Paul L. Caron

Tuesday, April 5, 2022

NY Times: Thomas Piketty Thinks America Is Primed For Wealth Redistribution

New York Times, Thomas Piketty Thinks America Is Primed for Wealth Redistribution:

PikettyIn 2013, the French economist Thomas Piketty, in his best seller Capital in the Twenty-First Century, a book eagerly received in the wake of the 2008 economic collapse, put forth the notion that returns on capital historically outstrip economic growth (his famous r>g formula). The upshot? The rich get richer, while the rest of us stay stuck in the mud. Now, nearly a decade later, Piketty is set to publish A Brief History of Equality, in which he argues that we’re on a trajectory of greater, not less, equality and lays out his prescriptions for remedying our current corrosive wealth disparities. (In short: Tax the rich.) If the line from one book to the other looks slightly askew given the state of the world, then, Piketty suggests, you’re looking from the wrong vantage point. “I am relatively optimistic,” says Piketty, who is 50, “about the fact that there is a long-run movement toward more equality, which goes beyond the little details of what happens within a specific decade.” ...

What did you think of the billionaire tax that Biden just proposed?
It would have been better before his election. If you had told the American public before the elections that he wanted a wealth tax — which again is something that is very high in opinion polls — this would have been much easier. This could have forced the Democratic Congress to take a stand. It’s more complicated now. But if it works, it’s better than nothing. ...

You know, I do find it hard to wrap my head around the idea that after 40 years of worsening inequality, you — the inequality guy, Mr. r>g — are publishing a book saying we’re on the right track historically. It’s sort of cold comfort to know we’re more equal today than we were 100 or 200 years ago. Really give me a reason to feel as optimistic as you do. 

“Give me a reason to be optimistic?” By looking at my historical evidence, by thinking about the big picture, I have become more optimistic. I was a bit puzzled that many people looking at “Capital in the Twenty-First Century” came away with a pessimistic conclusion. I’m trying to show that the key in history is not the big catastrophes but the positive political construction of an alternative, and this process started with the French Revolution, the U.S. revolution. This process toward more equality is more deeply rooted in our modern ethos and modern political cultures than most people believe. I remember in 2014 having a public discussion with Elizabeth Warren in Boston. I was talking about a progressive wealth tax with a rate of 5 percent per year or 10 percent per year on billionaires. She looked at me like, Wow, that’s too much. Joe Biden today, a centrist Democrat — who voted for the Tax Reform Act of 1986 — is coming in with a wealth tax. Things can change pretty fast.

(Hat Tip: Michael Talbert)

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