Thomas Piketty Quotes

Let it be said at once: Trump’s victory is primarily due to the explosion in economic and geographic inequality in the United States over several decades and the inability of successive governments to deal with this.

Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present). ... The inequality r > g in one sense implies that the past tends to devour the future: wealth originating in the past automatically grows more rapidly, even without labor, than wealth stemming from work, which can be saved. Almost inevitably, this tends to give lasting disproportionate importance to inequalities created in the past, and therefore to inheritance.

We know something about billionaire consumption, but it is hard to measure some of it. Some billionaires are consuming politicians, others consume reporters, and some consume academics.

The overall importance of capital today, as noted, is not very different from what it was in the eighteenth century. Only its form has changed: capital was once mainly land but is now industrial, financial, and real estate. We also know that the concentration of wealth remains high, although it is noticeably less extreme than it was a century ago. The poorest half of the population still owns nothing, but there is now a patrimonial middle class that owns between a middle and a third of total wealth, and the wealthiest ten percent now own only-two thirds of what there is to own rather than nine-tenths.

How do wealth- and capital-output ratios evolve in the long run, and why? Until recently it was difficult to properly address this question, for one simple reason: national accounts were mostly about flows, not stocks. Economists had at their disposal a large body of historical series on flows of output, income and consumption – but limited data on stocks of assets and liabilities. When needed, for example for growth accounting exercises, estimates of capital stocks were typically obtained by cumulating past flows of saving and investment. This is fine for some purposes, but severely limits the set of questions one can ask.

Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in.

Ceta, the EU-Canada free trade deal, should be rejected. It is a treaty which belongs to another age. This strictly commercial treaty contains absolutely no restrictive measures concerning fiscal or climate issues. It does, however, contain a considerable reference to the “protection of investors”. This enables multinationals to sue states under private arbitration courts, bypassing the public tribunals available to one and all. The legal supervision proposed is clearly inadequate, in particular concerning the key question of the remuneration of the arbitrators-cum-referees and will lead to all sorts of abuses. At the very time when American legal imperialism is gaining in strength and imposing its rules and its dues on our companies, this decline in public justice is an aberration. The priority, on the contrary, should be the construction of strong public authorities, with the creation of a prosecutor, including a European state prosecutor, capable of enforcing their decisions.

When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.

There should be no more signing of international agreements that reduce customs duties and other commercial barriers without including quantified and binding measures to combat fiscal and climate dumping in those same treaties.

I can now present the first fundamental law of capitalism, which links the capital stock to the flow of income from capital. The capital/income ratio β is related in a simple way to the share of income from capital in national income, denoted α. The formula is

In many ways, the US led the world toward the development of progressive taxation and the reduction of inequality at the global level during the first half of the 20th century... Unfortunately, one century later, in 2019, the rise of inequality creates new threats to liberal democracies. It is time to take a new step and to develop new policy instruments, in line with the challenges raised by global wealth trends.

Capital is defined as the sum total of nonhuman assets that can be owned and exchanged on some market.

It is time to change the political discourse on globalization: trade is a good thing, but fair and sustainable development also demands public services, infrastructure, health and education systems. In turn, these themselves demand fair taxation systems. If we fail to deliver these, Trumpism will prevail.

Democracy will never be supplanted by a republic of experts – and that is a very good thing.

Broadly speaking, the rise of the supermanager is largely an Anglo-Saxon phenomenon.