As large housing estates are being demolished and the age of great social democracies recedes, taking with it any notion of an architecture for the public, OMA partner Reinier de Graaf asks if there is any alternative to building capital
It is almost a year since Thomas Piketty published his book, Capital in the Twenty-First Century. If Piketty is right, we can once and for all bury the illusion that the present economic system ultimately works in the interest of all and that its benefits will eventually trickle down to the poorest in society. Contrary to what every economist after Keynes has been telling us, the inequality produced by capitalism may not be a temporary phase that will ultimately be overcome; it is rather a structural and inescapable long-term effect of the system itself. Piketty’s analysis is exceedingly simple. He identifies two basic economic categories: income and wealth. He then proceeds to define social (in)equality as a function of the relation between the two over time, concluding that as soon as the return on wealth exceeds the return on labour, social inequality inevitably increases. Those who acquire wealth through work fall ever further behind those who accumulate wealth simply by owning it. Only during the 20th century - under the pressure of two world wars, social unrest, revolutions, labour unions and the daunting presence of a global alternative to the capitalist system in the form of a (former) communist world - only during this unique capsule of time, was capital briefly surpassed by labour as the prime means to accumulate wealth.
Whether or not the 20th century was a brief exception in the inescapable mechanism of a deeply fraught economic system remains to be seen. Much will depend on what happens next: the 21st century will determine the legacy of the 20th. So far, the signs are not encouraging: since the late 1970s, after the great conservative revolution set in motion by Reagan and Thatcher, the promise of accumulating wealth through work has steadily lost ground. The fall of the Berlin Wall (generally claimed as a victory of that same conservative revolution) and in its wake, the wholesale collapse of the Communist Bloc, have exacerbated this trend. If current indicators are right, we could well be faced with a situation in the near future where, for the first time since the end of the 19th century, returns on wealth through ownership will again exceed those of labour.
Indeed, if Piketty’s argument holds true, the 20th century will have been no more than an anomaly: a brief interruption in the systemic logic of capitalism, where the inherent accretion of capital through capital remains an unbreakable cycle. This simple economic conclusion may have social and cultural implications beyond our wildest imagination. When a lifetime of labour can no longer match the returns on an acquired fortune, inherited wealth once again becomes the defining factor of class distinction, reducing any notion of social mobility to a remote possibility at best.
Furthermore, if the 20th century really was an anomaly, then perhaps so were its ideals: an entire period characterised by an enlightened belief in progress, social emancipation and civil rights can be retroactively discarded as a fleeting moment of self-delusion - (no more than) a footnote in the long course of history. For the generation currently in a position of power, raised and educated in the 20th century, this is difficult to acknowledge. For them, the moral imperatives of the 20th century are beyond question, irrespective of political choices. (Even the most ardent supporter of the current free market economy probably does so only because s/he believes that the system ultimately acts in the interest of all, rather than explicitly supporting the notion of inequality.) The current generation, whether left or right, has not (yet) had its faith in the great emancipatory mechanisms shaken in any way. It is all they know and all they have ever known.
I was born in 1964, started primary school in 1970 and graduated from university in 1988, one year before the fall of the Berlin Wall. I received 18 years of public education, during which the notion/dogma that one progressed through study and hard work was firmly instilled. You earned your rights and did not inherit privileges. Education was received on the proportional basis of your talents, not the size of your wealth. We lived in the conviction that cultural and religious differences, Protestant and Catholic alike - there was no sizeable Muslim population yet - would eventually merge into a single middle class. The absence of a poor ‘under class’ was generally interpreted as the logical consequence of the (apparent) absence of an ‘upper class’. Inasmuch as we were aware of an upper class, in no way did we have to reckon with or even acknowledge them. Sure, we had a monarchy, but even their implication in the occasional corruption scandal in no way shocked our faith in their absolute irrelevance. They were a symbolic necessity, there to represent the unity of a nation that in every other respect was getting by without them. Power was in the hands of an elected government, independent of our royal head of state. (It was not until much later, until the mysterious release of Dutch Greenpeace activists in Russia, that I realised things were perhaps not that straightforward …) Wealth existed, but it did not guarantee a right to power, nor should it. Our leaders were chosen by us, for us, from us.
If Piketty is right, those self-evident ‘truths’ may well have been based on quicksand. The many privileges/blessings of a life in the latter 20th century, particularly in Western Europe, were not the natural outcome of a progressive evolutionary process, but the result of a short-lived and unsustainable suspension of the real fate dictated by its contemporary economic system. Only under severe (political) pressure did capital refrain from showing its true face. In that context, Western Europe got a good deal - protected by American intolerance towards the threat of Communism, but itself threatened (or savvy) enough to maintain a generous welfare system, dissuading its citizens from entertaining any real Communist sympathies of their own. With the dissolution of the Communist Bloc, much of that threat is gone and the economic trends of most European countries after 1989 speak subsequent volumes: welfare cuts, the erosion of pensions, the reduction of public services, and so on.