Thomas Piketty on the Politics of Equality | Conversations with Tyler

Name: Thomas Piketty on the Politics of Equality | Conversations with Tyler
Uploaded: 2022-04-20T12:27:19.000Z
Duration: 2 h 4 min 39 s

Introduction

In this section, Tyler introduces Thomas Piketty and his new book "A Brief History of Equality".

Tyler's Introduction

Tyler welcomes Thomas Piketty to the show.

Tyler asks how egalitarian France is as a country.

The Movement for More Equality

In this section, Piketty discusses the movement for more equality throughout history and in France specifically.

The Movement for More Equality

There has been a long run movement towards more equality in history.

France is part of this movement.

Each country has its own limitations and hypocrisies with equality and inequality.

There has been an evolution towards more equality through political mobilization and social struggles.

The movement for more equality started at the end of the 18th century with events such as the French Revolution and abolition of aristocratic privileges.

This evolution towards more equality continued during the 19th and 20th centuries with events such as the end of slavery, colonialism, rise of social security, and progressive taxation.

Challenges to Addressing Inequality

In this section, Piketty discusses some challenges that need to be addressed in order to achieve greater equality.

Challenges to Addressing Inequality

There is still a lot of discrimination today such as gender inequality and political inequality.

Enormous concentration of wealth exists today but it has increased less so in France or Europe than in the US in recent decades.

The movement for more equality could and should continue as it is a way to address some of the biggest challenges we face.

Dimensions of Status Competition in Paris

In this section, Tyler asks Piketty about the perception that there are relatively few dimensions of status competition in Paris.

Dimensions of Status Competition in Paris

Outsiders have the impression that there are relatively few dimensions of status competition in Paris compared to cities like New York or Berlin.

There are circumscribed ways to dress and be considered well-dressed in Paris.

Berlin seems to have many more open dimensions of status competition than Paris.

Introduction

In this section, the interviewer asks the interviewee about his thoughts on comparing New York to France and which traditions from the French left he is closest to.

Comparing New York to France

The interviewee is unsure of what metric to use when comparing New York to France.

Traditions from the French Left

The interviewee does not feel close to any of the philosophical or political thought traditions mentioned by the interviewer.

He places himself in the tradition of research in social and economic history, particularly active in France between 1930s and 1980s with people like Brodel.

His work has mostly consisted of trying to collect historical data sources and proposing interpretations of these data sources.

Braudel's Work

In this section, the interviewer asks about Braudel's work and whether there are similarities between his work and that of the interviewee.

Long Structures in History

The interviewer notes that there seems to be something quite conservative about Braudel's argument, referring to long structures stretching through decades or even centuries.

The interviewee agrees that there is a difference between his work and that of people like Braudel because he had to deal a lot with 20th-century data.

He notes that politics is everywhere when studying modern history, unlike previous centuries where one could have a more Marxist or economic perspective stressing long-run deterministic economic forces.

The political dimension is much more important when studying modern history because it cannot be escaped.

Introduction

In this section, the speaker discusses how his perspective differs from that of other historians who have studied data from earlier periods. He explains that he had to develop a different perspective because he writes later than them with data covering the more recent period.

Different Perspective

The speaker's perspective is different from other historians who have studied data from earlier periods.

The speaker stresses the role of politics and political institution and fiscal institution social institution and the like as there is a competing long deray tradition if you look at the work of greg clark and neil cummins on surnames they take data from england.

Heritability of Social Status

In this section, the interviewer asks about a paper by Greg Clark and Neil Cummins on surnames which takes data from England. The paper shows that social status is more heritable than height, with a given status relationship having persistence for 15 or 20 generations. The speaker responds by saying that while this work is interesting, he finds it too conservative in a way.

Heritability of Social Status

The interviewer asks about a paper by Greg Clark and Neil Cummins on surnames which takes data from England.

The paper shows that social status is more heritable than height, with a given status relationship having persistence for 15 or 20 generations.

The speaker finds this work interesting but too conservative in a way.

Movement Towards Equality

In this section, the speaker argues that there has been a movement towards more equality in terms of political rights, social and economic equality over the past two and a half centuries. He stresses that this process is very much related to political development, political revolution, slave revolt wars of independence tax reform changing balance of power between capital and labor development of social security development of a public school system or public health system.

Movement Towards Equality

The speaker argues that there has been a movement towards more equality in terms of political rights, social and economic equality over the past two and a half centuries.

The speaker stresses that this process is very much related to political development, political revolution, slave revolt wars of independence tax reform changing balance of power between capital and labor development of social security development of a public school system or public health system.

Skepticism About Data Sources

In this section, the speaker expresses skepticism about some data sources before the late 18th century. He explains that he finds it difficult to say whether concentration of wealth increased in Europe between 1500 and 1750 because he does not have enough data sources.

Skepticism About Data Sources

The speaker expresses skepticism about some data sources before the late 18th century.

He finds it difficult to say whether concentration of wealth increased in Europe between 1500 and 1750 because he does not have enough data sources.

The Importance of Education in Economic Productivity

In this section, the speaker discusses how education has played a key role in economic productivity and how policies and institutions have contributed to this dynamic.

Education as a Key Explanation for US Economic Leadership

In the 1950s, the US was an educational leader with 90% of a generation going to high school.

Western Europe lagged behind with only 20-30% of a generation attending high school.

The US reached a 90% primary school attendance rate almost a century before Europe.

After World War II, there was an enormous educational push that transformed economic geography and productivity.

Role of Policies and Institutions

Policies and institutions played a major role in the dynamics of economic productivity.

Belief systems and perceptions about education also play a significant role.

Real Estate's Role in Wealth Inequality

This section focuses on whether real estate is the main driver of wealth inequality, particularly at the top end of the distribution.

Real Estate's Importance for Middle-Class Assets

Real estate is important for middle-class assets and explains movements in real estate prices.

Real Estate's Limited Impact on Billionaire Wealth

Real estate is not significant when looking at billionaire wealth.

Aggregate wealth accumulation can be explained by real estate, but it does not explain what happens at the top end of the distribution.

Real Estate and Wealth Inequality

This section discusses the relationship between real estate and wealth inequality.

Real Estate and Middle Class

Real estate is a central explanation for the increase in relative price of real estate assets compared to stock market prices or financial assets.

The middle class owns mostly real estate, while the top owns mostly financial and business assets.

If the only force at play was the big increase in real estate price, wealth inequality should have declined at this top world share should.

Real Estate and Top Share

The argument that real estate explains what we see for wealth distribution is not valid.

There is some disagreement about the magnitude of the increase in top 12 shares but nobody is saying that top 12 shares have been declining in recent decades in any country.

Nobody is saying that real estate is explaining billionaire's wealth.

Welfare, Productivity, and Income

This section discusses welfare, productivity, income, and working hours.

Welfare vs. Productivity

Productivity matters more than income per se when it comes to welfare.

GDP per hour of work is virtually the same in U.S., Germany, France, etc.

Working Hours

The decline in working hours has been bigger in Germany and France than in the U.S. over time.

It makes sense to take some of this increase in productivity to have more vacation time or spend more time with family.

Wealth vs. Happiness

The relationship between wealth and happiness may be diffuse.

It may be better to focus on inequality of well-being instead of wealth inequality.

The Importance of Cultural Capital

In this section, the speaker discusses the importance of cultural capital and how it relates to wealth inequality.

Cultural Capital vs. Wealth Inequality

The speaker argues that cultural capital is important for individuals to have access to fundamental goods.

They suggest that focusing on cultural capital rather than wealth could be more beneficial for individuals.

The speaker believes that access to education is a key factor in achieving equality in cultural capital.

They also mention their work on understanding political cleavages and how they relate to cultural inequality and access to education.

Balancing Access to Education and Wealth Redistribution

The speaker acknowledges that having only high cultural capital may not be enough without wealth.

They emphasize the importance of making access to education more egalitarian while also redistributing wealth, inheritance, and property.

The speaker notes that there has been a movement towards more equality of income labor income through educational expansion and labor rights but highlights the need for greater distribution of wealth.

Inheritance and Equality of Opportunity

In this section, the speaker discusses inheritance and its impact on equality of opportunity. He proposes a solution to redistribute inheritance to increase real opportunities for people.

Inheritance and Equality of Opportunity

The bottom 50% children in France or the US receive nothing at all in inheritance, while the top 10% children receive 60-70% of total inheritance.

Redistributing inheritance is a concrete way to move towards more equality of opportunity, but people often oppose it.

A proposal is made that everybody at age 25 should receive a minimum return, which could be 60% of average wealth. This would be around €120,000 in France today.

People who currently receive zero would receive €120,000 at age 25. Those who currently receive €1 million would still get €600,000 after progressive taxation.

This proposal would increase the share of total inheritance for the bottom 50% from between 2%-4% to around 20%-25%, making a big difference in terms of real opportunity.

Wealth has a significant impact on bargaining power in life. Having even €100 or €200 can put you in a different position than having zero or debt.

Cultural capital and human capital are complementary to financial capital.

Switzerland's Living Standard

In this section, the speaker talks about Switzerland's living standard and why it may not be an ideal model for Europe.

Switzerland's Living Standard

GDP per capita in France would be higher than Switzerland if France were a separate country.

Switzerland's advantage of being a tax haven based on bank secrecy is no longer as significant following 9/11.

Switzerland's Economy

In this section, the speaker discusses Switzerland's economy and compares it to other countries and regions.

Comparing Countries and Regions

The speaker agrees that Switzerland will still be rich even if they give away 10-20% of their wealth to Sweden.

Norway without oil would be more comparable to Sweden in terms of GDP per capita. The speaker believes that the oil should remain in the ground.

The speaker mentions a TV series called "Occupy" where Russia invades Norway to restart oil production in order to make the European Commission happy.

Luxembourg benefits a lot from its location, but Switzerland has a diversified economy.

France is much poorer than Switzerland and cannot bring Swiss prosperity. It is important to compare countries or regions of comparable size.

Freedom, Education, and Welfare State

In this section, the speaker talks about freedom, education systems, welfare states, and how they relate to prosperity.

Learning from Different Experiments

There are many good things in freedom such as local democratic systems and education systems.

There is a lot to learn from each country's experiment. For example, the US has historically made enormous educational advances that are key to understanding many issues today.

Norway shows that you can have a generous welfare state without preventing prosperity.

Tax-to-GDP Ratio

If having a small government was enough for becoming rich then Bulgaria and Romania would be richer than Denmark and Sweden. It depends on what you do with your tax revenue.

Using tax revenue well is complementary to high prosperity.

Anonymous Rules

In this section, the speaker talks about anonymous rules and how they relate to government handing out status and wealth redistribution.

Trusting Governments

The speaker believes in anonymous rules because governments under certain conditions have been able to develop public education systems, public health systems, and tax administration following anonymous rules which have been working pretty well.

Deciding on an individual basis who is honorable or not honorable is a very different kind of business.

Corruption in Government and Private Companies

The speaker discusses corruption in government and private companies in various countries, including France, Germany, and the United States.

Corruption in Various Countries

Corruption exists in most countries, with people and companies receiving privileges due to tariffs and policies.

Corruption exists in both government and private companies. It is higher in France and America than Sweden.

Schroeder was put on the board of Gazprom after joining the private sector. This is an example of how bad incentives come from the private sector rather than the public sector.

Reparations for Haiti

The speaker argues that France should pay reparations to Haiti for a debt incurred during its independence.

History of Debt

In 1825, when Haiti became independent, France recognized its independence only if it paid a huge amount of money equivalent to 300% of its GDP at that time.

French bankers refinanced the debt until 1957. Haiti effectively repaid an enormous public debt over almost a century and a half to compensate French slave owners for their loss of property.

Reparations Today

The speaker argues that it is impossible to say today that reparations are too old because there are still reparations being made today for expropriation and injustices during World War II or even World War I.

Strict monitoring is necessary whenever there is a transfer for reparation or development aid to prevent individuals from getting rich or increasing wealth inequality.

Reparations and Justice

In this section, the speaker discusses the complexity of reparations and justice. He argues that while these issues are complicated, abandoning attempts for justice is not a solution.

Reparations are never simple

The speaker acknowledges that reparations are complex.

He cites examples from his country and the US to illustrate how long it can take to address past injustices.

Despite the challenges, he argues that abandoning attempts for justice is not a solution.

Developing a universal approach to justice

The speaker suggests developing a universal approach to justice based on objective criteria such as income distribution, wealth distribution, and access to education.

Democratizing Europe

In this section, the speaker discusses his involvement in writing a manifesto for the democratization of Europe. He argues for concrete changes in the treaties that organize the European Union to bring more social and fiscal justice.

Proposals for democratizing Europe

The speaker has been involved in writing a manifesto for democratizing Europe with a large group of scholars from all over Europe.

They have proposed concrete changes in the treaties that organize the European Union to improve its working.

The speaker advocates for federalism as a means of delivering more social justice and popular support to Europe.

Redistributing wealth through taxation

The speaker proposes making majority rule decision-making over taxation possible by eliminating veto power held by individual countries.

This would allow for greater redistribution of wealth through taxation across all member states.

Fiscal and Budgetary Matters

Yanis Varoufakis discusses the need for a majority rule decision-making process in Europe, rather than one based on country against country. He proposes a European assembly where members of national parliament will come together to vote over budgetary decisions.

Democratization of Europe

Proposes a European assembly where members of national parliament will come and be in front of each other.

Members will be there in proportion to the population of each country and in proportion to the size of each political group in each country.

National parliaments have veto power on all budgetary and fiscal decisions.

Suggests putting these national parliaments members together one week per month in the European assembly to vote over budgetary decisions.

Immigration and Wealth Inequality

Yanis Varoufakis discusses his views on immigration, open borders, control of capital flows, taxation, labor flows, and wealth inequality.

Migration and Open Borders

In favor of more migration and more open borders.

Believes it's important to address both issues together: opening labor flows without changing the regulation of capital and waste taxation is not enough.

Control of Capital Flows

No fiscal coordination about corporate taxation or capital taxation.

Completely free capital flows.

Labor Flows

Strong restrictions on labor flows.

Redistribution of Wealth and Income

In this section, the speaker discusses the need for a fair solution that involves redistribution of wealth and income in both the north and south.

Need for Fair Solution

The speaker believes that a fair solution requires redistribution of wealth and income.

The interviewer asks about Michelle Hulbeck's submission, to which the speaker responds that it is too nihilistic for him.

The speaker compares Hulbeck's work to Celine's Voyage, which he finds incredibly realistic but also desperate about the world.

The speaker believes that institutions, not people, hold the promise for making the world better. He thinks human beings are basically good but institutions are not always at their level.

Building Better Institutions

The speaker is trying to contribute to a collective process of learning from history on how to build better institutions for a better world.

Thomas thanks the speaker for his time and introduces his new book "A Brief History of Thank Equality."