Capital and ideology in the city

Thomas Piketty’s eagerly awaited Capital and Ideology opens almost poetically, with real force – ‘Every society must justify its inequalities’ (p.1). In all nations and at all times societies require some sets of ideas and beliefs capable of defending the disparities that exist within them. Over the course of time societies have achieved this in their own distinctive ways, much of this more than 1,000 page work delves into the long history of such arrangements. Piketty calls these narratives and systems of thinking inequality regimes. There is power at work in these narratives, ideas and legitimising frameworks, deployed by elites, enshrined in laws and regulations, and which are often shared more broadly within society as a whole. Yet, like the story of a leisured, narcissistic and complacent bourgeois party at the centre of Jean Renoir’s film La Regle du Jeu (Rules of the Game, 1939), the patrolling of legitimating codes and ideology may be subtle, but it is also a kind of violence. Hierarchies are defended without question, internalised in ways of being, outsiders or threats are deftly repelled or, worse, humiliated. Arrogant, ruling and wilfully ignorant elites often remain left untroubled by potential challengers.

As Piketty highlights, there is nothing natural or necessarily desirable about the choices we make about how to live, for choices they are. Defences of the established order can be challenged, and such challenges may become emphasised. This may occur due to the feeling that inequality has become too excessive to remain unquestioned, or because the plight of the system’s losers becomes evident and untenable. Alternatively breakdown or change may be presaged by shifts in the (inequality) regime itself, a querying of the narrative and appeals to modes of social organisation. Here we might think today of the significant redirection of corporate mandates away from shareholder primacy to a wider recognition of stakeholders that has seen around 200 CEOs signing up. Of course we might also believe such effort themselves to be efforts at shoring-up a defence of privileges! Nevertheless, as Piketty reminds us, social organisation is always made-up of choices, we have the power to put in place arrangements other than the ones we may see around us.

Today the social sciences have sharpened their tools and strengthened the measures they use to investigate the operation of our own inequality regime. Piketty refers to this as a neo-proprietarian society in which property and finance have generated profound returns to those with wealth, leaving others languishing in ways not seen since the belle epoque of the roughly 1880-1920 period. The work of Piketty’s earlier Capital in the 21st Century and those of his various ‘comrades in data’ (Saez, Zucman in the US, Shaxson, Christensen and others in Europe) offered, through painstaking analysis, a new narrative that callanged the inevitableness or desirability of where we are today. This body of work offers a challenge to the order and its elite defenders. But its targets are, to take up the question of ideology, the many others brought under the influence of the narcotic quality of the kind of inequality regime we find outself in today – ‘populist’ governments and leaders, and the many defenders of the neoliberal or hypercapital order of today’s global north and beyond (in banking and finance, business, government and elsewhere).

Once we move beyond the ‘simple’ question of the extent of inequality to the ‘whys’ of that inequality (why particular groups win and lose over time, why such inequality is defended in circulating systems of thought and discourse), things may change as a result of the sudden redirection of social science in its focus ‘upwards’, allied to the work of numerous investigative journalists, online leads and cases brought. For those on the left (crudely speaking, the ones who would seek to challenge the inevitability or desirability of the extent of inequality) shattered by recent electoral losses the chink in the edifice of the current regime is the potential for new social scientific work to challenge or expose such a grossly unfair system. Many governments, corporate leaders, parties and those in civic society have become particularly interested in how to re-organise the world around them, perhaps sparked by realisations of the long-term redundancy of a business as usual model in which environmental concerns pose an existential threat.

Piketty’s practical responses to wealth inequality (forget about income if you want to see how big this thing is) are compelling. The first is to understand how important education is to circuits of opportunities, and its closure to many others (among other things the book highlights the break between the working class and parties of the left on the back of these educational shifts). But this cannot work without a much fairer playing field and this field is, of course, profoundly shaped by capital – wealth would have to be redistributed for an education system to be properly funded and for all to ‘start’ from a similar position. The second set of proposals are focused on the need for tax, and for these efforts to be focused on annual taxes on overall wealth (getting rid of unpopular and widely avoided death duties). No longer would billionaires pay rates lower than their cleaners, all wealth (shares, property and other assets) would be taxed annually as an effective means of bringing it into wider circulation, benefitting those without a stake and challenging the place of dynastic and rentier fortunes.

City, capital, inequality

Cities lie at the hear of the ideological conditions detailed by Piketty, though they inevitably play almost no part in an account built from national data over, in some cases, centuries. Yet urban life is central to the inequality regime of today’s hypercapitalism and property-based rules. It seems particularly productive to think of how the governance, economy and society of cities might be instrumental in helping us to flesh out the concept of inequality regime, to place that regime, so to speak, and to understand how space inflects, shapes and might even deepen ideological defences and narratives.

In a financialised world property assumes a central place with the creation and trade in homes and other real estate central to such an economy.  The obvious point to make here relates to the location of those physical assets, clustered (particularly in the case of the most valuable forms of property) in cities, and in the dominant ‘world’ cities in particular. The property-based regime is, for the most part, a distinctly urban regime, an order that shapes social divisions, but also an environment in which we as bodies experience those inequalities. It is in the city that we see the system’s winners and co-ordinating elites, here we find residential landscapes circulating or built for capital investment and it is again in the urban realm that the finance systems, regulatory agencies and other key components of a capitalist property-based economy are settled. If one could pan out to see this regime at work we could also see how it is predicated on the flows of many billions of coins flowing from the pockets of the global mass, the stagnant bottom fifty percent, via their phone contracts, private rents, uber payments and so on. We could then imagine these coins sliding into the pockets of corporations, investment funds, banks and rentier capitalist superheroes and their combined use to purchase fine homes, football clubs, clothes, investments and multiple other purchases (we might also examine efforts at political influence). These purchases by the rich and by those sectors and operatives who have become immensely on the back of this system are instrumental to our understanding of how this regime dislodges the low-paid, raises the cost of living for whose who work and who lack access to the wealth and property increasingly hoarded by the relative few.

We might say that none of this new, but its intensification appears qualitatively different, and its capacity to obfuscate the sources of exploitation and marginalisation are powerful. Grappling with this is important if we are to understand the continued legitimacy of the system, and it is here that we are again back to Piketty’s challenge to understand the functions of ideas and narratives underpinning urban and national life today. One might also add that it is in many cities that that compact between capital and labour is most evidently unravelling, it is here that we see rioting and protest, and it is here that voting has produced a more variegated pattern of allegiances under populist mantras around national sovereignty in various contexts. Here again the relationship between the city and this particular kind of inequality regime seems important to consider in more detail.

A focus on wealth takes us to the city, not just because of the overwhelming concentration of the rich in their largest and most economically powerful examples, but also because the physical assets and real estate of the city is itself a critical component of wealth storage and accumulation. We can also see how investment in property has become a central method of taking value out of the city (often through offshore funds used by the wealthy) and para-criminal enterprise as billions are used to buy and later sell homes and estates to hide ill-gotten capital (here again the state’s silence, in statistical or policing terms, is notable). In Piketty’s terms the use, accumulation and storage of property are particularly important to the kind of economy that we inhabit because it is to a proprietarian inequality regime that we are now subject.

We need to understand how such unfair conditions continue to stand up, despite their evident inequalities. It seems important to again consider the role of the city in this context. It is the city that is the very theatre in which these narratives are identifiably played-out, not least in the fray of political discussions and media narratives lauding a capitalist property economy. We can also see how the city is the site in which conversations, plans, investments and markets operate and which are identified as the lifeblood of its economy. Any political or social challenges to such activities and narratives are easily dismissed, not least by the derisive snorts of those who appear to wield knowledge of how this world works (the Treasury view and so on).

In another key sense the city helps to bind adherents to its unwritten codes by galvanising into action the many who rely on or who are linked to the operations of the economy and to its wealth elites. This comes in the form of so-called dark money in politics, the more overt social networking and schmoozing between wealth, political and corporate elites, the chasing of international investment capital and buyers by developers and in the sale of public and other assets. More subtly still the physical environment of the city provides an elaborate labyrinth space constituted of private clubs, fine homes, restaurants and other sites of informal interaction. These spaces offer a particularly comfortable but also physically shielding environment that enables the economic order’s casualties and losers to be rendered more or less visible. The city in its physical form helps to hardwire the legitimation of the inequality regime at work around it. Numerous historical examples of suburbanisation, gating and other forms of elite escape support this idea.

In these various examples it seems productive to think of an inequality regime not simply in terms of economic, social and political codes and systems of thinking and justification. It would also be useful to supplement these important ideas and proposals with greater recognition of how space might shape and inflect these systems and how the institutional and spatial form of cities is at work in the modes of justification used to defend or naturalise contemporary forms of inequality.

7th February 2020

Looking towards St Paul’s catherdral and, to the right, the City of London.