May 20, 2014
Thomas Piketty's Capital in the Twenty-First Century has highlighted capitalism’s drift toward inequality. He documents in detail how social inequality of both wealth and income has evolved over the last two centuries, with particular emphasis on the role of wealth.
In doing so he demolishes the widely-held neo-liberal view that free market capitalism spreads the wealth around and that it is the great bulwark for the defense of individual liberties and freedoms. What Piketty does show statistically is that free-market capitalism, in the absence of any major redistributive interventions on the part of the state, has tended throughout its history to produce ever-greater levels of inequality. It also has oligarchic tendencies.
What the Abbott Government is addressing is what capital sees the excessive power of labor. It is continuing the class politics of ensuring steady decline in labor’s share of national income since the 1970s by delivering for the donors of the Liberal Party. The strategy is to ensure the decline of political and economic power of labor and to increase the power of capital by mobilizing technologies, unemployment, off-shoring and anti-labor politics to crush the opposition and increase the profit rate.
Capital works by looking for new fields in which to play--hence the use of privatisation to privatize and commodify—housing, education, health care and public utilities--in order to increase profits and productivity. Labor, in contrast, seeks to increase its standard of living, as capital heaps more burdens—in the form of class inequality, degradation of the environment, and curtailing of human freedom— on the people and institutions of liberal democracy.