A fire-breathing Marxist, he is not.
French economist Thomas Piketty, whose 700-page bestseller helped rocket income inequality into world debate, was self-effacing and often joking in a final appearance Thursday at UC San Diego.In fact, he told 800 people at Mandeville Auditorium, “Nothing bothers me particularly about inequality.”
The problem is extreme inequality, stressed the man dubbed the “modern Marx.” His point, backed by a vast trove of historical data, is that such inequity has toxic consequences for economies and democracies.
“People at the top try to justify themselves,” said the “rock star” professor at the Paris School of Economics. “They never say: I’m very rich and they’re poor — too bad for them.”
Historical data have persuaded him that “job creation” and “performance incentives” don’t justify $10 million executive salaries. He suggested $1 million achieves the same result.
“Pure ideology” accounts for extremely high pay, he said. “It’s just crazy.”
- See: “Capital in the Twenty-First Century” author Piketty on “The Colbert Report”
- Search: The World Top Incomes Database at Paris School of Economics
Rather than stand behind a lectern for a formal talk in the Helen Edison Lecture Series event, following a daylong symposium, Piketty relaxed in a chair.
Anyone looking for a leader to storm the Bastille along with Bernie Sanders would be disappointed in Piketty, 44, who calls himself a social scientist. He spoke for nearly 90 minutes with professorial excitement but not political rage.Dozens lined up to ask him questions Thursday night, but time allowed for only five. “I guess I should be shorter with my answers,” he said.
Much of his talk was a history lesson — how “market forces” didn’t lead to the concentration of wealth at the top but political changes did. How Europe once held the title for extreme wealth inequality but America now owns that crown. How property taxes have been charged for 200 years, but should give way to a different system now.
“Different policies can make a difference,” he said, such as wider access to higher education. “Your institutions make a difference. They can change any time.”
When the top marginal income-tax rate averaged 82 percent between 1930 and 1980, he said, “apparently it didn’t destroy American capitalism. If anything, the productivity growth rates were higher.”
He also touched on current events.
Asked why the poor don’t vote the rich out of power, Piketty said extreme inequality leads to extremes in politics, and “the rich have a very strong influence on the political process.”
Leaders seeking to justify their far greater wealth “find other people to blame. … You can always find countries to blame for your problems,” such as China, he said. “In France, we like to blame Germany. … Racism is equivalent to nativism in Europe — a way to deal with inequality.”
So what’s his cure?He offered no magic bullet for extreme inequality. But he suggests progressive taxation, “social assistance,” a higher minimum wage, labor unions and a “much more inclusive investment in education.” He also mentioned changes in compensation policies and “participatory finance.”
Under pressure from his 2013 opus “Capital in the Twenty-First Century” (2.2 million copies sold worldwide), some countries are sharing more income and tax data, he said. But much is yet to be learned about inequality here and abroad.
“Why is Brazil not in the database?” he said he is asked. China jails one or two billionaires cheating on income taxes but shares no information on what it collects. Such countries — even the United States to a lesser extent — “don’t want [you] to see that the tax system isn’t working very well,” he said. “Data is helpful to fight corruption.”
Piketty even took a shot at academia — “Universities don’t want that much transparency on admissions.”
Although “Capital” is credited for turbocharging the inequality debate, its success doesn’t mean he’s done with the discussion.
“I have to write some more books,” he said. “This is just an introduction.”
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