Student support: what would Thomas Piketty do?

It may be a while before many of us will honestly be able to say that we have read much, or even any, of Thomas Piketty’s Capital in the Twenty-First Century.   Even so, accounts of the book such as the one recently given by Paul Mason in The Guardian are enough to make you wonder what Piketty would do, given the chance to redesign any of the various student support systems currently in use in the UK.

Here is Mason’s summary: “Piketty’s argument is that, in an economy where the rate of return on capital outstrips the rate of growth, inherited wealth will always grow faster than earned wealth. So the fact that rich kids can swan aimlessly from gap year to internship to a job at father’s bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident: it is the system working normally. If you get slow growth alongside better financial returns, then inherited wealth will, on average, “dominate wealth amassed from a lifetime’s labour by a wide margin”, says Piketty. Wealth will concentrate to levels incompatible with democracy, let alone social justice. … 21st-century capitalism is on a one-way journey towards inequality – unless we do something”.

At least one commentator has already suggested that Scotland’s system of free tuition is an example of exactly the sort of thing Piketty would approve of. However, once the whole Scottish system of student funding is considered as a package, as it should be, the opposite seems more likely to be true. Unlike any other part of the UK, Scotland expects the highest levels of student debt to fall on those who started out from poorer homes while many from better-off backgrounds are likely to leave university with little or no debt at all. The children of the poorest will therefore have to forego more of their future earnings than the  children of the better-off, even if their wages are lower. That is a policy which will clearly make it harder for people from poorer families to “amass wealth over a lifetime’s labour” while advantaging those with more family money behind them. Piketty would surely see such a system as part of the problem rather than the solution.

Even a modest attempt to reallocate Scottish student debt more equally across the income spectrum would almost certainly be fiercely resisted by many at higher incomes.  Referring to Piketty may be popular. Following his arguments to their logical consequences is likely to prove less so. As Mason puts it: “[Piketty] calls some of [his solutions] “utopian” and he is right. It is easier to imagine capitalism collapsing than the elite consenting to them.”

A longer reflection here (Piketty) on where Piketty’s arguments might lead for students in higher education.