Thomas Piketty

Thomas Piketty is a French economist known most for his work on wealth inequalities and capital in the 21st century. He was awarded a PhD from LSE for his thesis on wealth redistribution. He is a professor of economics at L’École Des Hautes Études en Sciences Sociales (School of Advanced Studies in the Social Sciences) and is the founding director and associate chair of the Paris School of Economics. During his early years, he won the prize for best young economist in France and later won the Yrjö Jahnsson Award.

He specializes in the history of wealth distribution and economic inequalities, and the relation of capital accumulation to economic growth. He is influenced by Adam Smith, Tony Atkinson, Simon Kuznets, and John Maynard Keynes. His work extends beyond academia; in the past, he served as an economic advisor for several English and French labor and socialist parties. He advised former Labor Party Leader Ed Miliband that increasing tax rates above 50% for earnings over £1 million could be done without impacting the economy. He was also in charge of the Fiscal Stability Treaty (TSCG) of the EU while working on Benoit Hamon’s campaign team.

One of his most academically impactful achievements is the creation, along with others, of the World Inequality Database (WID), an open-access website that includes data series on income inequality for more than 100 countries that span across most of the 20th and 21st centuries and aims to cover all countries. WID currently serves as a primary resource for data as well as a new set of research tools for income and wealth research. WID is hosted by the World Inequality Lab, where Piketty also serves as co-director.

He is the author of Capital in the Twenty-First Century (2013), Capital and Ideology (2020), and A Brief History of Equality (2022). His best-selling 2013 book “Capital in the Twenty-First Century” concentrates on wealth and income inequality that has existed in Europe and the US over the past 250 years. One reason for the success of his book was the fact that he expanded earlier attempts to study inequality and wealth. He makes use of Simon Kuznets’ approach, which was the first attempt to analyze inequality on such a large scale, but in a much expansive sense in terms of spatial and temporal constraints by including a larger range of countries. He also expanded an already-developed series of national income data while also including in new countries. Additionally, he expanded the way others previously studied inequality by looking at two forms of income: income from labor and income from capital, and two types of income tax: income tax returns and estate tax returns.

The book reaches two main conclusions, the first of which is that wealth and its distribution have always been profoundly political issues rather than simply the product of economic mechanisms, and thus the history of inequality is shaped by a combination of political, social, and economic actors’ perceptions of what is just and what is not, the actor’s power, and their collective choices. Secondly, he adds to the existing scholarship that asserts that there isn’t a “natural” approach to avert economic crises and that instead, governmental policies and interventions are needed. In light of this, he suggests in his book changing taxation policies such that they strive to eliminate high incomes as opposed to raising revenue. He initially proposed a progressive annual tax on global wealth, which would account for all types of assets and would heavily tax top fortunes. After describing it as a “utopia” as it would need massive global cooperation to establish a tax schedule that applies to all wealth around the world and then deciding how to apportion the revenue, he suggests a regional or continental tax that can arrange for further future cooperation among regions.

References:

https://en.wikipedia.org/wiki/Thomas_Piketty

https://www.britannica.com/biography/Thomas-Piketty

Piketty, Thomas, and Arthur Goldhammer (translation). Capital in the Twenty-First Century. Harvard University Press, 2014.

Additional Relevant Sources/Reads:

World Inequality Database: https://wid.world/wid-world/

World Inequality Report 2022: https://wir2022.wid.world/

Interview on his book “Capital and Ideology”: https://www.socialeurope.eu/capital-and-ideology-interview-with-thomas-piketty

13th Nelson Mandela Annual Lecture (2015): https://www.nelsonmandela.org/news/entry/transcript-of-nelson-mandela-annual-lecture-2015

Rethink Capital and Wealth Taxation (2022): https://wid.world/document/rethinking-capital-and-wealth-taxation-world-inequality-lab-working-paper-2022-18/

Critique of Thomas Piketty’s Political Economy: https://www.jstor.org/stable/43610637

Capital and the Developing World: https://www.ethicsandinternationalaffairs.org/journal/thomas-pikettys-capital-and-the-developing-world