Piketty: Quality of Life for Billions of People is at Stake

sometimes democratic party leaders in the us are you know similar political leaders in europe saying you know there's no way we can bring them back you know we've done everything we could they just don't understand you know final point look if you say that you know how can you then convince other people or other parts of the world that you believe in electoral democracy hello this is rob johnson president institute for new economic thinking we have the good fortune today to be in conversation with a person who i think my young scholars should study closely not just your work but your courage your breadth of curiosity and the way in which you how would i say rigorously analyze real problems and uh i'm talking about thomas piketty who is a professor of economics the paris school of economics and author of many many articles in all the top journals he's written a number of books most powerfully at least in my experience was capital in the 21st century capital in ideology i've skimmed through a time for socialism in his new book on the how would i say brief history of equality what i am stunned by in preparing for this conversation is in these difficult times how positive constructive and courageous this gentleman has been and i see this book as an example like i said for our young people to follow but i also see a long history of work when i was a graduate student i knew dr anthony atkinson worked with him and the whole uh group including uh ficondo alvarez gabriel zeppelin emmanuel science and dr pekiti as they built the world top income database and basically created the platform for rigorous analysis of the questions of inequality that's a tremendous gift and it's a gift that keeps on giving as you're going to find out in the next hour thomas thanks for joining me it's a pleasure to have you here thanks thanks for inviting me so let's talk with that body of work with the prominence of you and that whole constellation of people that you work with what inspired you to create this particular message well you know it was important for me you know to try to write a short book on the history of equality that's one thing you know my previous books i mean i don't regret anything but you know of course they are quite long you know in particular capital and ideology was you know 50 percent longer than capital in the 21st century which was already very long and so aft after you know after writing capital and ideology i thought okay i have to stop somewhere you know i cannot continue writing longer and longer books and so you know that's objective number one was to write something more concise and objective number two and i guess the main novelty of the book it's not only that it's shorter it's that you know by by being shorter it i i i sort of clarified i think the general message and the sort of the main lessons that i have learned from all this work and and i guess the main message that i'm trying to push in this new book called a brief history of equality uh as opposed to inequality is that you know i try to develop a sort of optimistic perspective i try to show well look you know this can seem paradoxical because there's lots of terrible things in the world today and and you know in some dimensions inequality has worsened in recent decades but if we take a very long-run perspective in fact you know there's been a long-run movement a lot more equality both more political equality social equality and also economic equality to a large extent this is a movement that has never been easy that has never been natural in any meaningful sense you know it has been grounded in political mobilization social struggles and most importantly you know the constructive transformation of institutions you know the development of new legal system fiscal system educational system electoral rules this is a movement that has not been there forever you know it's grounded in history it's not a long-run trend that has been going on since the neolithic times you know it started basically you know at the end of the 18th century with the french revolution the u.s revolution to some extent and and it starts in particular with the abolition of the tax privileges of the aristocracy in the french context it also starts with the first slave revolt in sandoman in 1791 which sort of sets the beginning of the end of slave and colonial societies and and then you know in the following two centuries it has been continuing you know in the 19th century with the final abolition of slavery the the development of the labor movement the rise of male suffrage monster french and in the 20th century with the rise of universal a female suffrage a decolonization war the civil rights movement in the us the rise of social security the rise of progressive taxation and this is a movement that's continuing today you know of course with the black lives matter movement the metoo movement and and you know this long-run quest for more social political economic equality equality of status is still going on because we still you know we still live in societies where there is enormous power of money for instance in politics so you know we are not back in the 18th century with the privileges of the aristocracy but you know there are all sorts of new privileges around and you know our democracy is still very very imperfect and incomplete and you know maybe one day in 50 years 100 years when we look at two days period where you know you can put whatever private money you want with no limit in the financing of political campaign in the influence of the media you know we have such a system of unequal political participation and equal worth that you know maybe one day we look at this at something sort of intermediate between uh you know 19th century or 18th century democracy and and and more effective democracy and it is the same for other dimensions of inequality you know we you know okay we've seen the end of slavery decolonization civil rights but we still have enormous racial discrimination uh racial injustices within each country and at the international level so the general you know viewpoint in the in the book is okay you know there's been a long run movement towards more equality this has been very successful in the long run this has come with more economic prosperity you know in particular the rise towards more equal access to education has been absolutely central both for the rise of more equality and more prosperity we can and we should continue in this direction in the 21st century this will take again you know big political organizations big political battles but we should not lose sight of the fact that you know history is not deterministic it's not frozen so you know the enormous transformation in the in the political systems the economic system the fiscal systems that have already happened over the past two centuries you know it's something you know you if you had told someone in 1900 or 1910 that there would be a enormous progressive taxation rise of social security in the following century you know many people who have not believed it so i think when we look at the future we have to take this long-run perspective so you know in my book i when i make a proposal about what i call a you know new form of democratic socialism and participatory socialism multicultural socialism you know i'm not saying this is going to happen next week right away you know but at the end of the day you know i think what the kind of perspective that i am proposing the kind of international economic system that i am proposing you know is not more different from the system we have today then the system we have today is different from the system we had one century ago so it's it's i think it's important to reopen the discussion about the kind of long-run future we want which doesn't mean we will get there next week but if we don't even know where we want to go in 50 years or 100 years you know we are certainly not gonna get anywhere and you know on the other side of the political spectrum you have all this you know xenophobic racy sort of identitarian retreat movement which you know don't hesitate to push forward you know sort of a very strong view you know and i think very reactionary view of the future and it's very important you know that the progressive comes so to speak or at least you know uh you know people who are ready to to stand for equality equality uh you know of all forms uh you know between social classes between genders between races are you know ready to take again this task of saying look this has worked in the past we've made lots of progress we can we should continue and looking at the historical record uh you know i enormous success for instance of very progressive taxation of income in the 20th century in the united states you know we have to revisit this record and and and you know in order to push an ambitious uh agenda for the for the for the future so that's you know what i'm trying to contribute to in this optimistic book which i should let me just conclude you know this is a book of my own you know of course i'm the only one responsible for you know whatever your views are being expressed but you know by the kind of collective work and particular enormous project of historical and comparative data collection on which i rely and which i and you know i'm trying to give a short synthesis of this work in this new book although this research work could never have been conducted without this incredible international research network so there are all the great people you have mentioned juliette kinser and emmanuel says man but it's much bigger than this it's over 100 researchers from all over the world lots of institutions also help a number of years ago and you know united nations development program european research council you know lots of public and non-profit institutions that helped us develop this little uh you know global public good where we are trying to to provide more transparency on income and wealth inequality because in the end we really believe that this is the sort of democratic mobilization democratic awareness and you know the fact that more citizens can appropriate for themselves you know this kind of evidence you know economic data is too important to be left to economists and to experts we want citizens to be able to appropriate this for themselves and so you know we are trying to contribute to this with this little global public good which is a world inequality database and and this could never have been possible without so much support from so many people and yes so you know this little book that i write is just one little output out of this much broader collective research agenda many people treat the economy like it's some mechanical thing that doesn't require software to use an analogy and the software of governance of innovation of thinking about how to handle externalities in public goods those are little building blocks in the back pages of our textbook but you're bringing all this to light and you're also bringing to light in in the more recent books and interviews that let's say there's a big difference between scientific analysis for the public good and marketing for self-interest and a lot of the information in a lot of the debate i see you providing what i'll call the north star of the public good to navigate toward if no one does that we don't know where we're going we're swamped in the marketing for self-interest and despondency rises and what i might call in the despondency and resignation the temptation towards authoritarian alternatives becomes stronger so i see i see what you're doing is very purposeful and it's very deep and it's very credible but i do i'm quite interested in what you might call the institutions that you think at this time perhaps with climate on the horizon having just experienced the pandemic the i just made a podcast and talk with the people max lawson at oxfam they said the top 10 wealthiest people on earth doubled their net worth versus the pandemic and didn't pay any tax when a reasonable slice tax not of their wealth but of the increment of their wealth could have largely paid for vaccination of everyone in the planet and saved trillions of dollars in fiscal stimulus that people used in coping so i see all of these dilemmas many people who are not economists not trained informally like you and i however or many of our audience today they smell a rat right now but they just don't know how to find the exterminator and get back to feeling like they're on a healthy backyard how uh how do we organize the process how do we create the nautical society that's directed towards your north star especially in the realm of globalization where the nation-state is not any longer so like the treaty of westphalia model doesn't work in the era of nanoseconds mobility of capital people hiding their money offshore and all kinds of other things so we have to have almost like a global governance solution that's even before when you talk about climate yeah though these are big challenges you know i think the you know the democratization of economic knowledge you know is really to me a big part of the solution and you know there is so much more progress to be made in this direction you know i've tried to contribute a little bit to that but let's be honest you know the kind of very long books i have written even though it sold a lot of millions of copies you know i'm not sure this is really something uh you know everybody is going to read until yet so you know writing short term books can contribute but it goes much beyond this you know i think for instance you're in the world inequality database today it's still you know it's easier to use it when you're when you're a researcher or scholar you know there are lots of other ways to communicate knowledge you know through videos through through training sessions through you know other means of communication which you know modern communication technology you know would allow us to do so much more and to be honest you know we've done so little for now i mean partly because we were focused on the research partly for our lack of resources partly you know because this takes time and but you know we are not going to stop there you know we that's a long-term commitment i i really believe that you know a big part of our you know democratic problems today and you know sometimes some of the disappointment with with democracy has to do with the fact that uh you know economic knowledge and economic issues you know have sort of been left to uh sometimes a very small group of experts with very conservative views and uh and you know we you know getting back the citizens and you know also other uh social scientists from sociology from history for education you know to go back to economic issues and not leave these issues to to to smaller small self-proclaimed experts you know i think is very very important now there's also you know you mentioned the sort of the nation state and the national limitation of our public conversation i i have been involved in a you know another project in recent years which is called the manifesto for the democratization of europe which you know we tried to develop a sort of grassroots we got like 200 or between 150 and 200 thousand signatures in europe which is not huge but it's you know it's the equivalent of the population of cryptoblog after all which have a veto power on every tax decision in europe you know this is less than uh this is you know this is less than one percent this is less than 0.1 percent of the population of europe so you know in in in france under austrian regime the nobility was about 0.5 to 1 percent of the population and they had just invaded power on the tax legislation until you know the revolution took it away from them so today you know we live in a very different world but we still have some sort of deep institutional problem so in the case of the european union the fact that 0.1 percent of the population can have veto power on any possibility to have a tax policy for the other you know 99.9 percent you know you know is a problem so you know we have set up an institutional system which has lots of good ingredients into it you know i am a federalist european and i am a federalist citizen of the world so you know i believe you know we need more european union we need more agreements between the african union the european union we need the arab leagues to develop again new more ambitious federalist approach to solve the problem of the middle east so you know i am a deeper federalist and internationalist but we need to put you know international cooperation you know to the service of social justice fiscal justice you know if you so in the manifesto for the democratization of europe what we say basically is okay you know a group of countries you know say you know the core eurozone countries should be able and should decide on their own you know to create a common uh democratic assembly so that they can have a you know common budget in terms of green investment in terms of progressive tax on high wealth high income citizen and you know if if other countries in the european union want to join that's perfectly fine but you know if they don't want to join they should not make it impossible for countries that want to move to to you know to a more more equitable kind of of political and economic system to to do so because if we continue uh you know with with the free trade free capital flows without any tax coordination without any coordination about carbon emission and and you know social objective and inequality objective uh you know then we should not be surprised that that we have you know very big part of the lower income groups and you know lower middle income groups who feel very negatively about globalization and about european integration in the context of europe and you know this is what has led to uh to brexit this is what has led to some extent through trumpism and and i'm really trying hard you know in my you know in my own country you know to where you know there's a tendency today in the european union to say okay you know brexit you know this crazy british nationalist there's nothing we could do to keep them with us you know they were just crazy but in fact you know when you look at wuverty you know for brexit you know you have the same profile that what we had in france when we had a referendum in 2005 uh about europe you know which is that the upper income groups upper education groups are very happy with european integration globalization lower income groups lower middle income groups are very negative and you cannot just say okay you know there are nationalists they are stupid they don't understand we will explain better you know i think this has to do with the sort of structural problems in the way we have organized globalization and and the fact that it benefits in a disproportionate manner the most mobile economic actors in particular you know we've created a very sophisticated legal system of free capital flows without any control and without any way to to make the different uh social groups contribute you know in relation to how much wealth and income they have accumulated so you know you create a system where basically you can benefit from the public infrastructure of a country from the public education system in a country in order to accumulate wealth and then you know you can press on a button and transfer your assets in another jurisdiction and nothing has been planned you know to follow you and to make you contribute in proportion to you know how much you have benefited from the public infrastructure and how much you have been able to accumulate and then you explain the immobile classes you know the rest of the population you tell them oh you know that's too bad we don't know where the high wealth individuals have gone and we are going to have to tax you you know the immobile people because at least you're still there but you know at some point you know this is a machinery to make the middle class and the lower middle class you know very skeptical about this entire organization which has nothing natural you know it is man-made it is a specific institutional setup and you know the institution could be designed differently international uh talks at the level of the oecd g20 you have started to you know since the 2008 financial crisis to talk about this and move in this direction you know we've had this agreement last year about the minimum tax rate and multinational cooperation but this is still far too uh limited and in particular you know for on that example you know the 15 percent minimum tax rate was far too small you know small and medium-sized companies and middle class taxpayers very often a lot more than 15 percent you know if you include income tax social contribution everything so you know if a multinational creating a subsidiary in the tax event can be can pay only 15 percent that that won't work and in addition probably the even bigger problem with the agreement last year was that the countries in the south you know didn't get anything so it was basically a scheme where you know rich countries in the north will split between them you know some of the tax base that is currently located in tax sevens in the in the north and the south will get almost zero share of the of the new tax base which to me is the biggest problem and and you know this is what makes this kind of deal completely and unsustainable you know especially given the huge uh you know damages that countries in the south are going to suffer because of global warming because of all the negative externalities produced by the north but even without that i mean this makes things even worse but even without you know i think it's important to realize that there will be no rich country or rich firms or rich individuals today without you know the global economy without poor countries you know the entire process of wealth accumulation you know since the beginning of the industrial revolution uh uh you know did not happen you know turkey you know it happens through a global economic system based on global division of labor and global exploitation of natural resources and also of human resources sometimes in a very brutal manner and without this system you know we there will be no rich country today and so i think you know today uh you know of course nobody individually is responsible for all this long you know colonial legacy etc but we are all responsible individually for accepting to to you know deciding or not to take this into account in our analyses of you know the world today and and to take a concrete example you know i think when we talk about international tax reform you know there should be you know every country in the world should receive at least you know positive fraction of the total tax revenue coming from the largest the most powerful economic actors in the world multinationals and highways individuals and every country in the world should receive a fraction of this on the basis of their population and you know even if it's a small fraction of the total tax revenue you know for very poor countries it will make a major difference you know to be able to count on this resource you know as opposed to a system where they have to beg year after year and and you know the basic justification for doing that is simply that there should be a minimum equal right to development to investment in education healthcare from every citizen of the world you know when we were talking about the vaccine during the pandemic we could see or we should have seen that you know everybody should have should have access to this sort of minimal health expenditure but you know it's more general more general than than this and if you add to these all the damages that are that are related to global warming of course this makes the case even more you know even more compelling but but even without that it will still be it will still be you know i think very important to move the discussion in this direction in an earlier earlier essay with daniel steinmetz jenkins i believe it was at the nation uh you talked about kind of the dynamics i'll call it among elites that there's a brahmana elite that is very intellectual and then what we might call the merchant class and i've often thought let's say you know i was an undergraduate at mit went into electrical engineering if i'd stayed in the merchant class building in this digital age and i thought today either i or my son or daughter had a great idea i'd be afraid it couldn't be realized because of the breakdown of all of our systems in other words what i'm saying is the brahman elite should be saying to these guys an ounce of prevention is worth a pound of cure you guys have great commercial ideas but unless we do things like adjustment assistance when we talk about globalization we can make everybody better off and nobody worse off i grew up in detroit walk around detroit or cleveland see if anybody believes that possibility without transformational assistance there's going to be a lot of resistance to energy transformation related to the dangers of climate and global warming so what i guess i'm saying is i think you might be the best friend of a long-term equity portfolio and your own books have taught me that the time when the distribution of wealth gets flattened meaning less extreme is the time of world wars and crisis so if you can like i say do the ounce of prevention you don't have to pay the pound of cure from the social collapse and your good ideas can blossom sorry rob i think i missed i missed something you said you said i would be the best friend of of the merchant class aspiring merchant class because by creating with your vision of these government structures something that what you might call um is making social sustainability more likely you're allowing a blossoming and a vitality and an appreciation of innovation that will make them profitable you're not necessarily enemies in the long run you're right i don't talk about on wednesday night at the bar that's different but yeah you have a prescient vision and they probably don't fear the collective social instability as much as i sense they should yeah no you're right i mean you know it's always the problem uh you know when you look back in time you always feel that you know the elite in some cases you know should have accepted the the structural change before but you know i was talking about the french revolution you know of course exposed you feel you know how did these people you know in the nobility how could they could they imagine that they could get away with the system of you know tax privileges from basically one percent of the population forever you know it looks but yeah you know they were accustomed to an organization of the world where you know if i'm trying to give them a chance and not just being selfish and you know i mean they were selfish of course but if i'm trying to give them a chance about what kind of view of the world justified their abuse you know conservatism and then you know their view of the world just like many elite today is to say okay that's all fine you know you're sorry about uh social justice justice is perfectly fine but the only problem is you know if we start moving in this direction we will never know where to stop so you know it will be chaos basically so we have to organize society through you know strong principles and and the division uh sort of different function in society between the nobility class the clergy class the working class you know was the organizing principle then it was replaced by another organizing principle which was the principle of property so everybody should have access to property right but once you have property you should never question property rights and you know in the 19th century this was very strong this is like when we abolished slavery you know slave owners were compensated for their loss of property so there was no compensation for slaves but there was a compensation for slave owners you know france made it pay you know huge war tribute in effect between 1825 and the 1950s so during almost one century and a half in order to compensate you know slave owners um for their loss of property and you know liberal thinkers when so-called liberal thinkers like toggville you know in 1848 uh was a very strong supporter of compensation to slave owners he didn't want to hear about doing something for slaves because he said you know if you start questioning property rights including the property right of slave owners where are you going to stop because you know what are you going to do with the slave owners who sold this slave five years ago and who now owns a building in paris or castles in bordeaux or a financial portfolio in paris you're also going to go after him and indeed you know probably a fair abolition of slavery you know should have involved the compensation to slaves actually some people at the time like condorcet at the time of the french revolution was not like tavity was in favor of compensation to slaves and and but then you need to have some democratic deliberation and some democratic decision making about where you are going to stop in terms of redistribution of friends and indeed this is a complicated process and and this was a complicated process back then it is still a complicated process today but i think we have no other choice than to to trust democratic deliberation democratic decision making to arrive at some acceptable compromise about you know the right distribution of of income and wealth but i guess you know one sort of perpetual and classic argument by the elite and you know also by you know some you know people you know who are trying to listen the different arguments around is to say okay that's all good and fine but you know where is this going to stop isn't there a risk that this ends up in complete chaos and and look it is a complicated you know discussion in the end my my own view is that if you look at history and in particular the experience during the 20th century with a very progressive taxation of income for instance in the united states you know i think it was a big success and i think that's one reason to believe that you know we can we can do it again in a more ambitious scale involving not only income redistribution but also the distribution of wealth involving you know sort of more international perspective a more global perspective on these issues so you know i that's that's the basis of my optimism is to look at you know these successes in history now is this simple you know is it simple to convince everyone that yeah no it's not simple it will never be simple and so you're right you know in the long run you know even the elite you know should realize that their own prosperity will not continue for very long with without a different uh distribution of weights but yeah you know these things are never solved with unanimity you know at some point this is a balance of power but what i want to stress is that the balance of power is primarily intellectual institutional and not simply you know just you know pure pure balance of power it's it's very important to think and think again about this set of institutions or the economic platform that that we want to put in place and and so you know that's you know what i'm trying to contribute to you uh you mentioned in one of the interviews something let me go broad not for a second i see lots of work that like my kindred spirits growing up in detroit are resentful of globalization some are resentful of automation and machine learning because the school systems haven't built the wrongs in the ladder to allow people to transform from physical work mental work adequately in many of these places but i also see another side of this and uncle milanovic has been very illuminating in his work with arjun jayarev and inet the narrowing of income and wealth inequality between the global north and the global south particularly within china has been quite extraordinary so there are what you might call as somebody once said to me it's not clear that god was born in pittsburgh or detroit meaning there are things to cheer for here and the other dimension which i find to be very very tricky and you brought this up and you talked about uh cultural diversity in among the brahmana elite a lot of the people what i'll call working class particularly white people that i know in michigan say the brahman elite are the marketing men for this new globalized system of power and wall street and silicon valley and what they do is they understand that there's 400 years of woundedness of people of color that something like reparations is deserved but by appointing a handful of them to be in the one percent isn't changing the system in other words they didn't appoint martin luther king to come and upend militarism racism and materialism that they view it as a cynical decoration on the part of the brahmana elite and it doesn't send people in the direction of the merchant class it sends them in the direction i think you called nativism and and it becomes polarized and very ugly because these people feel like those symbols of transformation which are deserved are leaving them out and that deepens their despair and so i i see so many of these things are quite what i'll call supple quite complex and at some level you're talking about i think democracies where what you've got to be is called a human being regardless you've got to be treated equally as though you have birth rights not rights based on one piece or another or a degree or education or the color your skin especially with the history of woundedness it's a very very tricky uh road to navigate when we're in such a tumultuous time now it is tricky and and i think it's also to some extent it's also the price to pay for some of the collective success so you know i think we we again you know like you said you know there's in recent decades you know if you look at the post 1980 evolution of the global structure of inequality you know there's been some negative revolution but there's also been some positive evolution at the international dimension you know i think i am large poor countries if you you know have made progress although not all of them you know i think it depends also on the possibility to construct uh you know to go into a process of state building and construction of state legitimacy which you know is a much more complicated process than just uh you know germany free trade generalizing market competition you know if you don't go through this complex process of state building in the different countries you know you cannot benefit from market integration you cannot benefit from from from anything so you know depending on the country we look at you know china india sub-saharan africa we get very different outcome of globalization depending on you know whether this process of state building uh you know how we developed in different manners and in the past 1980 period there's also been some very positive evolution in terms of gender inequality which is much less extreme than what it used to be although it is still enormous and and in terms of racial inequality you know the thing is that we started from a situation in the in the 60s or 70s which was a situation of extreme racial inequality and a situation in fact where in many cases people with different from different races or from different you know ethnic or religious origin did not even meet so you know they were they met through a complete you know domination uh through you know in the context of colonial empires through basically military relations but there was so very very little direct contact we now live in societies in many parts of the world where people with different origin and you know grandparents or ancestors coming from completely different parts of the world now live in a single political community with in principle equality of political rights although this equality of political rights can be qualified and it's still still far from a really meaningful equality of political voice and ability to influence the process but you know at least in terms of formal rights they live together under the principle of equality of rights which as compared to the situation in the uh you know a few decades ago he said it almost progressed now it still it creates frustration you know it has created frustration in particular uh you know among people who felt that you know their situation has deteriorated or did not improve as much as the rest of the population and they feel they have been abandoned you know for the sake of of making progress for other group of people so you know the only solution is more equality more democracy more redistributions and all dimensions you know so you know i think the only way to make uh you know some of the of the uh oh well today uh feel close to the kind of nativist ideology i was describing and you know a white poor voters in in the us or in europe is to you know the only way to bring them back to the to the political process and to the you know constructive political agenda is to propose you know much more ambitious program of redistribution of income wealth educational expenditures health expenditure you know which which has been proposed so far and and you know i think in the end it's in many cases you know the feeling of being completely abandoned and left behind which has created this resentment the good news so to speak is that the you know if you look at the lower income voters or both in the us or in europe they actually have very low rate of political participation i mean which is not good in itself but which shows that you know there is a demand i think for for something different you know if if if these voters were very happy with the sort of nativist political parties or the xenophobic platforms you know you will see you know 90 percent participation rate and and which you know in in europe in particular in the period 1950 to 1980 the participation rate for for lower income groups was very high you know 80 percent just like for income groups they were voting for labour party in return social democratic party in some cases a combination of socialist communist party they were they were voting if you look at the post 1980 1990 period all the decline in participation right you know has come from from lower income groups probably because you know they felt that the the political choices that were offered to them were not very uh were not very convincing including you know the sort of xenophobic platform that they have been offered which you know some of them go for it because that's the only option they feel they have but at the end of the day most are just stay at home are not satisfied with with either platform so if we if we you know the only possibility in the longer run is to is through changes this will take a very long time because this is itself a process that spanned over several decades but you know there's no other solution in the long run so when i hear you know sometimes democratic party leaders in the us are you know similar political leaders in europe saying you know there's no way we can bring them back you know we've done everything we could they just don't understand you know final point look if you say that you know how can you then convince other people or other parts of the world that you believe in electoral democracy you know it's it's uh you you have to be optimistic you know otherwise you cannot even defend you know the sort of very basis of electoral institution which uh which you know we are supporting collectively okay um just one last question often people in asia talk about who is going to lead the world in the next phase 21st century asia china vying for u.s and many people point to the united states like kishore and mabulbani and say is it a plutocracy or a democracy why are there so many people in prison and so forth but i recently read in the south china morning post a story about when your book i think was capital and ideology was planned to be released in china they don't want to show your research or data on how concentrated the distribution of income and wealth is there so all these people that come out of the marxian or babylon or whatever schools of thought are now in countries and i would add russia to that where the concerns you have about concentration of income and wealth may be as or more severe there than it is in the democratic west yeah definitely so yes they wanted to cut you know every part about china basically so i mean this was ridiculous you know i received this incredible letter from the publisher in china saying okay you know this is the list of you know like 30 or 40 pages basically every page where i was talking about china so you know the nice thing is that okay i told them no way you know you will just not publish my book and in the end you know there were a couple of articles in the in the international press and in the end they came back to me they come back to my french publisher rosary and they say okay we are not going to cut anything so of course we were very suspicious about their challenge in mind and so we said hold on we are going to have a very well written contract where you know we want to be able to check the translation so you know we i hear people who will check the translation here in paris and we're still in the process in fact it's not yet published and we'll see you know if there is a problem we will we will say no anyway you know i was that was an interesting experience what what you know i think the the if the west uh you know want to resist you know the the rise of china and you know the rise of you know autocratic countries in general in barcelona china and russia i think they they also you know western countries also have to put forward you know more ambitious uh egalitarian development model and economic systems that what they have been doing so far and you know if if western countries simply say okay we are the rule of law we are the rule of justice we are the rule of democracy and you should agree with us about everything because we are so much more advanced than you are you know that's not going to work at first because it's not very nice to hear from the rest of the world and nice because this is not true you know we there were some institutions that were developed in western countries that are working better than other institutions but you know there are also so many you know so many problems with the functioning of our democracy you know the funding of political campaign is incredibly unequal access to education is incredibly unequal the international tax system and of course the domestic tax system but particularly the international tax system is is not equitable so you know if western countries don't come with proposals concrete proposal to change this you know how are they going to be able to tell you know people in india or people in brazil who today you know are happy to get you know cheap oil from uh from russia or happy to get you know investment subsidies from uh from china and and you know if you if you you continue with an economic system where we sort of keep the wealth for we don't want to share at all you know any of the new resources that we get from from tax events you know how how can we convince you know these countries you know well very poor you know as compared to western countries that you know they should not take this cheap oil from russia et cetera so all the discussion about you know the the rule of law the rural democracy and of course you know the the you know the fact that we need to to resist to the to the military escalation by by russia and you know possible a new military escalation by china you know after the the you know terrible crash on democracy in hong kong which happened in the past two three years and you know what would be the next step in taiwan but you know if we want to be credible on these issues i think we are at the same time you know to propose to the source and to poor countries you know much better deal and in a way which is a much more respectful of state building state legitimacy so typically we need you know automatic rights to get a certain fraction of certain tax resources in the past rather than forcing you know countries to beg year after year for for aid which typically never comes you know remember some of the commitments that were made at the end of 2015 at the paris submit and global climate change you know are still not paid so western countries during the conference you know committed to actually too small commitments to to finance uh adaptation fund and the mitigation fund that the countries in the south could use in order to limit the consequences of global warming but you know the payments that were announced by rich countries at the time you have still not been made in full so you know the credibility of you know of these countries is severely damaged by this so i you know if we if we want to to you know to be convincing uh and and to confront you know the alternative model you know starting with china this will uh this will have to change okay so let's uh thank you let's turn to the questions uh i have one quick one and then a couple that i'd pair together the first one is what is your view thomas of universal basic income and its potential role in creating income security in a world of growing economic insecurity in its ability to reduce inequality and create a floor of economic rights as part of the citizens rights so you know i i i like the form of of uh universal basic income or let's call you know minimum income scheme that that in fact we already have in a large number of european countries it's not sufficiently automatic but it's targeted on individuals who have a labor income below a certain level and i think it's uh it's uh it could be improved it could be made automatic but i think basically this is the right uh approach because once you pass a certain income level i think we should still have the ideal of wage earner status with a wage stability and labor rights for workers in corporations you know i am very much in favor of having more voting rights for worker representatives in board of companies where they can negotiate you know better salary scale better wages and i am concerned that you know by giving basic income to absolutely everyone even you know if people have a job even if people have an income above a certain level you know this could be a way to to then you know actually deregulate the the labor market and sort of deconstruct the wage wage earner status so i think you know minimum income is absolutely a central institution that's for sure but you know in any case let me say this you know it will always it will never be very large so you know i am in favor of it but you know basic income you know depending on the proposal it's going to be you know anywhere between 50 percent uh 75 percent of a full-time minimum wage you know that's never okay that's good it's important to have it you know that nobody falls below this level but you know that's not going to be the magic bullet so i think it has to come together with a very ambitious uh welfare set program access to education access of uh also much more egalitarian ways than what we have today it could come with other uh system like you know the the job guarantee uh proposal that was that was pushed uh you know by a number of people including a pavilion recently where you know you can have access to a full-time minimum wage a job that is that is administered by you know local bodies and municipalities and various non-profit organizations and this has to come also in my view in the long run with a minimum inheritance for all you know through redistribution of wealth because which is you know even more ambitious because you know in addition to the minimum income which would be you know maybe 50 percent or 75 percent of full-time minimum wage and job guarantee at the level of minimum wage if you have in addition to that you know minimum returns to all where you know i proposed everybody would have say you know one hundred twenty thousand euros or one hundred fifty thousand dollars you know around sixty percent of average wealth per adult at age twenty five uh you know this this will make a big difference because you know people who have millions or billions maybe don't make the difference between having zero or having one hundred or two hundred thousand euros but in fact you know it makes a huge difference you know remember you know the bottom fifty percent of the population in the u.s you know owns less than one percent of total wealth they own basically nothing out of europe it will be three to four percent okay that's better than one or two percent in the u.s but it's ridiculously small when you don't own anything or when you only have debt negative wealth you know you are in a very weak bargaining position you know vis-a-vis your own life vis-a-vis society in general because this means you know you have to accept anything you have to take any working condition any jobs that you are being proposed anyways because you know you need to pay for your rent you need to pay for your family you cannot you know you whereas if you have 100 200 in you know in addition to the basic income to a job guarantee system then you know you can start to negotiate you can start saying no to certain offers you can start your own business you can start projects you know which you will not there starting otherwise you can bury a little home so that you know you don't need to pay a rent every month you know this makes a more dynamic society a more decentralized society where more people could uh have access to more opportunities and more more more more bargaining power so this is just to say okay basic income is important but you know it will always be relatively small in terms of amount as compared to average income average rules in society so this will never be the magic bullet that's important we need to do it but this has to come with a whole series of more ambitious uh reforms you know to me this is really sort of ground zero of of social social uh social reform and wealth redistribution thank you i've got i'll read you three questions but they all resonate with the same thing there's something rob i need to tell you which is that i have a young age uh uh children at home which with a babysitter which i i'm going to have to to to to go there quite quite soon i'm really sorry in fact i should go there right away so i i mean i can answer another question if you want but okay then the last question and i uh i want to applaud your treatment of the future generations not just the present uh i have two young children as well and i appreciate your your discipline and your focus on them so quickly in a time when elites are becoming more powerful not only economically but politically do you think it's possible to change the institutions that repo produce inequality what incentive do they have and then the second one is you talked about how money and politics is a corrupting factor can you give us a comparative view across different countries and finally a question about the united states while your data tells a story of long-run progress towards equality the period from 1980 the president has seen a retracement in america given the difficulty of near impossibility of amending the u.s constitution where do you see hope look it's true that sometime you know when i look at the us and in particular the the fact that you know money has taken so much control of the political process and and you know the situation in many ways so and french and you know you have so many congressmen you know so-called centrist congressmen in washington from the democratic party or from the republican including from the democratic party who are so you know so financed in a way by you know big money that they don't uh you know their economic views their fiscal views you know are so conservative so sometimes you know i feel uh like everyone you know i feel like i feel that you know that's not going to be easy to change or you know i'm sometimes you know i tend to be more optimistic for europe or other parts of the world sometimes and then for the us but you know at the same time i should say you know we are always surprised by you know electoral mobilization political process in history so something i want to remember is that you know in the in the united states uh you know i remember you know 10 years ago or a bit less than 10 years ago in 2000 back in 2014 you know after the publication of capital in the 21st century i was having a public debate with elizabeth warren in boston and i remember at the time i was pushing for the progressive wealth tax with tax rate up to five up to ten five to ten percent per year for billionaire and i remember elizabeth warren telling me oh you know this is this is too big how can you think about something like that and and then you know uh eight years uh actually you know six years later you know in 2020 elizabeth warren and bernie sanders were competing about who was going to propose the biggest wealth tax with wealth tax rate of up to five to ten percent per year and so you know thing and and most importantly you know there was majority approval if you look at opinion polls you know not only among democrats but also among republicans about the idea of a billionaire tax and you know we should remember that you know every country has a as a complicated and ambitious relation with equality including of course the united states which invented very progressive taxation at the beginning of the 20th century and i think even today you know a large fraction of the population uh feels that you know this is necessary to renew this kind of policy and also you know let's remember that you know elizabeth warren and bernie sanders you know got almost half of the world and actually much more than half of the vote if you look at voters in the primary below 40 in edge so you know it's uh things you know with a different candidate with a different uh you know maybe someone younger maybe someone you know i don't know who's more a diverse origin i don't you know this could uh you know things could change could change so you know i i i am not impressed you know by people who sort of know in advance you know what's going to happen or what's not going to happen and and you know we have to i guess you know the best way to contribute uh wherever we are about this process you know i think is to contribute to this democratization of you know economic knowledge and economic conversations that i was talking about at the at the at the beginning which to me is really a key condition for you know transformation of power relation uh in in general and then you know whatever will happen will happen and you know we cannot predict everything but we have to be ready to contribute to this to this collective process and to this process of democratic change and deliberation okay so we should close here i always use some kind of artistic or music parable that comes to my mind as i'm listening to you talk and i've often thought today of a song called woman of heart mind by joni mitchell because i think you are an economist of heart and mind but the one that really comes through to me is by a man named todd brundgren it's called i saw the light i saw the light excuse me it was late last night i was feeling something wasn't right there was not another soul in sight only you so we walked along though i knew there was something wrong about and a feeling hit me very strong about you then you gazed up at me and the answer was playing to see because i saw the light in your eyes i think that you should tell your children as we get off that my children are going to hear about this discussion on the day when you win the nobel prize in economics because i'm proud to admit you you are shining a light on where we have to go you are our navigator in this profession you are a leader almost without compare other than your other members of your inner circle and i want to thank you for being here today but more importantly for what you're doing for your children my children and everybody with the courage that you demonstrate

Channel: New Economic Thinking

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Id: -pMcIIl2NkU

Length: 65min 12sec (3912 seconds)

Published: Wed Jun 15 2022