Thomas Frank Locates Thomas Piketty’s Blind Spot

Celebrity economist Thomas Piketty’s proposal of an “international IRS” as a means to end rampant wealth inequality falls far short of methods that exist in the American tradition, Salon columnist Thomas Frank writes in a critique of the best-selling “Capital in the Twenty-First Century.”

“Bringing the aristocracy to heel is entirely within our power and our tradition, and American statesmen from Jefferson to FDR (the man on the nickel, the man on the dime) have taken enthusiastic part in the business of leveling,” Frank wrote May 11. “There is nothing utopian about it at all. It is not an opium dream to imagine that Grover Norquist and company might one day be defeated or that the estate tax might be brought back in full Rooseveltian force; both are eminently possible, if only the Democrats would pull their heads out of their butts.”

The solution, of course, is in the idea of extending the American promise of democracy to the workplace. “Allow workers to organize,” Frank writes. “Let people have a say on the basic issues affecting their lives.” Piketty’s biggest blind spot, Frank contends, is that he has “virtually nothing to say about labor unions.” Except for an anecdote offered at the start and end of the book, “Capital in the Twenty-First Century” is devoid of references to labor unions. “Like other economists who have made inequality their subject, [Piketty] prefers solutions that are handed down from the lofty heights of expertise,” he points out.

But Frank isn’t really out to demolish Piketty. He admires what Piketty seems to have done, namely “demolish the great economic shibboleths of our time.” Frank is, however, keen to endorse solutions that invite the participation of all of society’s classes. He writes: “Economists may not think very highly of those hardened people in SEIU t-shirts — some of them smoke too much, some are suspicious of ‘free trade,’ some of them (gasp!) didn’t go to college — but the fact remains that in nearly every particular they represent the obvious and just about the only social force on the ground in America that might bend the inequality curve the other way.”

It is not happenstance that labor’s rise in the 1930s coincided with the fall from grace of that era’s 1 Percent; nor is it coincidence that the rise of the 1 Percent since the 1980s has mirrored labor’s long decline. “These things happened the way they did because labor’s most basic function is to turn the bright light of democratic scrutiny on economic power. When labor is strong, our composers write things like ‘Fanfare for the Common Man,’ ” Frank notes beautifully, “and blue-collar workers buy cars and boats and snowmobiles. When labor is weak, we bow down before ‘job creators’ and McMansions sprout like mushrooms after a rainstorm.”

Having strong unions in place to negotiate worker conditions and compensation would remedy the current capital-labor split almost by definition, Frank writes. For “out of control executive compensation,” “the disappearing middle class,” “the minimum wage,” “stratospheric college tuition and student debt,” and “social security and the rest of the welfare state? There is no more dedicated supporter than organized labor.” Were it robust instead of weak, many of the hardships working people face today, individually and collectively, would probably never even come up.

And a labor comeback is not utopian, Frank argues. “It would probably happen overnight if the workplace rights we are told we enjoy actually had force behind them. A large percentage of American workers consistently tell pollsters they’d like to have some kind of collective bargaining organization at work, and yet only a tiny sliver of them actually have such organizations — 6.7% in the private sector, according to the latest data. The reason for the difference, to put it bluntly, is that management doesn’t want their workers to have such organizations, and bosses routinely threaten and fire workers who try to bring such organizations together, law or no law.”

Frank recognizes that a powerful labor movement is not the full answer to plutocracy, but there is no question about whether it would improve the health of the country. “What we need is not some all-powerful UN tax collector to descend on the United States, but our own elected officials to protect the rights we already have on paper. Organized labor has suggested one possible remedy: the Employee Free Choice Act, which Obama supported but which got nowhere in Congress. Others have proposed protecting union membership with Civil Rights laws, thereby allowing workers who are fired for joining a union to sue their bosses directly rather than going through a labyrinthine Federal bureaucracy. Other change — helping new bargaining units to negotiate their first contract with management, or enhancing the penalties incurred by bosses for misbehaving — would be so technical they would go unnoticed by everyone except the Chamber of Commerce itself, and yet their impact on inequality would probably be significant.”

— Posted by Alexander Reed Kelly.