Because they're getting wealthier faster than the economy grows, they come to command ever-larger shares of the economy, so even when the pie gets bigger, their slices gets bigger still, and the remainder that we all share isn't just proportionally smaller - it's *actually* smaller. We don't just have less relative to the rich - we have less relative to our parents.

For Piketty, this is an iron law of markets, born out by analysis of hundreds of years' worth of capital flows.

7/

He devotes many of those 750 pages showing how even the most profitable sectors of the economy at any given time are disproportionately benefiting investors, even relative to the most successful managers and workers at any given time. This is where oligarchy comes from: it is the natural end-state of a market economy.

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But (Picketty continues), oligarchy is intrinsically destabilizing. For one thing, once the fortunes of Bill Gates' or Liliane Bettencourt's are large enough, growing them by even, say 1% requires that some capital come from other rich people, because 1% of Bill Gates's holdings will eventually exceed 100% of the holdings of everyone who isn't insanely right. So, over time, rich people eventually have to fight with each other in order to keep getting richer - see, e.g., WWI.

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That's not the only way extreme wealth inequality creates political instability. Once the 1% are sufficiently wealthy, they capture government, and the only policies that can be enacted are those that don't gore some aristocrat's ox, and once the rich become *super* rich, they own all the oxen.

10/

So sensible policies that are needed to ensure an orderly, stable society (for example, limiting war bond repayments to a sustainable level that won't bankrupt the economy to make wealthy bondholders even richer) become impossible, and then you get societal collapse (see, for example, World War II).

The backbone of *C21* is a time-series of 300 years' worth of global capital flows, painstakingly assembled by Piketty and his grad students.

11/

This time series shows the same pattern emerging over and over: as the rich get richer, they capture more and more of the state's policy-making apparatus, triggering more wealth-friendly policies, which make them even richer, and makes their grip on policy stronger. This continues until inequality reaches a tipping point, and then you a rupture, like the French Revolution, or the World Wars.

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These are orgies of capital destruction, and because nearly all the capital is in the hands of the rich, when the dust settles, they emerge with much less capital and much less power. Society is shattered, but it is more equal, and this means that we can once again make good policies that help us rebuild a society that benefits everyone, not just the rich (the French call the 30 years following WWII "the 30 glorious years").

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But, if this society doesn't include some kind of mechanism to address the fact that capital is still growing faster than the economy - even a post-war boom economy - then eventually the share of wealth held by the rich will reach a tipping point, and we'll see policies that benefit the wealthy crowding out policies that support human thriving, and the rich will get richer, and they will feud with each other, and society will destabilize, and we will face collapse.

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So, let's talk about Ronald Reagan! By the late 1970s, the share of wealth held by the top 10% had grown significantly from its post-war low point. With all that excess capital, the rich started spending money to promote candidates and policies that would make them richer. At a certain point, they have enough money to buy Reagan's presidency.

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Then, we get a deregulalatory bonfire: lower taxes for the rich, looser rules for finance, fewer protections for workers, less spending on social programs.

This makes the rich richer, even as wages stagnate. The next 40 years are a procession of ever-more-wealth-friendly policies and politicians - not just the Bush years, but also Bill Clinton's welfare bill and Obama's foreclosure crisis - and the rich get richer and everyone else gets poorer.

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Monopolies consume the American economy. GDP goes up, because the corporate sector is super consolidated and it's jacking up prices and slashing wages, leaving more for profits and dividends.

Society grows progressively less stable. Policies that benefit the wealthy at the expense of everyone else - ignoring the climate emergency, slashing the safety net, starving infrastructure, etc - dominate. Inequality worsens. No one can afford a house, health care, or university.

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Your life's savings are stolen by a subprime mortgage, or a pension-fund raid, or bitcoin grift. Instability worsens. Policies that benefit the wealthy at the expense of everyone else - endless imperialist wars, noncompete agreements, private equity rollups - multiply. Wages stagnate. Inequality increases. The rich get richer. One political party is captured by finance ghouls.

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The other one is *also* captured by finance ghouls, but welds them into a coalition that includes virulent, apocalyptic racists.

Which brings us to today, and Trump, and imminent collapse, and Elon Musk and his child soldiers, and JD Vance, and the whole fucking thing.

Today, Piketty posted some pointed thoughts on the situation in Europe in the face of rising American fascism and belligerence:

lemonde.fr/blog/piketty/2025/0…

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It's common for Americans to write off Europe because its "economy isn't growing" the way the US economy is. Piketty points out that this is a mirage: American economic growth is due to rising prices and plummeting wages, which is great for the share price of giant American companies whose cartels and monopolies make everyone except the tiny number of Americans with substantial stock market portfolios much poorer.

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"When measured in terms of purchasing power parity, the reality is very different: the productivity gap with Europe disappears entirely."

Once you adjust US economic figures to account for this, it's clear that America truly is in decline - the real US GDP has lagged China's since 2016. China now has an adjusted GDP that 30% higher than America's, and it's on track to double US GDP by 2035.

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The US is losing control of the rest of the world, and Trump is accelerating this phenomenon. Take de-dollarization: the US (and only the US) can make as many US dollars as it wants, so for so long as things around the world (oil, say) are available for sale in USD, the US can buy them on better terms than any other country in the world:

stephaniekelton.substack.com/p…

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What's more, the fact that dollar-clearing takes place at the Federal Reserve gives the US the ability to spy on and control other countries around the world (think of US SWIFT sanctions on Russia after the Ukraine invasion, or the vulture capitalists who forced Argentina to pay up even after it defaulted on its debts). Trump's pro-bitcoin policies are intrinsically anti-dollar policies.

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The rest of the world was already increasingly nervous about the way that the US dollar is a vehicle for soft power around the world, we're already seeing a lot of oil denominated in rubles, and now Trump is encouraging the growth of a shadow currency that will make it even easier for transactions to take place without dollars (notably, cryptocurrency will help America's ultra-rich evade even more taxes, and commit even more bribery):

programmablemutter.com/p/what-…

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Trump is also waging war on the CIA and NSA. Good riddance, sure - but these are also major sources for projecting US power around the world - think of the NSA's mass surveillance program, in alliance with the "5 Eyes" countries whom Trump is setting out to alienate.

Then there's trade. The US has pushed pro-oligarchic policies on the world through its trade deals.

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To access US markets, foreign governments must enact punitive laws that make it easier for US giants to loot their economy, like IP laws:

pluralistic.net/2025/01/15/bea…

and investor-state dispute settlements:

pluralistic.net/2024/03/27/kor…

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Not all the profits of giant US companies arise from ripping off 99% of Americans. Some of those profits come from ripping off foreigners, but that's only possible because foreign governments have passed looter-friendly policies in exchange for tariff-free access to US markets. Now that the US is shutting that down, there's no reason to allow America to continue stealing from your citizens.

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As Piketty says, Trump dreams of a "national capitalism." National capitalism is a disaster, even compared to global capitalism:

> the strength of national capitalism lies in glorifying power and national identity while denouncing the illusions of carefree rhetoric about universal harmony and class equality. Its weakness is it clashes with power struggles and forgets that sustainable prosperity requires an educational, social and environmental investment that benefits all.

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National capitalism walls its oligarchs off from the possibility of draining the riches of other countries, limiting them to domestic looting. Eventually, all the wealth in the country is held by its looter class, and the only way they can grow is by attacking each other. No one has more direct, recent experience with this phenomenon than Europe, a wealthy trading bloc of 500m. Trump has demanded that the EU commit 5% of its GDP to building up arms and its standing armies.

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Piketty says it's a dead end. As the US is abandoning its role as global rule-of-law haven and transaction clearing house, the EU has an opportunity to become a very different kind of world power:

> Europe must heed the calls from the Global South for economic, fiscal and climate justice. It must renew its commitment to social investment and definitively overtake the US in terms of training and productivity, just as it has already done in terms of health and life expectancy.

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> After 1945, Europe rebuilt itself through the welfare state and the social-democratic revolution. This project remains unfinished: on the contrary, it must be seen as the beginning of a model of democratic and ecological socialism that must now be thought through on a global scale.

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I'm on a 20+ city book tour for my new novel *Picks and Shovels*.

Catch me in LA TONIGHT (Feb 18) with Wil Wheaton:

dieselbookstore.com/event/Cory…

And in SEATTLE TOMORROW (Feb 19) with Dan Savage:

eventbrite.com/e/cory-doctorow…

More tour dates here:

martinhench.com

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Image:
Cryteria (modified)
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EFF
eff.org/files/issues/eu-flag-1…

CC BY 4.0
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eof/

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C., there’s a corresponding and likely causative psychological and genetic cycle to go along with his cycle, of the people getting nasty from the social control, while capital grows, aggression and/or madness grows from the violent control, from spanking and police grows.
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The rich must fight, but something makes the people go along with it all, and it is not some eternal bestiality, it is a response to intergenerational abuse, and there is most likely a genetic response, a trait that grows. A genetic enshittification as well as a psychological one. 💜
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Great stuff as usual