the futility of work and study as a route to wealth. Only an inheritance, direct or through marriage, could enable a man to become rich in Paris in the first half of the nineteenth century. Piketty points out that inherited wealth lost much of its importance in the twentieth century, so differences in income began to have more to do with talent and effort. You could go quite far by work and study after the great decline in capital to income ratio triggered by the world wars.

He observes that capital is always more unequally distributed than income from labor. This is true across all periods and all countries. The top ten percent of income earners get about 25-30% of wages, while the top ten percent of owners have 50-90% of wealth. The bottom 50% of workers get about 25-33% of wages, but the bottom 50% generally own only 5% of wealth. One problem in measuring these inequalities is lack of good data on lifetime earnings for labor, which would even out some of the fluctuations that individuals experience. If wealth were largely accumulated to protect against such fluctuations or provide for retirement, the wealth could be more equally distributed than current wages or as evenly distributed as lifetime wages, but this is never the case.

Inequality in wealth shows similar patterns across all age cohorts, so it’s not simply a matter of lifetime accumulation. The two keys are inherited wealth and different rates of return on capital, especially on large vs. small amounts.

He gives a detailed history of inequality, as far as the data permit, showing how the distribution of both income and wealth across percentiles has evolved since the eighteenth century. Inequality declined sharply during the 20th century, but after 1980 it began to shift back towards higher inequality. During the same period, the US went from one of the more egalitarian societies, particularly with respect to wealth, to the least egalitarian with respect to income distribution of any society for which he has data. These trends have continued apace since 2010, of course. The big change has been the rise of a professional elite that receive pay many times the national average. He wonders if this is in fact a supermeritocracy, as some have termed it, but he does not draw any conclusion in this part. He points out that the upper percentiles, above 90%, are quite diverse, including academics, doctors, lawyers, small business owners, upper managers and at the very top the small number who still earn huge amounts from dividends, interest, rents, etc.

The New York Times had an editorial, 21 February 2017 explaining that neither immigration nor automation causes the current discontent of the people at the bottom. It is due to the policies that have led to the top 10% getting 60% of all the gains in the economy since 1980, while everyone else stays the same or little better, with income growth of a half percent per year. Weakened collective bargaining, stagnant minimum wage, reduced support for education and changes in tax laws have all contributed to the ascendancy of the upper levels. Tax reform, curbs on financial practices that hurt workers and support for childcare, elder care and fairer scheduling (I would add healthcare and affordable housing) would do much to restore balance, according to the Times [dream on…the GOP has just done the exact opposite].

Piketty tries to show that the rapid growth of inequality cannot be the result of growing differences in individuals “marginal productivity,” that is, how much value a CEO or other manager adds compared to lower level employees. There are some increases in the difference between the unskilled, the older skilled and the younger, tech savvy workers (the race between technology and education), but this is not enough to account for the gap, which in the US is greater than it was in apartheid South Africa. It is also hard to see why the gap is less in Europe and Japan, if technological innovation were the only cause.

He points out that the notion of “marginal product” of a CEO is nearly impossible to define; instead it is determined largely by factors like ideology, hierarchical relations and bargaining power. Once the elites start to grab a bigger share, they can point to one another and say, “look how much other CEO’s make.” [This is certainly how it works for college administrators.] The ultimate problem becomes what sets limits. It must be social norms (there seem to be no legal norms) but why do Europe and Japan differ so much from America? One factor may be a greater degree of “extreme meritocracy,” the tendency to attribute success to individual ability and effort, as opposed to collective effort, good fortune, etc.

Changes in top marginal tax rates since 1980 have provided a much greater incentive to raise top pay. In a clear example of positive feedback, the resulting windfalls have gone, among other places, into donations to political parties, PACs and think tanks, whose platforms and policy recommendations include keeping those taxes as low as possible. [It seems to be working out for them].

At the beginning, the US started more equal, but it was catching up to Europe by 1910 (~80% wealth to top 10%) This caused concern in political circles that the US might lose its egalitarian ethos and this in turn led to establishment of progressive federal estate and income taxes, according to Piketty. He contrasts that with the talk among economists and politicians today that US inequality (which has surpassed Europe since the 1970s) is good because it drives entrepreneurship. Conservatives and libertarians think Europe is now too equal. [Congress is about to abolish the estate tax, which they cleverly call the “death tax,” so we will see plenty more inequality in the future.]

Piketty says that there is no reason to expect a stable distribution of wealth in the future. The real reasons inequality was lower from 1914-1970 were the series of multiplicative shocks to capital from wars and financial crises and the taxes governments imposed in the twentieth century. If, as seems to be happening, those taxes are abolished or greatly reduced, then inequality will rise.

In the nineteenth century inheritances and gifts accounted for about a quarter of national income. Between the world wars this went down to only about ten percent, but now it is increasing again, because the capital to income ratio has gone back up from around two to about five or six. The golden age of self-made fortunes is past. Of total wealth, well over half is inherited, more so, if you count gifts and income earned from capital. Underlying all this is the r>g phenomenon, which means those who inherit can accumulate faster than those who labor. The big change from the nineteenth to early twentieth century was that more middle class people accumulated some wealth that they could pass along. Today, most people, however, still inherit nothing. Accumulated wealth does not go mainly to support us in old age; it goes to the heirs of the very wealthy.

Piketty describes the inherited wealth of the nineteenth century as seen in Austen and Balzac, where only a tiny elite could live much above subsistence. Equalizing everyone’s wealth and income at that point would have perhaps severely diminished “civilization.” William Hinton makes a similar point in Fanshen: when the peasants overthrew the landlords in China in 1948, there just wasn’t much wealth to go around. None of the nineteenth century novelists, Piketty says, were under the illusion that these differences in wealth were merited. Today, with the rise of the meritocracy, we tend to assume otherwise, but the evidence is mixed, at best. [Take a look at Trump and his offspring.]

There seems to be a global trend for the share of wealth held by the richest, the multi-billionaires (he’s speaking of fewer than 300 individuals in this class, who together account for about 0.9% of the world’s wealth) to be increasing at about twice or three times the rate of the average per capital wealth globally. Probably 60-70% of this wealth comes from inheritance, the rest from entrepreneurship, but it all increases at 6-7% a year, more for the very richest, like Bill Gates. The differential rate of increase, if it extends down into the top 1/1000 of the population (the 10 million dollar fortunes) could increase that group’s share of global wealth from the current 20% to 60% by 2050. This would have profound consequences. Only progressive taxation can control them, he says.

The question is how to constrain what Piketty calls the “inegalitarian spiral,” so as to protect the public interest and democratic values from “patrimonial capitalism.” The principal alternatives are a global tax on capital, which would have the added advantage of opening wealth up to public scrutiny, in turn making regulation of the financial system possible, or a retreat into nationalism, which sacrifices the advantages of openness and global competition.

Between the 1930s Great Depression and the 2000s Great Recession, the role of government in society changed tremendously. Financial regulation and confiscatory taxes on high incomes have been evolving in the industrialized democracies since the 1930s, and they have been under constant attack since the 1970s. Piketty says these arguments are natural and proper, especially since both financial capitalism and government controls have become more complex and opaque to most people. How can the issues and responses be made clear? The starting point is to look at the growth of the “social state” since the nineteenth century.

At the beginning of the twentieth century, taxes in what were in many ways still “regal” states consumed less than ten percent of income in the industrialized countries, covering basically police, courts, the military, foreign affairs and administration. Education and health consumed only 1-2% of national income. From World War I to the 1980s, the share of income devoted to education and social welfare increased, leading to levels of taxes (including all compulsory payments to government at all levels) that range from 30% in the US to 50 or 55% in France and the Nordic countries. These rates have been almost constant since then. Piketty notes that the amount dedicated to the functions that dominated in the nineteenth century (defense, etc.) still consume around 10% of income, so the increase has been almost entirely devoted to building the “social state,” namely education and health (10% to 20% of income) and income transfer payments (welfare, unemployment and social security, also 10% to 20% of income). He notes that the US spends more (20%) than European countries (10-12%) on health, if private insurance is included. He thinks the lower levels and slower growth of social state spending in the US is attributable in part to racism. The US is the only democratic country that essentially uses prisons as an alternative to welfare, especially for young black men. We have the highest incarceration rate in the world. We are also unique in using food stamps, because we fear that otherwise welfare money will be spent on drink or vice, possibly another legacy of racist attitudes. This may also account for our fondness for other voucher programs. Hating and mistrusting the poor is a decidedly American trait (now being seen in Europe as refugees and immigrants become more difficult to deal with). Perhaps this is because of the successive waves of immigrants, including freed slaves, that have characterized US social history.

He links the growth of the social state to the notion of rights as expressed in the Declaration of Independence and the Declaration of the Rights of Man, especially the latter’s claim that inequality can only be justified by social utility. Piketty argues for a Rawlsian definition of utility, relating it to benefits to the least advantaged, as opposed to a utilitarian preference for a mathematical sum of benefits across the social spectrum.

What is the future of the social state? Piketty thinks that is will continue but is unlikely to grow much, at least in Western Europe. Slower growth of income and productivity will mean that raising taxes would slow or reverse income growth and constrain private consumption. Also, the social state becomes hard to manage if it grows too large. Of course, he says, a lot of the infrastructure of education and healthcare, which make up 20% (or more) of the overall economy, is privately owned and managed (hospitals, colleges, etc.) The pattern differs from country to country and is changing as new modes of organization develop.

An important point he raises is that the absolute level of taxation is less important than whether taxes are collected fairly and transparently. I assume that also goes for how they are spent, so whatever the organization of the social state, it needs to be open to scrutiny by all citizens. This is where so many organizations break down (for example, the Port Authority of New York and New Jersey) and why people are suspicious of public/private partnerships. If they function to shut out scrutiny and debate about how taxes are spent, they are anti-democratic.

He thinks that in Western Europe the debate about the social state will be mainly about reforming and modernizing the existing structures. One major issue is access to education. He asks whether education has fostered social mobility, rather than just upping qualification requirements across the board. Generally the answer is no. Sweden shows the most upward mobility, while the US shows 30% less, with the other Western European countries in between. Mobility is hard to measure across generations, so these comparisons are imprecise. Still, this may fairly accurately reflect the much more unequal access to the best education in the US vs Europe. Parental income is an accurate predictor of university access in America. The average income of parents of Harvard students is in the top 2%, despite the claim that admission is based only on merit. This is a case where the actual process is a closely guarded secret.

Even in Europe, where tuition is free or low, there are other factors at work in universities that insure that the public spending on them goes to reinforce or exacerbate existing social hierarchies. In the one French grande ecole that he could get data for, the students came disproportionately from the upper 10% of the income hierarchy (he quotes the school’s founder from 1872, saying essentially that the upper class had to stop being idle and “invent meritocracy” in order to save itself from the rising democratic tide). Piketty notes that the US has a large share of the world’s top universities in part because they can charge high tuition [the Republican tax plan, which will make graduate assistants pay taxes on waived tuition, may change this]. He thinks that it would be possible to have greater access to elite universities if the government provided a lot of funding to independent schools [As scholarships? Is that really consistent with independence? It could be, if students could use them anywhere they chose, like National Merit Scholarships].

He also talks about pay as you go pension systems like Social Security, which work well with high economic and demographic growth, as prevailed from the 1930s to the 1980s. A capitalized system would avoid the problem of slower growth and take advantage of rates of return likely to be at least 4%, but there is no simple way to make the transition. The US probably has more flexibility than Europe, because FICA taxes are lower than the 25% the French pay (so he says) and we don’t tax all wages and salaries. He believes that there’s no way to eliminate Social Security in the immediate future. I personally am very happy with my capitalized TIAA-CREF retirement plan, but not everyone can save 10% of pay, even with an employer match.

He briefly surveys the developing and emerging countries and finds that they have low rates of taxation, basically in proportion to their level of economic development, not enough to adequately support a social state. Some have even seen levels decline, as neoliberal or ultra liberal policies are forced on them by international organizations. Loss of tariffs revenue is a key factor. He says the rich countries are using the less developed (and the old communist countries) as guinea pigs for economic theory testing and not giving them a chance to follow the historical course that the west did itself. If they try to build a social state on a regal state level of taxation by underfunding police, military, etc. they risk cops on the take, anarchy or a military coup. China seems on the right path as far as taxes and social services, with great uncertainty, political and demographic, while India seems stuck in a regal rut.

Piketty defines proportional, progressive and regressive taxation, and then shows that at present, overall taxation is generally regressive at the highest levels of wealth and income. Because of the importance of mandatory contributions like Social Security and because income taxes have become less progressive, especially since 1980, the rich pay a lower percentage than the poor of their income. Add to that that corporate income and income from capital are taxed at lower rates than wages and that the rich have greater access to tax havens, and you get even more regressive overall taxes. Piketty worries that this will begin to undermine the consensus supporting the social state’s financing, especially among the middle class, which bears the heaviest burden of progressive taxation. It also takes away the consolation to those in the lower ranks, who have already been hurt most by globalization. These trends were painfully clear in the US 2016 political campaign. The Republican response has been to advocate for dismantling the social state and replacing it with either the system that existed in the 1920s under Coolidge and Hoover, or some kind of free-market fantasyland, possibly with some Christian charity thrown in. Bernie Sanders tried to get people to see what the real problems were, but Hillary Clinton and the business as usual neoliberals pushed him aside. Both candidates tried to sell feel good nonsense to their base constituencies, but neither had any real plan. [Trump actually did: it turns out to be the congressional Republican plan.]

He looks at the history of attitudes towards returns on capital, noting that the Greeks and Christian Europe distrusted or banned interest on lending, but not rent on land. This facilitated social control, but it stymied economic growth. Communism banned all returns on private capital by abolishing it. The problems then were not related to increasing inequality, since r=0, but to the difficulty of having g not go to 0, without the incentives of free markets. Efforts to control the economy ended up in tyranny. In the course of the democratic revolutions in America and Europe, taxes on property were set to insure the proper registration of titles more than for revenue. I think customs and excises provided most revenue until the twentieth century. Then the long discussed progressive taxes began to be implemented in the chaos of war and depression, etc. In the twentieth century, taxes on capital, including real estate, that did exist were low and often inefficient because they were not based on current market values. Furthermore, the real property tax was regressive, in that the lower your wealth, the more of it tends to be in real estate.

Progressive taxation is an almost entirely twentieth century phenomenon, according to Piketty, arising out of the changes caused by World War I. The need for revenue to pay for wars and the rise of the social state led to rapid increases in top tax rates on income and estates. He says the very highest rates, above seventy percent, which were first enacted in the US, were intended to make it difficult, if not impossible, to achieve very high levels of wealth. The intent was economic leveling. Piketty feels this is the best way to balance equality and freedom. As Kenneth Boulding said about the estate tax, it makes it harder to accumulate huge fortunes, and so promotes equality, without necessarily discouraging productivity or penalizing those who promote it. The estate tax, in particular, does not fall on those who actually earned the money. Piketty refers to Irving Fisher’s 1919 presidential address to the American Economic Association as one example of the degree that people worried then about inequality. Like Boulding and Josiah Wedgewood, Lewis favored estate taxes as opposed to taxes on profits and other returns on capital. The Great Depression started right when inequality was at an all time high in the US, driven by huge capital gains on stocks. One of Roosevelt’s first actions in 1933 was to increase the top income tax rate from 25 to 63 percent, and then to 94 percent by 1944. It stayed around 90 percent until the mid-60s and was still 70 percent in 1980. These high rates in the US and Britain applied to unearned income (rents, interest, dividends, etc.) and earned income rates were often lower. Furthermore, these top rates never applied to more than 1% of taxpayers, usually more like 0.1-0.5%.

This passion for leveling lasted from the 1920s to the 1970s in the US and Britain and then did a 180, leading to top tax rates much lower than in France and Germany, which had not gone in for so much leveling. This has caused proportional increases in the share of income going to the upper percentiles in both countries. Piketty thinks that part of the driving force behind Thatcher and Reagan was anxiety about the way France, Germany and Japan were catching up to the US and Britain by the 70s, even though this was just the inevitable consequence of their having fallen so far behind because of the wars. Piketty doesn’t find any relation between the decline of these tax rates and productivity increases. He thinks that the cuts just made it more worthwhile for top executives to angle for huge raises, of which they got to keep a much bigger share. His solution is to reinstate top rates of about 80% on incomes over $500,000 and 60% on those above $200,000. This would rein in top salaries, without, he says, reducing productivity. The government would then have revenue to begin to strengthen the weak social state, especially in health and education.

Piketty’s long-term solution to the problem of capital is a global tax on all wealth. The rate would amount to about 0.5% of global income. It would be progressive, designed to slow or halt the growth of really large fortunes. It would require complete transparency of who owns what globally.

Today, he says, it is hard to even discuss the problem of capital, because we don’t know where most of it is. Private wealth is hidden in tax havens, foreign investments, etc. Ownership of huge assets is often concealed by layers of dummy corporations. That’s why you cannot get the world’s debts and credits to balance. As Piketty says, it looks like Earth must owe money to Mars, a scenario rendered plausible only by the TV series, The Expanse. Lack of transparency also makes it difficult and dangerous to try to deal with global financial crises. He has a lot to say about transparency and its relation to free markets and trade, including that it is criminal for some countries to siphon off the assets of others (e.g. Cayman Islands from the US), although one could see that as payback for colonialism, if the locals were benefiting.

He argues for automatic sharing of banking data globally. We have this in the US now, and are supposed to have it for foreign assets (excluding some important classes, like some trust funds and foundations) under the 2010 Foreign Account Tax Compliance Act. We don’t think that the domestic rules are so onerous; they insure fairness better than self-reporting would. A lot of places apparently have automatic adjustment of real estate values, too.

A tax on capital, once we knew how much there was and where, would first insure that the super rich, like Bill Gates, contribute their fair share of taxes. Income taxes, even when rates are 50-60% or more, rarely capture the gain in wealth of these individuals (6-7% annually, in some cases, while reported income amounts to 0.01% of that same fortune). The observed positive correlation between rate of return and size of fortune, shows that a progressive tax on capital would amount to a progressive tax on income as well.

He notes that such a tax would also act as a strong incentive to seek highest returns on capital, instead of leaving assets in low earning investments. This may be somewhat beneficial, or not. For instance, relying only on taxes on capital and not on income, would hurt companies when they get into difficulty.

What would an international tax on capital be like? It would have to be fairly small, like real estate tax, if it were collected annually. In Europe a zero, one, two percent progressive tax, with breaks at one million and five million euros, would bring in revenue of 2% of Europe’s GDP a year. With complete transparency, you could replace the property tax with 0.1% tax on wealth under 200,000€ and 0.5% on 200,000 to 1,000,000€. This could be done by individual countries on their own, making the property tax structure much more progressive, especially if debts were deducted from assets. Right now, I pay taxes on the market value of my house, even though I owe a lot of that to the bank, which doesn’t pay any tax on its share. Piketty thinks the fairest system for large fortunes, above 5,000,000€ would be to set rates based on a rolling average of rates of financial return. Such rates, when returns are running above 6% say, should be adjusted up above 2%. By setting this rate to effectively reduce the gap between r and g, you can constrain the increase of economic inequality in whatever way you decide is fair and socially desirable. You can even engage in leveling, while still keeping free markets.

The alternatives to a carefully designed, progressive tax on wealth to regulate patrimonial capitalism are protectionism and controls on capital. Protectionism can protect undeveloped economic sectors and punish transgressions of international order, but doesn’t in itself generate growth. Capital controls are being considered in many countries to counter the instability created by free flow of capital. Free flow was advocated in the 1980s to 2008 by IMF, the World Bank, etc. Since then, faith in self-regulating financial markets has declined, and countries are looking to protect themselves by holding on to lots of reserves of foreign exchange. China has never allowed free flow of capital, having a currency that can’t be freely exchanged. They also restrict capital investment from outside and outflows of capital assets. Unlike Russian oligarchs, Chinese capitalists can’t move to Switzerland with their assets, or continue to collect their dividends from Chinese companies. China has a progressive income tax and invests a lot in health and education, unlike the former Soviet bloc countries on the one hand and India on the other.

Another question is how to deal with the unequal distribution of natural resources. Oil is the big one, of course. The unequal distribution of these assets is a nasty issue, caused in part by postcolonial boundary drawing. We see the huge costs it imposes in the form of perpetual was and strife in the Middle East. Some countries, like Qatar, have hundreds of billions in annual revenue, while Egypt can invest only five billion to educate thirty-five million people. Piketty thinks a global wealth tax should be designed in part to remedy situations like this.

Immigration is another way the world has adjusted the distribution of resources, most obviously the US. Immigration has long served as a counterweight to accumulation of patrimonial fortunes here, and it continues to keep us from returning to the social conditions of Old Europe. Immigration supports g, in the face of r. Still, it is immigrants (and of course, blacks and women) who absorb most of the growing inequality of labor income here, too. Such redistribution via immigration works in Europe and the oil countries to some extent as well. Trouble is, this kind of redistribution only delays the growth of inequality to when g levels off around the world. Also, with immigration, you need to maintain that strong social state and progressive taxation, or you will get a backlash from those who lose out to globalization. We can see the truth of that warning in the election of Trump, who along with the GOP, seems bent on continuing the policies that got him elected by the discontented (see Chris Ladd on the White Socialism that used to provide America’s social state and why its beneficiaries voted for Trump).

Another alternative to taxes is public debt. The US and even more so Europe, have lots of private wealth but heavily indebted governments. Piketty says that, given a choice, it is better to tax the rich than to pay them for the use of their money (through borrowing). Tax cuts for the rich have been followed by accumulation of high levels of public debt in the rich countries (close to 100% of annual national income vs. 30% in the developing world). [In New Jersey and other states, tax cuts for the rich have been made up for by stiffing low paid public employees, via benefit cuts and unfunded pension obligations, a common form of economic austerity].

Reducing unsustainable debt can be done by taxing capital, allowing inflation (the historical solution) or austerity (the current solution). Privatizing all public assets in Europe would also just about wipe out public debt (the totals being about equal). This would replace interest on public debt with rent on previously public assets. Something similar is going on as funding for public higher education dwindles. This, he suggests, is simply shifting the form of the problem. Default, total or partial, has unpredictable consequences, which may hit small savers and the banks they rely on much more than the richest 10% who have more options for escaping the crisis default would trigger.

He thinks a one time progressive levy on all financial assets, amounting to about 15% of total financial wealth would be the best way to reduce excess public debt. This, of course, requires complete financial transparency. If the target were only a fraction of public debt, rates could be lower. After WWII, France imposed a one-time tax of from 0-25% to reduce its massive debt.

Letting inflation rise is a solution that has also worked before. Going from 2% to 5% inflation reduces the value of public debt by about 15% he says. France and Germany got rid of a lot of debt in the 20th century by inflation of 10% and sometimes a lot higher. The US and Japan are doing some of that now, much more subtly. Europe, which has rules against letting inflation rise, is faced with ten or twenty years, possibly more, of austerity policies to reduce its debt. Britain applied austerity throughout much of the 19th century to eliminate its debt from the Napoleonic wars. They spent twice as much on debt service as on public education, with likely consequences for their competitive position in the 20th century. This is what Europe is currently doing.

Inflation is hard to control. France had four consecutive years of 50% inflation, Germany a year of inflation that multiplied prices by one hundred million. I know this from stamp collecting: the inflationary issues of Germany and France are very familiar: hundred franc and billion mark values from those periods are found in any mixture of cheap stamps. Inflation also wipes out small savings and retirement funds, adding to poverty. In Germany, nearly everyone was ruined by the 1922 hyperinflation. This is partly why these countries and their bankers are so inflation averse today. The hard hit on savings, especially smaller accumulations, is somewhat offset by the reduction in indebtedness for other poorer people, but not enough to justify inflation as a solution, he thinks. The only good thing it does is punish the rich who have unproductive capital.

These issues lead Piketty to consider the role of central banks. When gold was the standard, inflation and deflation were tied to discoveries of gold and silver, but once the standard was abandoned in the early 20th century, central banks had to be responsible for regulating money. They failed in the run up to the Great Depression, being too tight fisted to allow the borrowing that could have saved many banks and other investors. Milton Friedman and others then took the view that all that was needed to keep the economy and society on an even keel was careful growth of the money supply. Social state programs were irrelevant. Piketty thinks that in the 1970s the disparity between Europe’s postwar growth and the slowdown in the US helped fuel the claim that growth of government was causing American decline. This opened the path for the conservative backlash under Reagan. The social state was stopped from completing its growth, and progressive taxation was abandoned, leading to our current dilemma. Piketty concludes that central banks have an important but not exclusive role as lenders with limited portfolios, alongside taxation and the social state.

Piketty discusses the future of capital and public debt and concludes that there is no magic formula involving the quantities discussed earlier that will decide what level of capital accumulation is desirable. This is a problem for democratic debate. The focus on common currency, the euro, was not enough without looking at taxes and debt for Europe.

The big issue for the future, thinks Piketty, is climate change. From an economic perspective, the problem is not figuring out the future cost, which we know within the limits of uncertainty, but deciding how much to discount that to determine how much current investment is needed to offset it. If you chose the current growth rate of 1-1.5% you get a different outcome than if you chose the current return on capital of 4.5-5%. He thinks the higher rate is way too optimistic. It suits the US do little attitude, but it is not in line with what is likely to happen. The opportunity is there, he says, to invest heavily at low rates of interest, if governments would decide to push for solving the problem. Green public investment, in other words, is a good idea.

The other thing he recommends is to develop new ideas about property and new approaches to democratic control of capital. He seems to be saying that mixed forms of public and private ownership in areas like education and health are good. What is essential is transparency on both sides, with the public fully informed. How much is that true in New Jersey? I suspect not to any great extent. He thinks that full public disclosure of corporate balance sheets is crucial, as well as seats for workers on the boards of directors.

In the conclusion, Piketty restates that r > g means past wealth grows faster than output and wages, or as he says, “the past devours the future.” This is a huge problem, without an obvious solution. Investing in education and research and development can’t raise g to 4.5-5% any more than cutting taxes has. Currently, even the Trump administration figure of 3% long term growth is deemed unrealistic. Free markets can’t correct the inequality. Wealth accumulation to such an unequal degree likely stifles innovation and opportunity, further reducing g. His progressive tax on capital seems to be the best solution, but it needs a lot of international cooperation to make it work. The US and China are big enough to achieve some things on their own, but Europe would need more complete democratic integration to make any progress.

I have noticed that economists here have very little useful to say about Trump and Republican policies generally. Most discourse is limited to the grossest kinds of generalities about markets, jobs, wages, growth, etc. based almost entirely on competing theories, with no real data to support them. It’s like talking about what to do about climate change, when your interlocutor has no clue what the data show and denies that they are relevant. You can’t make policy on abstract theories and catch phrases.

I have read a number of articles critical of Picketty, and I find that many of the authors seem to have overlooked things that I felt he dealt with. Studying economics solely through models is like studying evolution only through theoretical population genetics and ignoring systematics, biogeography and paleontology. The history of what actually has happened matters a lot. That’s Piketty’s major point: we can’t predict the future of capital, but we can look at its history, apply a few basic models that seem to account for what happened and try to see whether these models yield plausible ideas about the future. I see him doing that very consistently, all the while applying what we know from other social sciences to help understand what shapes the different histories of different countries and regions so that the simple economic factors produce diverse results. This is how evolutionary biology uses ecology, earth sciences and other disciplines to make the simple population genetics models produce the diverse results we see around the world.

One interesting parallel strikes me, since Piketty talks so much about inequality: increasing inequality may be a rule in evolution as well as economics. We know from studies of the Amazon rainforest that despite its enormous species diversity, a few species of trees make up a very high proportion of the biomass. Thus the abundance of species is very unequal. Perhaps this is a trend throughout evolutionary history as the somewhat better adapted species grow at higher exponential rates than the rest. This is very similar to Piketty’s r > g, since those are also exponential growth rates. In European economies, increasing inequality was the trend throughout the nineteenth century, until what Piketty calls the “shocks” of the World War era set back the wealthy and led to greater equality among the classes. Perhaps the shocks of abrupt shifts in climate, massive volcanism or meteor strikes are doing the same thing to the dominant (as ecologists call them) groups of organisms throughout the history of life. That is certainly the story we hear about the dinosaurs and other once abundant groups, now vanished or greatly reduced in abundance.

The one difference is, as Darwin long ago pointed out and others have maintained, since maybe 200 million of so years ago, g for overall life has been close to zero, that is, the biosphere is not getting bigger, leaving all life forms to fight for a share of an constant sized pool of living matter. Also, there is no distinction between income from capital and income from labor in the biosphere. There are no rentiers in a Darwinian struggle for existence, so it is just a matter of some species’ r values (here meaning the exponential rate of population growth) being higher than others’. In economics there are only two species, capitalists (rentiers) and workers, but they grade into one another in the middle. In ecology, there are literally millions of species, but intergradation is highly variable. Just as in economics, we can measure all wealth and income in terms of monetary value, in the biosphere all success must be measured in energy, of which biomass is an equivalent. There are complexities: how to account for the very high respiratory rates of some organisms, like wolves, or better, shrews, versus others with much greater biomass but less respiration, like trees. So total income for each species may be better than how much they accumulate, but you would not say that of humans when comparing a thrifty saver to a wastrel. So both accumulated biomass and total energy flow (= income) are legitimate ate measures of dominance or success in the biosphere, just like income and wealth need to both be included in economic analysis.