THE BLOG
08/05/2014 12:43 BST | Updated 07/07/2014 06:59 BST

Piketty and Politics

Everyone's weighed in by now on Capital in the 21st Century. Unlike most of these people, I've actually had time to read the thing (a happy side-effect of two weeks bedrest following surgery. I'm fine now, thanks for asking).

I'm not going to review it - you'll have read plentyofthosealready. Oh ok then, in a sentence: the analysis is excellent, the conclusions are highly plausible, even if based on tenuous evidence; the recommendations are too left wing even for cloud cuckoo land.

But with a year to go until the General Election, what impact - if any - will the work of M Piketty have on British politics?

Well, the message that inequality matters, and that it may well be a defining issue of our political age, is likely to resonate beyond the Westminster village. It is admittedly unlikely that many of the swing voters of Hendon or Harlow have read Capital (it is a little dry in places). But the subtle shift in the political and media narrative that is already evident will sit easily with many voters' current angst about the nascent economic recovery and the country's political direction.

For a discontented electorate, convinced in large part that the country is being run for some faceless 'other' - whether it's the fat-cat capitalists, the immigrant hordes, or the greedy MPs themselves - the story of inequality is an easy one to swallow.

So this will be helpful to Labour, and is likely to embolden Ed Miliband to pursue his core vote, 35% strategy of bashing the fat cats and the Tories (one and the same, in Labour's narrative) and driving the angry hordes to the polls to kick out the Government.

Last week's attack on the rental sector was a very direct appropriation of Piketty's thesis, kicking the owners of capital ("rentiers" is in fact one of Piketty's go-to bits of jargon) to help the worse off in society. It was a pretty smart piece of policy, albeit that you're never going to solve the housing crisis without massive liberalisation of planning laws and building on the green belt (which I still think could be a huge vote-winner for Labour).

But what is next? A wholesale transfer of capital from the wealthy to the people through nationalisation of infrastructure assets is unlikely, but there are other areas at the margins where Ed's team are actively considering significant market intervention in the interests of redistribution (or 'solving the cost of living crisis', as Labour's tired mantra has it). Rail and telecoms, among others, may be next.

And with Janan Ganesh echoing David Brooks' stateside call for the Conservatives to introduce a counter-intuitive property tax in the FT, it's not just Labour who are feeling the Piketty effect. This move is unlikely in itself - David Cameron is in no mood to face down his backbenchers, the Telegraph and UKIP on another policy area in the months leading up to an election. But it certainly raises questions for the other parties as to how they deal with the emerging narrative of inequality in a political context. Businesses are likely to remain nervously on the back foot to see what emerges from Westminster in the months ahead.

So bravo, Monsieur Piketty, not just for a fine work of economic analysis, but also for shaking up Britain's rather stolid political narratives. Chapeau!