Neil Macdonald: What to do about America's oligarchs?

The easiest explanation for the inexplicable popularity of Thomas Piketty's book Capital in the Twenty-First Century is the snark: people aren't reading it, they're letting it sit conspicuously on their desks and coffee tables.

That has to be at least partly true. If the book is a masterpiece, as eminent reviewers like the Nobel laureate and New York Times columnist Paul Krugman have declared, it's a turgid one.

I pretty quickly started finding chunks of it incomprehensible, and resorted to flashing from the index to sections with promising titles, looking for fresh, crystalline insights. (I've found none yet; that the rich get richer in a capitalist system hardly seems a radical thesis.)

Still, hundreds of thousands of people have paid $45 or so for a copy. The book topped the New York Times bestseller list this week, and briefly conquered the much more populist Amazon ranking.

Piketty, a 43-year-old French economics professor, originally wrote the book for the denser-is-better tastes of his own country's intellectual elite. But he found a furnace of demand in America.

Economic inequality is now the most compelling political issue in the U.S. It's a powerful topic anywhere, but here, it's causing people to question founding myths.

Americans seem to be realizing that what they had so briefly, the contented middle class life idealized by Norman Rockwell in the Saturday Evening Post, is gone, and won't be seen again in their lifetimes.

The promise of upward mobility and everybody getting a fair shake has turned out to be a fog of anaesthetizing gas administered by the ruling elites of this supposedly classless society.

Unfunded retirements

All that's left is illusory fiction, like the television series Mad Men, with its prosperous, one-income families and comforting storylines about succeeding through hard work and inspired talent.

An unlikely sensation, Thomas Piketty, the French economist behind Socialist President Francois Hollande's plan to tax all income over one million euros ($1.3 million) per year at 75 per cent, now has a mammoth bestseller out, Capital in the 21st Century, that makes the historic case for taxing the super-rich. (Charles Platiau / Reuters)

The program has provoked such powerful nostalgia that some of the best-read websites in America recap it weekly.

Shows celebrating the ridiculous excesses of super-rich entertainers or entrepreneurs, meanwhile, are no longer as amusing as they once were.

Instead of imagining getting rich themselves, as Americans did during the Reagan and even the Clinton eras, people more often now imagine their unfunded retirements, or the prospect of never retiring at all.

This unease and waning hope has even washed over the high, thick wall between left and right, rural and urban, red and blue America.

It has infected the older workers who've seen their unions dismantled and their gains reversed, as well as the millions of tired competitors in the hunger-games job market, the people who briefly frightened the establishment with their Occupy movement before choking on their own inchoate demands and dispersing to look for work.

Radical redistribution

Working-class Republicans, whose belief in free-market capitalism has for decades burned nearly as hot as their love of God and country and guns, are beginning to realize they've been duped for generations into voting against their own economic self-interest.

That became most obvious when George W. Bush, one of their own, decided at the end of his presidency in 2008 to rescue Wall Street's investment banks with the money of taxpayers whose wealth these banks had destroyed.

It was traumatic, like someone exposing your religion as a cruel scam. The betrayal quickly led to the creation of the Tea Party, which was really just another version of the angry Occupy movement, even if its members could never see that.

The Tea Partiers simply chose to direct their rage at government — all government, everywhere — rather than the actual villains.

Still, all that said, America's founding myths are among the most potent and binding anywhere, and one suspects that as anxious and bewildered as Americans may be, they are still not likely to fully embrace the French professor's diagnosis or his prescription.

Like Marx, whom he cites early and often, Piketty teaches that capitalism, the very foundation of America, is genetically corrupt; and that lacking any natural mechanism for self-correction, it relentlessly concentrates wealth in the hands of the few.

Citing centuries of economic data, he argues that the return on capital — stock market rises, dividends, real estate values — consistently outpaces economic growth and incomes, permanently marooning those who depend solely on their own labour to get ahead.

This only ever changes, writes Piketty, when wars or radical redistributions of wealth by governments intervene (a perfect example being that Norman Rockwell period that bloomed for a time after the Second World War).

So, his prescription: radical redistribution. A wealth tax of up to 80 per cent on high-income earners.

To get around the fact that capital is mobile and tends to flee such measures, he further proposes making the tax global.

That's not just unrealistic, it is un-American by almost any definition here.

U.S. oil magnate and philanthropist John D. Rockefeller gives a dime to a child in this undated picture. He set up the Rockefeller Foundation charitable organization just over 100 years ago, in 1913. (Associated Press)

Still, something has to be done, some gesture made, and politicians in both parties seem to realize that.

Suddenly, the idea of raising the federal minimum wage (now at $7.25 an hour) is coming not just from Democrats, but Republicans.

Mitt Romney, who actually may run for president again, endorses it. So does, of all people, the hard-core religious conservative Rick Santorum, another Republican who does intend to run for president again.

Clearly, they can read polls. A recent Bloomberg survey put voter support for a minimum wage hike at 69 per cent.

More importantly, though, they seem to understand the danger of hopelessness. Santorum, for example, concedes upward mobility is a failing dream.

Americans still appear to believe that capitalism makes America exceptional.

But unchecked capitalism does produce dynasties of oligarchs — aristocrats, really — and that's more obvious with every passing decade.

My father, a pretty conservative fellow from the Norman Rockwell era, couldn't understand why taxes on inheritances weren't more severe. Why, he would ask, should someone achieve fantastic wealth and power over others simply because of birth?

Warren Buffett, the iconic American billionaire, took more or less the same view when he cut his own children out of most of his fortune, donating it instead to charity.

And now, Americans are not just seeking the views of a French Marxist academic, but paying money for them.

Something's happening here, to quote the old Buffalo Springfield song.

The free-market conservatives denouncing Piketty's book have good reason to worry.

The question is whether the forces of public discontent are more powerful than the forces determined to keep things unchanged.