Interview with economist Thomas Piketty: capital and ideology I FT

The bestselling French economist Thomas Piketty talks to the FT's European economics commentator Martin Sandbu about ideology, capital, and how to make societies fairer with taxes on wealth and inheritance. Read more at on.ft.com/39kcNWa. See if you get the FT for free as a student (ft.com/schoolsarefree) or start a £1 trial: subs.ft.com/spa3_trial?segmen...
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[@FinancialTimes]

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[@ChienyuShen]

“If we don’t do this kind of departure from the current organization of globalization then you end up with nativist parties who are going to propose another kind of departure, which is ... to be very tough with migrants. Because that’s easier than being tough with Google, or with rich people.”

[@harryedwards851]

I look forward to the financial times trying it's best to ignore these ideas over the next 12months

[@anchorpoint5871]

how could they? they cant preach against their own church...

[@lacalleinvisible]

Edward Snowden, such a great interviewer

[@nancyhirsch7768]

That's not Snowden, although he would probably be a great interviewer.

[@josepaz4327]

🤣 🤣 🤣 🤣 True true

[@JanSanono]

Ignacio Ladrón de Guevara lmao I was thinking the same thing

[@mfst100]

I love how he speaks French in English.

[@rp3875]

Loved the book...very interesting analysis of social organization over times and cultures.

[@danieldonaldson8634]

Must have been hard for the FT to find a staff member to talk to Piketty who wouldn't piss themselves with fear once he starts explaining his ideas. Using a dark couch was a good idea. Also notice he's sitting over the split between the couch bits.

[@jaytsecan]

I don't think Thomas Piketty is going to be invited to Davos (World Economic Forum) anytime soon. (Though I'd love to see it)

[@anchorpoint5871]

the level of inequality in the US is probably higher than in any other society at any time in the past anywhere in the world " thomas piketty

[@freddiegilbey9150]

Although he's talking about inequality of income from labour rather than wealth

[@margrettaylor2228]

In his book he dose talk about generational wealth

[@muskduh]

thanks for the video

[@julianjazz7296]

We owe Piketty so much. Imagine if his ideas get any fruition. Our world would be 1000x better for all.

[@mikahundin]

In the interview with economist Thomas Piketty, he discusses his new book "Capital and Ideology" and provides insights on various topics. Here are the main points he made, attributed to him: 1. Broadening the scope: Piketty mentions that unlike his previous book, which focused mainly on Western countries, his new book takes a much broader comparative and international perspective, looking at countries like India, Brazil, South Africa, China, and Latin America. 2. Ideology and political mobilization: Piketty argues that the main driving force behind the transformation of inequality structures over time is not violent destructions through war or economic deterministic forces, but rather changing ideologies and political mobilization about inequality. 3. Historical examples: He provides examples of countries that have significantly changed their structure of inequality, such as Sweden, which transitioned from a highly unequal society in terms of voting rights to a very egalitarian one, and India, which implemented positive discrimination to reverse strong inequalities toward lower castes. 4. Global reach of ideas: Piketty notes that sometimes there is a very quick diffusion of ideas, such as the rise of progressive taxation of income and wealth around World War One and in the interwar period, while other ideas remain idiosyncratic to different countries. 5. Role of elites: He points out that elites sometimes instrumentalize their own national history to preserve their interests, which is a function of ideology as he describes it. 6. Lasting change through ideas: Piketty suggests that when ideas change, it leads to more lasting changes in inequality regimes, citing the example of Germany's co-management system, where workers have rights in the board of companies. 7. State of play in terms of ideology: Piketty believes that we are living in a time of great uncertainty, as the ideology of globalization and financial deregulation that developed in the 1980s is now in crisis, leading to two possible reactions: limiting competition from foreign workers or regulating the circulation of people and capital more. 8. Wealth tax proposal: Piketty proposes a wealth tax with rates going up to 90% for exceptional wealth, which has been done in the past (e.g., after World War Two in Germany and Japan) to reduce large public debt and invest in public infrastructure and education. 9. Counterargument to wealth tax: Addressing concerns that his wealth tax proposal might remove incentives for accumulation, Piketty questions why some people should inherit significantly more than others and argues that the monarchical view of modern economies and corporations is at odds with reality. 10. International wealth tax: Piketty has previously advocated for an international wealth tax but acknowledges that it might be possible for a single country to pursue steep wealth taxation if they rethink the way they organize the movement of capital and capital controls.

[@heathflagtvedt5769]

A lot of people commenting here that Piketty's calls for action are undesirable and communist. What makes him significant, and thus interviewed on the grand stage of international discussion, is not his prescription for repair, but his coherent presentation and understanding of the problem. Income inequality destroys societies. Always. I don't think he has the fix and it is unrealistic to expect him to. He does present the history and context of the problem better than anyone, recently if not ever. Wealth tax may be bad policy. But we are hurtling toward a dark end. We need an innovative approach to an old problem, and that starts with a comprehensive understanding of the problem in its current state. Picketty is step one. The easy part, relatively speaking, but still important. Andrew Yang's proposal only seems crazy if you cannot wrap your head around Picketty's statement of the problem. It is seems desperate, but our situation IS desperate.

[@RWin-fp5jn]

What makes him significant is that governments everywhere are tending to ever less free and less democratic societies. Buy promoting income inequality as the main problem, communists provide for themselves a reason d'être to form big and powerful governments that can 'punish' and expropriate wealth form the public, all for the greater good firstly amongst their own ranks (the EU members of parliament have extraordinary incomes and pay close to no taxes) and secondly for the poor and impoverished ones (who they actually despise, in the fashion of Trotsky and Lenin). Communism has led to the inherent death of hundreds of millions of civilians in the 20th century. We should learn our lesson, read the invisable hand of Adam Smith if needed, but in stead we give way too much credits to such weak charlatans as Piketty...

[@meegz149]

​@@RWin-fp5jn I thought anyone who would watch the FT times would be more intelligent than your average reactionary uncle on facebook but I was wrong. I think what you're saying is that "w-well the Bolsheviks made the rich out to be the bad guys" The fact of the matter is Piketty is talking about restoring the so called managed capitalism that was known as the "golden age of capitalism". A period where countries from France to Japan have some nomenclature to describe their "economic miracles". All of these countries and the United States had strong government intervention, particularly Japan, and exceptionally so in South Korea. The fact that you would compare many of these strongly anti-communist countries with communism can not be explained with mere stupidity but a blatant hatred of reality. I recommend looking up the Spartacist uprising. Social democrats are no friends of communist. Also, communism killed infinity billion people.

[@RWin-fp5jn]

​@@meegz149 My, my, what a feisty little temper thou art. How is it that the extreme left doesn't tolerate alternative opinions. It is amazing this attitude comes from people who never once had decent jobs in the private sector. I bet you are getting paid from my tax dollars as well. Good for you..In the old days you would be called 'useful idiots' by the higher comrades...but nowadays the term useful not even applies I am afraid. Nevertheless, I am afraid you you will win as we appear to head towards dictatorial communism once more both in Europe and the US...

[@meegz149]

@@RWin-fp5jn hahahahahhahaha. Talk about projection. I push back against your claims, and rather then defend them you say we don't a diversity of opinions. LMAO! Even worse, you throw out ad hominems. So much for the battle of ideas!

[@johnetro8806]

@@meegz149 R. win is probably a right wing boomer crankster (since all he can do is spit ad hominem in vitriol) who doesn’t realize he grew up in one of the most economically unique periods of history. Which piketty outlines in the documentary and last book, but is too dumb to understand.

[@wille5263]

This man could ramble on for ages and I love it

[@jappiejojo777]

I don’t like Piketty’s socialist ideas at all, but I’ll give him this: he’s a real original thinker and he brings a lot of arguments forward we’ve neglected for far too long.

[@thomaswikstrand8397]

You don't like socialism because you've been exposed to propaganda your whole life. It's that - or barbarism.

[@bouffezlegumes8611]

Love to see another documentary made from from his new book

[@barmariosky]

One of the best economists, perfect analysis.

[@ludwigweihs493]

Why you guys oppose his ideas ? I mean some good base of it, is also that the potential of applied capital is minimized by confinement to very few human decisionary channels. Even Keynes says only active markets can act to their best. If you put more people at least at range of enabling them to positively contribute to human purposes you have to give them at least access to capital channeling. Leaving aside the taxation topic in general his analysis is correct. Everybody could be richer - so to say - if the distribution would be more leading to overall wealth effectiveness. ! Of course the ideologies behind are important, capital should also be there to defend values that i consider "our" values - the danger behind it all is that too static economic systematics press useful improvement into the state of inferiority for the sake of personal indifferent greed due to distance to moral commitment. ....

[@mimifofeti]

Que sotaque forte Jesus

[@alloomis1635]

we think, or we like to think we think, as individuals, but societies evolve in response to daily inputs within and without the nation. national planning is always pointed towards keeping rulers in power, and wealthy. naked greed drives from the top. this evolution is driving us over a climate precipice which will certainly create great unrest, and there is a possibility of extinction. so it's time for intellectual input in the management of society, pointed towards survival. this means socialism, and would be done best under democracy. neither is blossoming yet, and if/when they show up, it may be too late.

[@usaball9190]

Extinction? Surely we can imagine a dystopia where the rich are belly-filled with gold and the poor slave working class, but as long as innovations through the use of AI are achieved, then we as a human race shouldn’t be extinct. Even if the system we live under are horrendous.

[@margrettaylor2228]

If we don't fix the climate we will be extant by our own doing.

[@BarryHawk]

The Germans, ahead of everyone as usual.

[@punchgod]

He’s French

[@elli2819]

@@punchgod he is talking about co-management

[@yinghanfu9047]

a 40% exit tax? I'm sure billionaires will wait until the legislation.

[@margrettaylor2228]

It's a great idea

[@felicicorpus8434]

my essay in English tackles the issue of "taxing the rich to help the poor". I argue that this promotes inequality, thank you, sir, for your valuable insight.

[@JR7noir]

Hahahahahaha

[@ba1anse]

"taxing the rich to help the poor" promotes inequality? are you insane?

[@felicicorpus8434]

@@ba1anse Not insane. Just sarcastic 😂. You are free to think and argue something you can defend. First of all that’s an essay so you have to argue why taxing the rich to help the poor promotes inequality and the counter argument of why it doesn’t. I hope you understand that. If not, read Michael Sandel’s “Justice: What’s the right thing to do”, from the title itself, YES, you also have to defend that your argument and counter argument serves justice for both parties.

[@jonahmarlow3991]

I think was i not expecting him to be french

[@jibjub2121]

if I had a euro for every communist strawman in the comments, I'd be facing a wealth tax

[@user-sl6gn1ss8p]

hopefully you would

[@dawnglianapachuau6433]

Toma Piketty

[@alanllew]

Le jacket. Je le comprends pas du tout, monsieur!

[@henrijose1]

C'est quoi un JACKET???

[@pan_vladek7113]

Это уже можно назвать неомарксизмом?

[@ronaldoanthonyquintasoto9214]

alguien tiene el libro en español?

[@daviddelgado2963]

Yo. Es bueno e interesante, pero toma tiempo leerlo. No hay frase que no importe, así que siempre tengo a la mano un cuaderno y el computador para tomar notas.

[@matthewbrooker]

Martin Sandbu/ Edward Snowden? Uncanny.

[@schumanhuman]

Stiglitz and others have tried telling Piketty considering almost all of the increase in wealth inequality post IN HIS OWN DATA comes from housing aka land values, a land value tax is the most sensible and viable method of addressing the problem. Here he is still peddling the same nonsense.

[@bernges7228]

Did you even read the paper? Stiglitz and Piketty both agree that inequality is policy-driven

[@schumanhuman]

@@bernges7228 And so what? You need the right policies to correct it. Piketty completely misses the massive potential of a land value tax which can be implemented by any country without the common tax policy integration he stresses as necessary. There is no possible laffer curve with a land value tax at or below 100% of the full rental value of land. A wealth tax however can clearly create capital flight, so accepting this flaw Piketty argues for tax integration to overcome this objection. Which will clearly never happen, so he creates his own obstacle. Interesting that France had a wealth tax but because it was ineffective at collecting revenue they amended it to a real estate tax. Land cannot move, so taxing it is easy.

[@bernges7228]

@@schumanhuman I mean he's made the same point in the last 2 chapters of Capital in the 21st Century. A capital tax needs international cooperation and clearly there is an incentive for countries to deviate. But I wouldn't necessarily say it's impossible. We have plenty of precedence for multilateral agreements. Incidentally the mobility of capital is what makes outsourcing so attractive. But obviously limiting mobility politically would disincentivize investment. Quite the quandary indeed. The land tax isn't obvious either though. We used to have a wealth tax in Germany until 1995 when our Constitutional Court declared it naught because the evaluation of land and real estate ownership was deemed too imprecise. So there you go with the loophole

[@schumanhuman]

@@bernges7228 'A capital tax needs international cooperation and clearly there is an incentive for countries to deviate.' Yes which is my first point as to why it won't happen. The other point is a tax on capital is not necessary or even useful. Capital (capital goods) depreciate, taxing them makes the creation of them less likely by hitting margins. As for financial 'capital', a large amount of that is actually land value transformed by the banks into mortgage interest, and held by stock holders in reits and CDO's of mortgage debt etc. When banks lend to real estate it's the land value which increases as a positive feedback loop. When 2008 happened it was because of a bursting land bubble not because the bricks and mortar became more expensive, the next crash will almost certainly be around 2026/7 btw. www.exponentialinvestor.com/technology/boom-times-are-here-again/ Almost every economy on the planet has a real estate tax. Ask any assessor and they will tell you the land value is in most cases far easier to assess than the building value, most assessors put a +/- 10% on assessments so yes we can have a land value tax. The only reasons land taxes have ever been rescinded has been due to political pressure and/or under funding of assessment processes, if it were the main tax it would be easy to fix. Berlin now has some of the highest house price inflation in the West, Germany needs a land value tax too. According to a paper I just googled Germany cancelled their Wealth tax because 'This verdict was justified by the non-updated standard values for real estate properties, which led to a different valuation of immoveable property compared to other assets taxed at their market values.' In other words it was a poorly designed real estate tax which led to the repeal, not a (regularly assessed) land value tax. So let's not compare apples with oranges.

[@bernges7228]

@@schumanhuman Interesting. I'd need to look some stuff up though cause I didn't get to study taxation of land specifically. What's your take on a financial transaction tax like the one Bernie Sanders proposes?

[@jim7771]

It says a lot that this guy is by far the number one on his side of the argument, and yet all of his figures, which were the basis of his argument, were completely wrong, and didn’t support his argument at all when actually done properly. To support him therefore required blind ideology, as even his own data doesn’t do it empirically.

[@xordid]

To say they were "completely wrong" is quite misrepresentative of the issues present in Piketty's work. There's ample evidence that the overarching argument of rising wealth inequality is very widely demonstrated and accepted by economic experts at this point, and the only thing left to quibble about is the precise degree.

[@Andy-em8xt]

@@xordid The poor have done the best under capitalism. They live better than the kings of old. Everyone's wealth and income has gone up, just some have gone up more quickly than others

[@antonysmyth2464]

JN, I note you cite no examples, so all you give is opinion, if you lack a basis for your claims, then be honest and say so before accusing others please.

[@leet5357]

Andy yeah right according to Prager U medieval peasants worked a fraction of the hours we do. Wealth and income mean nothing if you don’t have the ability to enjoy it because it all goes on housing and health care. Measuring societal improvement by money is one of the greatest mistakes of the human race.

[@LewdConnoisseur]

@@Andy-em8xt they can barely get by when live paycheck by paycheck these days. Capitalism is in its dying stage.

[@RuzgarCatalMD]

Whaz a zerrible anglish mösyööööö 😅🐎🤣👳🏻

[@harleywoolford5247]

90% taxes working is hard to believe

[@harleywoolford5247]

@@zz19991 highly doubt there wouldn't be massive tax avoidance as a consequence

[@matze1849]

it worked very good from 1930 to 1980, albeit it was "only" 81%. keep in mind that this is only applied to the very top end.

[@harleywoolford5247]

Matze whether people actually paid those taxes is another matter

[@harleywoolford5247]

Mark Johhson some of these left wing economists are never honest about the effective rate

[@Guizambaldi]

It's 90% top marginal tax rate, not 90% overall.

[@jeanlouisgold6473]

Pieketty talks about wealth like the wealth is already created by god and he looks for the way we must share equally for everyone. Fuuny this economist if he is one . But he doesn't say anything about how to create wealth.

[@ba1anse]

god it's hard to understand him with his thick french accent

[@jibjub2121]

not really

[@brianmoran1196]

He seems to underestimate the Pareto distribution of Human capabilities, its incredibly unfair but unfortunately true.

[@freddiegilbey9150]

How so? He's just saying inequality of capability and inequality of capital aren't aligned, by giving every citizen 125 grand he'd be allowing exceptional people living in poverty through no fault of their own to do something spectacular

[@TM-hm8ep]

Corruption is the problem not system.

[@matthewdelaney3466]

Picketty doesn’t know what MMT is. Capital makes no mention of it. It’s hard to trust his methodology after such a glaring omission.

[@julianjazz7296]

Please explain.

[@oliverbristow7379]

We need a radical new wealth tax like we need a hole in the head.

[@Dear_Mr._Isaiah_Deringer]

That can be arranged.

[@oliverbristow7379]

@@Dear_Mr._Isaiah_Deringer Advocating murder as well as theft? Clearly you have the moral high ground sir.

[@matthewbrooker]

How can a statist Frenchman be taken so seriously by the FT? Frightening😳

[@adrien5834]

Maybe they're smarter than you

[@adrien5834]

@Evardo Gomes C'est quoi cette insulte de gamin? Pauvre minable.

[@JR7noir]

I love the capital. Come, you french, and take my money. Try it, fascist. Go on with your warnings.

[@JR7noir]

@Mark Johhson nope. I didn't say that. The fascism can fascism can evolve, it can take any form.

[@JR7noir]

@Mark Johhson sos un pelotudo barbaro.

[@WhoElseButMeNumbaOne]

Change your name to the Communist Times. Has a better ring to it I think.

[@AmericaFirstRifleman]

So can you tell me why three thousand people having more wealth than 5 billion people is the right thing to do

[@jazilzaim]

@@AmericaFirstRifleman Well can you tell me why Americans earn more than average people in Africa? Should Americans donate more money to redistribute to these countries? This is the right thing since they competed globally and did the right thing by building efficient businesses. They provided value to others by building products or services that people admire. So they are rewarded with wealth for the risks they took. They also employ thousands of people who would be thankful for them since these people give them economic opportunity.

[@omarkn4371]

@@jazilzaim this is the fairy tale of today's speculative capitalism, not much value is produced compared to unproductive profits through finance speculative capital. = we need wealth taxation for many reasons, esp. for 1 reason - listen to his arguments.

[@Andy-em8xt]

@@AmericaFirstRifleman The poorest 5 billion people do not live in capitalist countries. If they did they wouldn't be poor

[@AmericaFirstRifleman]

@@Andy-em8xt good point sir

[@mattcrouch9348]

Lol he has a funny accent he's probably wrong about everything. Trump 2036!!!!

[@mrhogey6062]

Yeah looking at the French economy... we should never listen to them

[@NuukneinMapping]

France doesn't follow Picketty's policies... If an economist is american, he doesn't automatically follow US economic policies

[@johnetro8806]

@@NuukneinMapping to extend on that pikkety just outlined problems really well. His solutions would be hard to implement. It would require global cooperation. I’m personally of the belief we will all blow ourselves up before.

[@davisoaresalves5179]

His English is almost impossible to understand.

[@adrien5834]

Learn French

[@davisoaresalves5179]

@@adrien5834 I speak it too

[@adrien5834]

@@davisoaresalves5179 Ah. Well, maybe they should have conducted the interview in French

[@280nosler]

Calling this guy an economist is a stretch. What he is talking about is communism. Innovation, wages, and productivity will nosedive. See Venezuela.

[@antonysmyth2464]

Christopher - I guess you did not listen, he spoke in favour of enabling people to get richer.

[@280nosler]

@@antonysmyth2464 I'm not sure what interview you watched. At 10:52, he specifically talks about needing to increase the taxes, making it more progressive. Then at 11:14 he talks about implementing a severe wealth tax. He even hints at the shortfalls of the failed French wealth tax, and the need to implement "exit tax" (which the US already has) at 40%.

[@280nosler]

@@antonysmyth2464 Piketty suggest at 12:20 imposing wealth tax to redistribute wealth to the youth. "At age 25, the tax would fund a transfer of 120,000 Euros....". He is arguing for the redistibution of wealth to fight inequity. He even says "if somebody owns 90% of (indistinguishable), and you tax them at 90%, he still owns 10%".

[@portpass1974]

Progressive taxation isn't "communism" - or what is happening in Venezuela. And however thinks it is has no clue in the world what they're talking about. There were (and continue to be) democracies throughout the western world who have high taxes and government spending, and they aren't communist dictatorships.

[@280nosler]

@@portpass1974 confiscatory taxation, such as he has presented is absolutely communism. When you tax earnings at 75% and suggest a high rate wealth tax (Piketty suggested upwards of 90%), it takes no time before you are fully dependant on government, aka communism. Say you make $40,000 a year, and you have $20,00 saved. If your income is taxed at 60%, and your wealth is taxed at 75% (both lower than Piketty suggest), and you spend nothing, it would look like this: $40,000-24,000=16,000 (added wealth) $16,000+20,000=36,000-27,000=9,000. Year 2 40,000-24,000=16,000 16,000+9,000=25,000-18,750 =6,250 You see, even with rates lower than Piketty is suggesting, and not spending a penny, your wealth simply evaporated over time. Ultimately you hit zero, and that is Communism, which is defined as government ownership and disbursement of everything.