The best explanation of the current Piketty-Financial Times brouhaha was written by Mike Konczal a few weeks before it actually happened.
As Foucault argued, the ability of social science to know something is the ability to anthropologize it, a power to define it. As such, it becomes a problem to be solved, a question needing an answer, something to be put on a grid of intelligibility, and a domain of expertise that exerts power over what it studies. With Piketty’s Capital, this process is now being extended to the rich and the elite. Understanding how the elite become what they are, and how their wealth perpetuates itself, is now a hot topic of scientific inquiry.
Many have tried to figure out why the rich are freaking out these days. Their wealth was saved from the financial panic, they are having a very excellent recovery, and they are poised to reap even greater gains going forward. Perhaps they are noticing that the dominant narratives about their role in society—avatars of success, job creators for the common good, innovators for social betterment, problem-solving philanthropists—are being replaced with a social science narrative in which they are a problem to be studied. They are still in control, but they are right to be worried.
Political economy is political – a fact which many of its most prominent practitioners have ignored, or actively sought to bury. Although it appears technical, it starts from a set of political premisses. It radically emphasizes questions of (purported) economic efficiency, and discounts or actively deprecates questions of who-gets-what, even though theories that emphasize distribution have microfoundations that are quite as solid as the dominant mode of economic thinking. Furthermore, the dominance of these economic theories has had profound political consequences, as scholars as different as Jack Knight and Jim Johnson, Mark Blyth and Steve Teles have documented in different ways.
The reason that Piketty’s book has gotten such a reaction – both from its advocates and its critics – is because it threatens to upset the current equilibrium in economic thinking. As Mike says, it threatens to open up new questions – questions which are profoundly and politically uncomfortable for dominant approaches in economic thinking. The result is that it isn’t only the rich that are freaking out. I would guess that one can explain the immediate reaction of 85% of economists and public writers to the book by looking to their priors on this question – whether they like to emphasize efficiency questions over distributional concerns, or vice versa (another 10% can be explained by whether the writer in question is miffed because he/she and his/her mates do or don’t get sufficient citations and respect). People who might have found the book interesting had it been an academic exercise, and perhaps even agreed with large parts of it, are freaking out because they worry that it has serious implications for political debate. If people start debating whether capitalism is inherently rigged, so that those with a lot of capital will naturally do better than those who won’t, … well who knows where they might go next.
To be clear – this doesn’t invalidate criticisms of Piketty’s book, any more than it means that his arguments are necessarily correct. Even if the actual reason why people are casting around for Devastating Critiques is because they don’t like the book’s political implications, they may actually find good criticisms, and uncover real mistakes. Motivated reasoning, if properly harnessed, can be epistemologically very valuable. That methodological critics of Piketty (and people insistently suggesting that there’s nothing very interesting to be learned from studying the distribution of wealth) nearly all clump together in one ideological camp, and people defending the methodology clump together in another, doesn’t mean that the dispute between the two isn’t useful. Argument about politically divisive topics is only disinterested in rare and isolated instances – yet it still can have great benefits. What it does mean is that the dispute, in the end, is a directly political one – over what constitutes the proper subject matter of economics and the other social sciences. Plausibly, it’s the people who are least willing to acknowledge the political aspects of the debate who are most completely captured by them. Practical economists, who believe themselves to be quite exempt from any political influences, are usually slaves of some defunct political philosopher.
[Cross-posted at Crooked Timber]