, Thomas Piketty says don’t blame foreign workers, Saubio Making Wealth

Thomas Piketty says don’t blame foreign workers

Thomas PikettyImage copyright Reuters

Economist Thomas Piketty’s last book, Capital in the Twenty First Century, took the publishing world by surprise when it stormed to the top of the bestsellers list.

Despite containing a multitude of data and equations, the professor sold 2.5 million copies.

His central argument was that invested capital – in the stock market, in property – will grow faster than income. The solution, then, to inequality was to look at ways to redistribute this wealth and influence. Unsurprisingly, it divided opinion.

Now he’s back with an updated tome, Capital and Ideology, which comes in at a hefty 1,150 pages. At the heart of it is the idea of “participatory socialism”.

Mr Piketty advocates income and property taxes of up to 90%, a “public inheritance” of £100,000 for every 25-year-old and caps on shareholders’ influence.

He essentially argues that governments are focusing on limiting the movement of people rather than capital flows in answer to concerns about inequality – saying it is easier to “blame foreign workers” rather than try to deliver a more “complicated” message.

But this approach, he warns, could risk a further break-up of the EU.

Exit risk

In an interview for the BBC Radio 4 Today programme, he warned: “There is a tendency within the EU to say that Brexit is all because of these crazy British nationalists… I’m not so convinced.”

He says that if the bloc doesn’t take a closer look at the way it is organised, tackle social policy and taxation, “we’ll risk another Brexit”. He fears Italy could be the next to depart.

But are people willing to entertain such radical change? I put it to him that, given the victory of the Conservatives over Jeremy Corbyn’s Labour party in the December general election, some of those that his ideas should help the most had emphatically rejected them at the ballot box.

He conceded this was an issue, but said he hoped that the ideas of the likes of Bernie Sanders, who advocates a wealth tax, might mobilise the poorest to vote in the forthcoming US presidential elections.

Ultimately, however, he conceded that it might take another financial crisis for his ideas to be more widely embraced in the mainstream.

And given the method used to enable recovery from the last one, the boosting of balance sheets via quantitative easing, he fears another crash is inevitable. But when that might happen is another question.



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