Thomas Piketty, Professor of Economics at Paris-based School of Advanced Studies in the Social Sciences and expert on inequality, interviewed by Narayan Lakshman (The Hindu)
Nationalism is not going to solve the big problems, says the economist.
If the catastrophic human toll of the ongoing COVID-19 pandemic was the first wave to strike the world this year, its severe economic consequences – including loss of livelihoods of the poor across countries, leading to massive internal displacement and starvation in many cases – have been the second wave.
It is in this context that the seminal work of Professor Thomas Piketty, Professor of Economics at Paris-based School of Advanced Studies in the Social Sciences and at the Paris School of Economics and Co-Director at the World Inequality Lab and World Inequality Database, on the phenomenon of economic inequality gains additional significance today.
He shared his perspective on this subject, including on its relevance to India, with Narayan Lakshman. Edited transcript:
* Before jumping into an analysis of the current scenario, let us start with a fascinating idea that you explore in your latest book 'Capital and Ideology' – the notion of “participatory” socialism. Could you talk a bit about what it is, and how, if at all, you see it as an essential step to redress the ills of the free-market capitalism and globalisation that has overtaken almost every nation on earth?
The basic idea of participatory socialism in my view is where everyone has the power to participate in the economy. This means access to private property – I believe in private property and do not want state property or communism – which requires a more progressive tax system in order to reduce taxation on the poorest groups in society and possibly pay for an endowment or inheritance that everybody will receive. We say that we believe in equal opportunity, but we live in a world where the bottom 50% of the population does not receive any inherited wealth from the upper rungs, whereas some other people receive millions or billions.
The other dimension of participatory socialism is that workers should be able to participate more in the governance of their companies whether or not they have a share in the capital. To take an example of something that has been done already for some time in a number of countries, including pretty successful countries such as Sweden and Germany, since the 1950s in Germany, workers’ representatives had up to 50% of voting rights in the boards of the largest corporations. Of course, initially, shareholders did not like this in both countries, but 70 years later nobody is questioning this, and everybody feels that this has been a way to get more involvement of the workers in the long-term strategy of the companies.
Now, this question is asked a lot in the United States, in the United Kingdom, and in my country, France, where shareholders have managed to somehow resist this kind of evolution. But I think it could and should become the norm in the future. Generally speaking, one of the themes of my book, Capital and Ideology, is that if you look at the evolution of inequality over time, you see very deep transformation and you see in the long-run, an evolution toward more equality in particular through broader access to education and also through other fundamental goods including health, which is important.
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The Hindu, 20 May, 2020, https://www.thehindu.com/news/national/india-has-to-come-to-terms-with-inequality-thomas-piketty/article31636033.ece?fbclid=IwAR0AJMIC7avMhnR0Vhf1tUq9yTemj4Em_JhpSnBLMgEd5OB4pKpY9FzI2nc