Piketty Quotes

Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it. ~ Thomas Piketty

In countries where income from labor is most equally distributed, such as the Scandinavian countries between 1970 and 1990, the top 10 percent of earners receive about 20 percent of total wages and the bottom 50 percent about 35 percent. ~ Thomas Piketty

Goldin and Katz have no doubt that increased wage inequality in the United States is due to a failure to invest sufficiently in higher education. More precisely, too many people failed to receive the necessary training, in part because families could not afford the high cost of tuition. In order to reverse this trend, they conclude, the United States should invest heavily in education so that as many people as possible can attend college. ~ Thomas Piketty

Economists should be modest and be aware that they are part of the broader social science community. We need to be pragmatic about the methods we use. When we need to do history, we should do history. When we need to study political science, we should study political science. ~ Thomas Piketty

the decrease in the top marginal income tax rate led to an explosion of very high incomes, which then increased the political influence of the beneficiaries of the change in the tax laws, who had an interest in keeping top tax rates low or even decreasing them further and who could use their windfall to finance political parties, pressure groups, and think tanks. ~ Thomas Piketty

I'm not as pessimistic as what a number of people seem to believe. ~ Thomas Piketty

Sub-Saharan Africa, with a population of 900 million and an annual output of only 1.8 trillion euros (less than the French GDP of 2 trillion), ~ Thomas Piketty

Private property and the market system are good not only to promote innovation and to promote growth; private property and the market system are good for our personal freedom. ~ Thomas Piketty

I am not political. It is not my job. But I would be happy if politicians could read my work and draw some conclusions from it. ~ Thomas Piketty

tax is always more than just a tax: it is also a way of defining norms and categories and imposing a legal framework on economic activity. ~ Thomas Piketty

The history of inequality is shaped by the way economic, social, and political actors view what is just and what is not, as well as by the relative power of those actors and the collective choices that result. It is the joint product of all relevant actors combined. ~ Thomas Piketty

Capitalism and market forces are very powerful in producing wealth and innovation. But we need to ensure that these forces act in the common interest. ~ Thomas Piketty

Autarky has never promoted prosperity. ~ Thomas Piketty

All told, over the period 1932-1980, nearly half a century, the top federal income tax rate in the United States averaged 81 percent. ~ Thomas Piketty

Notwithstanding the extravagance of some of their characters, these nineteenth-century novelists describe a world in which inequality was to a certain extent necessary: if there had not been a sufficiently wealthy minority, no one would have been able to worry about anything other than survival. This view of inequality deserves credit for not describing itself as meritocratic, if nothing else. In a sense, a minority was chosen to live on behalf of everyone else, but no one tried to pretend that this minority was more meritorious or virtuous than the rest. … Modern meritocratic society, especially in the United States, is much harder on the losers, because it seeks to justify domination on the ground of justice, virtue, and merit, to say nothing of the insufficient productivity of those at the bottom. ~ Thomas Piketty

Housing is the favorite investment of the middle class and moderately well-to-do, but true wealth always consists primarily of financial and business assets. ~ Thomas Piketty

When the rate of return on capital significantly exceeds the growth rate of the economy (as it did through much of history until the nineteenth century and as is likely to be the case again in the twenty-first century), then it logically follows that inherited wealth grows faster than output and income. People ~ Thomas Piketty

There is no escaping the fact, however, that social science research on the distribution of wealth was for a long time based on a relatively limited set of firmly established facts together with a wide variety of purely theoretical speculations. ~ Thomas Piketty

What I argue for is a progressive tax, a global tax, based on the taxation of private property. ~ Thomas Piketty

In the United States, France, and most other countries, talk about the virtues of the national meritocratic model is seldom based on close examination of the facts. Often the purpose is to justify existing inequalities while ignoring the sometimes patent failures of the current system. In 1872, Emile Boutmy created Sciences Po with a clear mission in mind: "obliged to submit to the rule of the majority, the classes that call themselves the upper classes can preserve their political hegemony only by invoking the rights of the most capable. As traditional upper-class prerogatives crumble, the wave of democracy will encounter a second rampart, built on eminently useful talents, superiority that commands prestige, and abilities of which society cannot sanely deprive itself. ~ Thomas Piketty

the future could hold in store a new world of inequality more extreme than any that preceded it. ~ Thomas Piketty

This leads to the idea of a race between education and technology: if the supply of skills does not increase at the same pace as the needs of technology, then groups whose training is not sufficiently advanced will earn less and be relegated to devalued lines of work, and inequality with respect to labor will increase. In order to avoid this, the educational system must increase its supply of new types of training and its output of new skills at a sufficiently rapid pace. If equality is to decrease, moreover, the supply of new skills must increase even more rapidly, especially for the least well educated. ~ Thomas Piketty

By comparing various sources of data, moreover, it is possible to estimate that the average income of the parents of Harvard students is currently about $450,000, which corresponds to the average income of the top 2 percent of the US income hierarchy.32 Such a finding does not seem entirely compatible with the idea of selection based solely on merit. The contrast between the official meritocratic discourse and the reality seems particularly extreme in this case. The total absence of transparency regarding selection procedures should also be noted.33 ~ Thomas Piketty

My premise is not to tax to destroy the wealth of the wealthy; it's to increase the wealth of the bottom and the middle class. ~ Thomas Piketty

For millions of people, "wealth" amounts to little more than a few weeks' wages in a checking account or low-interest savings account, a car, and a few pieces of furniture. The inescapable reality is this: wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities. That is why it is so essential to study capital and its distribution in a methodical, systematic way. ~ Thomas Piketty

Income from labor [in the United States] is about as unequally distributed as has ever been observed anywhere. ~ Thomas Piketty

What is most frightening about Vautrin's lecture is that his brisk portrait of Restoration society contains such precise figures. As I will soon show, the structure of the income and wealth hierarchies in nineteenth-century France was such that the standard of living the wealthiest French people could attain greatly exceeded that to which one could aspire on the basis of income from labor alone. Under such conditions, why work? And why behave morally at all? Since social inequality was in itself immoral and unjustified, why not be thoroughly immoral and appropriate capital by whatever means are available? The ~ Thomas Piketty

the higher returns of the largest endowments are not due primarily to greater risk taking but to a more sophisticated investment strategy that consistently produces better results. ~ Thomas Piketty

The bad news (or good news, depending on your point of view) is that things have always been like this. ~ Thomas Piketty

If you have free trade and free circulation of
capital and people but destroy the social state and all forms of progressive taxation, the temptations of defensive nationalism and identity politics will very likely grow stronger than ever in both Europe and the United States. Note, finally, that the less developed countries will be among the primary beneficiaries of a more just and transparent international tax system. ~ Thomas Piketty

The United States could transform its property tax system into a progressive tax on net worth without asking permission to the rest of the world. ~ Thomas Piketty

always increasing and that the world is by definition always becoming more unjust. Others believe that inequality is naturally decreasing, or that harmony comes about automatically, and that in any case nothing should be done that might risk disturbing this happy equilibrium. Given this dialogue of the deaf, in which each camp justifies its ~ Thomas Piketty

Indeed, the distribution of wealth is too important an issue to be left to economists, sociologists, historians, and philosophers. ~ Thomas Piketty

the baby boom cohorts had to make it on their own, almost as much as the interwar and turn-of-the-century cohorts, who were devastated by war. By contrast, the cohorts born in the last third of the century experienced the powerful influence of inherited wealth to almost the same degree as the cohorts of the nineteenth and twenty-first centuries. ~ Thomas Piketty

one would expect to see a flow of investments in Africa from other countries, especially China and other Asian nations. ~ Thomas Piketty

It's not Utopian to believe that we can create a global registry of financial assets so we know who owns what in different countries. ~ Thomas Piketty

I think if you look back through time, the history of income, wealth and taxation is full of surprise. So I am not terribly impressed by those who know in advance what will or will not happen. ~ Thomas Piketty

According to Piketty, if r remains at its historical rate of about 5 percent, then all the negative developments related to the inequality from the 19th century will be repeated. These will include disrespect for working people; worshiping of people who do not work and enjoy leisurely life by living at the expense of other people's labor; political acts that disdain equal opportunity and deny democracy; and opportunities for the rich to buy politicians. What logical conclusion can be made from Piketty's research? If this development continues, then by the end of the 21st century, the world's wealth may become the property of a few enormously rich individuals and institutions. Then, 99.9 percent of humans will end up working for a small number of oligarchs, who will accumulate their wealth by virtue of heredity instead of earning it based on merit. ~ I.K. Mullins

When inequality gets too extreme, then it becomes useless for growth, and it can even become bad because it tends to lead to high perpetuation of inequality over time and low mobility. ~ Thomas Piketty

Economists tend to think they are much, much smarter than historians, than everybody. And this is a bit too much because at the end of the day, we don't know very much in economics. ~ Thomas Piketty

The only continent not in equilibrium is Africa, where a substantial share of capital is owned by foreigners. ~ Thomas Piketty

The social sciences collectively know too little to waste time on foolish disciplinary squabbles. ~ Thomas Piketty

There is one great advantage to being an academic economist in France: here, economists are not highly respected in the academic and intellectual world or by political and financial elites. Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything. ~ Thomas Piketty

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... ~ Thomas Piketty

In all human societies, health and education have an intrinsic value: the ability to enjoy years of good health, like the ability to acquire knowledge and culture, is one of the fundamental purposes of civilization. ~ Thomas Piketty

There is a fundamentalist belief by capitalists that capital will save the world, and it just isn't so. ~ Thomas Piketty

The U.S. is the country that invented progressive taxation of income and of inherited wealth in the 1910s and '20s. ~ Thomas Piketty

the income of nonwage workers is "mixed," because it combines income from labor with income from capital. This is also referred to as "entrepreneurial income. ~ Thomas Piketty

Democracy will never be supplanted by a republic of experts - and that is a very good thing. ~ Thomas Piketty

What was the good of industrial development, what was the good of all the technological innovations, toil, and population movements if, after half a century of industrial growth, the condition of the masses was still just as miserable as before, and all lawmakers could do was prohibit factory labor by children under the age of eight? ~ Thomas Piketty

At the heart of every major political upheaval lies a fiscal revolution. ~ Thomas Piketty

taxes consumed less than 10 percent of national income in all four countries during the nineteenth century and up to World War I. This reflects the fact that the state at that time had very little involvement in economic and social life. ~ Thomas Piketty

The dynamics of the global distribution of capital are at once economic, political, and military. This was already the case in the colonial era, when the great powers of the day, Britain and France foremost among them, were quick to roll out the cannon to protect their investments. Clearly, the same will be true in the twenty-first century, in a tense new global political configuration whose contours are difficult to predict in advance. ~ Thomas Piketty

Progress in medicine together with improved living conditions has therefore, it is argued, totally transformed the very essence of capital. ~ Thomas Piketty

Economic growth is quite simply incapable of satisfying this democratic and meritocratic hope, which must create specific institutions for the purpose and not rely solely on market forces or technological progress. ~ Thomas Piketty

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. ~ Thomas Piketty

Our democratic societies rest on a meritocratic worldview, or at any rate a meritocratic hope, by which I mean a belief in a society in which inequality is based more on merit and effort than on kinship and rents. This belief and this hope play a very crucial role in modern society, for a simple reason: in a democracy, the professed equality of rights of all citizens contrasts sharply with the very real inequality of living conditions, and in order to overcome this contradiction it is vital to make sure that social inequalities derive from rational and universal principles rather than arbitrary contingencies. Inequalities must therefore be just and useful to all, at least in the realm of discourse and as far as possible in reality as well. ~ Thomas Piketty

I don't live in the Cold War. Some people maybe still live in the Cold War, but this is their problem, not mine. ~ Thomas Piketty

None of the Asian countries that have moved closer to the developed countries of the West in recent years has benefited from large foreign investments, whether it be Japan, South Korea, or Taiwan and more recently China. In essence, all of these countries themselves financed the necessary investments in physical capital and, even more, in human capital, which the latest research holds to be the key to long-term growth.35 Conversely, countries owned by other countries, whether in the colonial period or in Africa today, have been less successful, most notably because they have tended to specialize in areas without much prospect of future development and because they have been subject to chronic political instability. ~ Thomas Piketty

can we imagine political institutions that might regulate today's global patrimonial capitalism justly as well as efficiently? ~ Thomas Piketty

Conversely, younger people, in particular those born in the 1970s and 1980s, have already experienced (to a certain extent) the important role that inheritance will once again play in their lives and the lives of their relatives and friends. For this group, for example, whether or not a child receives gifts from parents can have a major impact in deciding who will own property and who will not, at what age, and how extensive that property will be - in any case, to a much greater extent than in the previous generation. Inheritance is playing a larger part in their lives, careers, and individual and family choices than it did with the baby boomers. ~ Thomas Piketty

showed that even with the considerable increase in the average level of education over the course of the twentieth century, earned income inequality did not decrease. Qualification levels shifted upward: a high school diploma now represents what a grade school certificate used to mean, a college degree what a high school diploma used to stand for, and so on. ~ Thomas Piketty

The principal mechanism for convergence at the international as well as the domestic level is the diffusion of knowledge. ~ Thomas Piketty

The most striking fact is no doubt that in all these societies, half of the population own virtually nothing: the poorest 50 percent invariably own less than 10 percent of national wealth, and generally less than 5 percent. ~ Thomas Piketty

Thomas Piketty assembles the facts to prove a central point about trickle-down economics: Doesn't work. Never did. He has cold, hard data showing how the rich keep getting richer and how the playing field is rigged against working families. ~ Elizabeth Warren

no mathematical formula or econometric estimate can tell us exactly what tax rate ought to be applied to what level of income. Only collective deliberation and democratic experimentation can do that. ~ Thomas Piketty

Although data on this are sparse, it also seems that US politicians of both parties are much wealthier than their European counterparts and in a totally different category from the average American, which might explain why they tend to confuse their own private interest with the general interest. ~ Thomas Piketty

Modern redistribution is built around a logic of rights and a principle of equal access to a certain number of goods deemed to be fundamental. ~ Thomas Piketty

When a country goes from a population of 3 million to a population of 300 million (to say nothing of the radical increase in territory owing to westward expansion in the nineteenth century), it is clearly no longer the same country. ~ Thomas Piketty

the function of the system of financial intermediation (banks and financial markets): to find the best possible uses for capital, such that each available unit of capital is invested where it is most productive (at the opposite ends of the earth, if need be) and pays the highest possible return to the investor. ~ Thomas Piketty

One way to have broader access to wealth is to reduce the tax on the large group and increase the tax on the very top so concentration of wealth doesn't get to extreme levels. ~ Thomas Piketty

What I'm pushing for is an economic discipline that will be closer to other social sciences; in particular, we should be more pragmatic about the methods that we are using instead of pretending that we have our own scientific apparatus with very sophisticated mathematic models that distinguish us from sociologists and historians. ~ Thomas Piketty

Piketty would impose a progressive annual tax on capital. By a static analysis, such a tax might reduce the yield of capital to the rate of GDP expansion and thus eliminate the bias toward top-heavy accumulation by elites. Upholding the secular stagnation theory of permanent growth slowdown, he naturally focuses on depressing the return to capital. Taking money from the rich and giving it to government might seem to address "inequality." But by putting capital into the hands of the least productive users of it - politicians - he would aggravate the very stagnation he warns against. ~ George Gilder

In the United States, the most recent survey by the Federal Reserve, which covers the same years, indicates that the top decile own 72 percent of America's wealth, while the bottom half claim just 2 percent. ~ Thomas Piketty

We know too little about global wealth dynamics, so we need international transmission of bank information. ~ Thomas Piketty

The sharp reduction in income inequality that we observe in almost all the rich countries between 1914 and 1945 was due above all to the world wars and the violent economic and political shocks they entailed (especially for people with large fortunes). It had little to do with the tranquil process of intersectoral mobility described by Kuznets. ~ Thomas Piketty

Contrary to a tenacious myth, France is not owned by California pension funds or the Bank of China, any more than the United States belongs to Japanese and German investors. The fear of getting into such a predicament is so strong today that fantasy often outstrips reality. The reality is that inequality with respect to capital is a far greater domestic issue than it is an international one. ~ Thomas Piketty

'Das Kapital,' I think, is very difficult to read, and for me, it was not very influential. ~ Thomas Piketty

Protectionism does not produce wealth, and free trade and economic openness are ultimately in everyone's interest ~ Thomas Piketty

Among the members of these upper income groups are US academic economists, many of whom believe that the economy of the United States is working fairly well and, in particular, that it rewards talent and merit accurately and precisely. This is a very comprehensible human reaction. ~ Thomas Piketty

To be sure, there exists in principle a quite simple economic mechanism that should restore equilibrium to the process: the mechanism of supply and demand. If the supply of any good is insufficient, and its price is too high, then demand for that good should decrease, which should lead to a decline in its price. In other words, if real estate and oil prices rise, then people should move to the country or take to traveling about by bicycle (or both). Never mind that such adjustments might be unpleasant or complicated; they might also take decades, during which landlords and oil well owners might well accumulate claims on the rest of the population so extensive that they could easily come to own everything that can be owned, including rural real estate and bicycles, once and for all.3 As always, the worst is never certain to arrive. It is much too soon to warn readers that by 2050 they may be paying rent to the emir of Qatar. ~ Thomas Piketty

the return on capital increases with the size of the initial endowment, ~ Thomas Piketty

the upper classes instinctively abandoned idleness and invented meritocracy lest universal suffrage deprive them of everything they owned. ~ Thomas Piketty

monopsony" rather than monopoly), in which case the owner of capital can impose a rate of return greater than the marginal productivity of his capital. ~ Thomas Piketty

I don't pretend that I can predict the future value of the growth rate or rate of return. ~ Thomas Piketty

In North America, there is no nostalgia for the postwar period, quite simply because the Trente Glorieuses never existed there: per capita output grew at roughly the same rate of 1.5–2 percent per year throughout the period 1820–2012. To be sure, growth slowed a bit between 1930 and 1950 to just over 1.5 percent, then increased again to just over 2 percent between 1950 and 1970, and then slowed to less than 1.5 percent between 1990 and 2012. In Western Europe, which suffered much more from the two world wars, the variations are considerably greater: per capita output stagnated between 1913 and 1950 (with a growth rate of just over 0.5 percent) and then leapt ahead to more than 4 percent from 1950 to 1970, before falling sharply to just slightly above US levels (a little more than 2 percent) in the period 1970–1990 and to barely 1.5 percent between 1990 and 2012.
Western Europe experienced a golden age of growth between 1950 and 1970, only to see its growth rate diminish to one-half or even one-third of its peak level during the decades that followed.
[...]
If we looked only at continental Europe, we would find an average per capita output growth rate of 5 percent between 1950 and 1970 - a level well beyond that achieved in other advanced countries over the past two centuries.
These very different collective experiences of growth in the twentieth century largely explain why public opinion in different countries varies so widely in regard to commercial and ~ Thomas Piketty

We should not overestimate the extent of the diffusion of ownership that has taken place over the past two centuries: the egalitarian ownership society - or even, more modestly, a society in which the poorest half of the population owns more than a token share of the wealth - has yet to be invented. ~ Thomas Piketty

I loved American universities. In many ways, they are better organized - certainly than French universities. ~ Thomas Piketty

I am afraid that if you don't find peaceful domestic solutions to our inequality and social problems, then it's always tempting to find other people responsible for our problems. ~ Thomas Piketty

Our modern democratic ideal is based on the hope that inequalities will be based on merit more than inheritance or luck. ~ Thomas Piketty

The concrete, physical reality of inequality is visible to the naked eye and naturally inspires sharp but contradictory political judgments. Peasant and noble, worker and factory owner, waiter and banker: each has his or her own unique vantage point and sees important aspects of how other people live and what relations of power and domination exist between social groups, and these observations shape each person's judgment of what is and is not just. Hence there will always be a fundamentally subjective and psychological dimension to inequality, which inevitably gives rise to political conflict that no purportedly scientific analysis can alleviate. ~ Thomas Piketty

For industrial goods, productivity growth has been more rapid than for the economy as a whole, so that prices in this sector have fallen relative to the average of all prices. Foodstuffs is a sector in which productivity has increased continuously and crucially over the very long run (thereby allowing a greatly increased population to be fed by ever fewer hands, liberating a growing portion of the workforce for other tasks), even though the increase in productivity has been less rapid in the agricultural sector than in the industrial sector, so that food prices have evolved at roughly the same rate as the average of all prices. Finally, productivity growth in the service sector has generally been low (or even zero in some cases, which explains why this sector has tended to employ a steadily increasing share of the workforce), so that the price of services has increased more rapidly than the average of all prices. ~ Thomas Piketty

I believe in the power of ideas, I believe in the power of books, but you have to give them time. ~ Thomas Piketty

To be sure, the cost of managing capital and of "formal" financial intermediation (that is, the investment advice and portfolio management services provided by a bank or official financial institution or real estate agency or managing partner) is obviously taken into account and deducted from the income on capital in calculating the average rate of return (as presented here). But this is not the case with "informal" financial intermediation: every investor spends time - in some cases a lot of time - managing his own portfolio and affairs and determining which investments are likely to be the most profitable. This effort can in certain cases be compared to genuine entrepreneurial labor or to a form of business activity. ~ Thomas Piketty

One should be wary, however, of the conventional wisdom that modern economic growth is a marvelous instrument for revealing individual talents and aptitudes. There is some truth in this view, but since the early nineteenth century it has all too often been used to justify inequalities of all sorts, no matter how great their magnitude and no matter what their real causes may be, while at the same time gracing the winners in the new industrial economy with every imaginable virtue. ~ Thomas Piketty

Taxation is neither good nor bad in itself. Everything depends on how taxes are collected and what they are used for. ~ Thomas Piketty

I want to be clear that at this stage I am not making a judgment about whether a society of this kind really deserves to be characterized as "hypermeritocratic." It is hardly surprising that the winners in such a society would wish to describe the social hierarchy in this way, and sometimes they succeed in convincing some of the losers. ~ Thomas Piketty

Income inequality increased quite sharply in the United States during the 1920s, however, peaking on the eve of the 1929 crash with more than 50 percent of national income going to the top decile - ~ Thomas Piketty

We want capitalism and market forces to be the slave of democracy rather than the opposite. ~ Thomas Piketty

wealth in the rich countries is currently divided into two approximately equal (or comparable) parts: real estate and financial assets. ~ Thomas Piketty