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Thomas Piketty

Thomas Piketty

Thomas Piketty (7 May 1971) is a French economist who works on wealth and income inequality. He is a professor (directeur d'études) at the École des hautes études en sciences sociales (EHESS), associate chair at the Paris School of Economics and Centennial professor at the London School of Economics new International Inequalities Institute.

Articles by Thomas Piketty

The Transferunion fantasy

10 days ago

While the political crisis deepens in Italy and in Spain, France and Germany are still demonstrably incapable of formulating precise and ambitious proposals for reforming Europe. All that is required however is for these four countries, who alone account for three quarters of the GDP and the population of the Euro zone, to agree on a common approach and the way to reform would be open. How can we explain such extraordinary inertia and why is it so serious?
In France, there is a tendency to lay the blame on other people. The official view is that our young and dynamic president has made innovative proposals for the reform of the Euro zone, its budget and its Parliament. But the unfortunate thing is that our neighbours are incapable of taking these into account and responding with

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May 1968 and inequality

May 8, 2018

Should we burn May ’68? Critics claim that the spirit of May ’68 has contributed to the rise of individualism, even to ultra-liberalism. In truth, these assertions do not stand up to close scrutiny. On the contrary, the May ’68 Movement was the start of a historical period of considerable reduction in social inequalities in France which ran out of steam later for quite different reasons.
Let’s go back for a moment. In France the years 1945-1967 are marked by high rates of growth, but also by a movement of reconstitution of inequalities, with, at one and the same time, a steep rise in the share of profits in national income and the reconstitution of highly ranked salary scales. The share of the 10% highest incomes which was barely 31% of total income in 1945 gradually rose to 38% in

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Capital in Russia

April 10, 2018

Next month Karl Marx will be 200 years old. What would he have thought of the sad state Russia is in today? This is a country which never ceased to claim to be ‘Marxist Leninist’ throughout the Soviet period. Doubtless he would have denied any responsibility for a regime which appeared long after his death. Marx grew up in a world of censitory oppression and private property sacralization, where even the owners of slaves could be handsomely compensated if their property was violated (for ‘liberals’ like Toqueville this was a matter of course). It would have been difficult for him to anticipate the success of social democracy and the welfare state in the 20th century. Marx was 30 years old at the time of the 1848 revolutions and he died in 1883, the year of Keynes’ birth. Both were

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Towards a Union in the Union

March 13, 2018

After the Italian elections and Trump’s commercial antics one might well feel depressed and be tempted to use Europe to play the same silly game of introverted assertion of identity – strengthening immigration laws and ramping up protectionist measures. In so doing, we would be forgetting two key points.
One: contrary to what we sometimes hear, the rise of European populism is not explained by any flood of immigrants. The truth is that the number of migrants entering the UE was much higher before the financial crisis (1.2 million per year between 2000 and 2008). The numbers then collapsed (500,000 per year between 2008 and 2016) whereas the geo-political situation would have demanded greater openness. If we had not made serious mistakes in managing the economy, provoking a further

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Parcoursup: could do better

February 13, 2018

All societies need a grand narrative to justify their inequalities. In contemporary societies, the focus is on the meritocratic narrative. Modern inequality is just because it is the outcome of a process which is freely chosen in which each individual has the same opportunities. The problem is that there is a yawning gap between the official meritocratic declarations and the reality.
In the United States, the chances of acceding to higher education are almost entirely determined by the income of one’s parents; barely 20% for the poorest 10%, and over 90% for the richest 10%. We should moreover make it clear that we are in no way talking of the same higher education in the two cases. Possibly, the situation is not quite as extreme in France. But the truth is that we do not really

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Democratising Europe begins with ECB nominations

January 29, 2018

This collective op-ed was initially published on January 22 2018 in Le Monde (in French) and in VoxEurop (in English).

While our eyes are glued to the interminable vicissitudes of the German Groko, a no less important story is playing out in Brussels, but has so far met with indifference. On January 22nd and February 19th, Eurogroup finance ministers will hold private meetings that will mark the beginning of a profound renewal of the European Central Bank executive board. The first big change will be the planned replacement of current Vice-President, Vitor Constancio. In the next two years, no less than 4 of the 6 members of the executive body of the ECB, Mario Draghi included, will be replaced.
All signs indicate that the future of economic, fiscal and monetary policy in eurozone

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2018, the year of Europe

January 16, 2018

Ten years after the financial crisis, will the year 2018 see Europe making a great leap forward? Several factors contribute to this view, but the outcome is far from certain.
The crisis in 2008, which triggered the sharpest global recession since the 1929 crisis, clearly originated in the increasingly obvious weaknesses of the American system: excessive deregulation, an explosion in inequalities, indebtedness of the poorest. Supported by a more equalitarian and inclusive model of development, Europe could have seized the opportunity to promote a better system of regulating global capitalism. However, the lack of trust between the members of the European Union, confined within rigid rules applied inappropriately, led them to provoke a further recession in 2011-2013 from which they

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Trump, Macron: same fight

December 12, 2017

It is customary to contrast Trump and Macron: on one hand the vulgar American businessman with his xenophobic tweets and global warming scepticism; and on the other, the well-educated, enlightened European with his concern for dialogue between different cultures and sustainable development. All this is not entirely false and rather pleasing to French ears. But if we take a closer look at the policies being implemented, one is struck by the similarities.
In particular, Trump, like Macron, has just had very similar tax reforms adopted. In both cases, these constitute an incredible flight in the direction of fiscal dumping in favour of the richest and most mobile.
Let me recap recent events. In the United States, the Senate has approved the main lines of the Trump plan ; the rate of

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The Catalan syndrom

November 14, 2017

Is the crisis in Catalonia due to over-centralization and the intransigeance of the authorities in Madrid? Or is it instead due to generalized competition between regions and countries rivalling with each other, each pursuing their own interests, a process which has already gone much too far both in Spain and in Europe?

Let’s take a step backwards. To explain the tougher pro-independence stand, reference is often made to the decision by the Spanish constitutional tribunal in 2010 to invalidate the new status of autonomy for Catalonia, following the high number of actions lodged by the elected members of the Popular Party. Even if some of the measures challenged  by the judges did pose serious substantive issues (in particular concerning the regionalisation of justice), the method

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Budget 2018: French youth sacrified

October 21, 2017

To date the debate on the 2018 budget in France has concentrated on the question of tax gifts to the most wealthy. De facto, the abolition of the wealth tax and the measures in favour of top dividends and interests will cost the State budget over 5 billion euros.
But it is also important to insist on the other side of the coin, in other words the losers in the 2018 budget and, in particular, on the young people sacrificed as a consequence of the fall in student expenditure per capita in higher education. This will also enable me to clarify a number of issues raised by internauts about my last post (see « Suppression of the wealth tax: an historical error« ).
Officially, the draft 2018 Budget Bill which the government has just tabled shows a slight increase in expenditure on higher

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Suppression of the wealth tax: an historical error

October 10, 2017

Let it be said at once: the suppression of the wealth tax (Impôt sur la Fortune or ISF) constitutes a serious moral, economic and historical mistake. This decision reveals a profound misunderstanding of the challenges to inequality posed by globalisation.
Let’s go back for a moment. During the first globalisation period between 1870 and 1914, a strong international movement gradually took shape which sought to promote a new type of redistribution and taxation. Based on a progressive taxation system on income, wealth and inheritance, this new model was aimed at a better distribution of productivity gains and the structural reduction of the concentration of property and economic power. It was successfully implemented in the period 1920 to 1970, partly as a result of the pressure of

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The CICE comedy

July 11, 2017

Yet another deferral! The government of Emmanuel Macron and Edouard Philippe had already announced the postponement of the deduction of income tax at source till 2019 for totally opportunist reasons. The risk is that this elementary reform in tax modernisation, awaited in France for decades, may finally never see the light of day, even though the scheme was all ready to come into operation in January 2018. The government has now announced the postponement until 2019 of the replacement of the CICE (Tax Credit for Competitiveness and Employment/ Crédit d’Impôt pour la Compétitivité et l’Emploi) by a long-term reduction in the employers’ contributions. This is despite the promise of this reform during the electoral campaign – and the fact that it had also been promised by François

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Will Macron’s Marchers take power?

June 26, 2017

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With over 350 seats, the MPs elected on the « La république en marche » (LREM) ticket will have an overwhelming majority in the Assemblée Nationale (Parliament). Will they use it to be in the forefront of reform and renewal of French politics? Or will they simply play a passive role, rubber stamping and obediently voting the texts that the government sends them?
It happens that they will shortly be faced with their first real-life test with the question of deduction of income tax at source. The government wishes to postpone the implementation until 2019, perhaps forever, for reasons which are totally opportunist and unjustified. This big step backwards is bad news for the alleged intention to reform and modernise the French fiscal and social system proclaimed

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Reagan to the power of ten

June 13, 2017

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Is Trump a UFO in American history or can he be seen as the continuation of long-term trends? While we have no desire to deny “Donald’s” obvious specificities, including his inimitable art of the tweet, we do have to admit that elements of continuity prevail.
The tax agenda which he has just tabled in Congress is eloquent. It can be summed up in two central measures: reduction of federal income tax on corporate profits from 35% to 15% (a rate which Trump would also like to see applied to individual entrepreneurs like himself); a total end to inheritance tax. This is clearly a direct prolongation of the programme for ‘scrapping’ the progressive tax launched by Reagan in the 1980s.
Let’s go back a bit. In order to counter the rise in inequality and the excessive

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What reforms for France?

May 16, 2017

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Will the election of Emmanuel Macron enable France to relaunch itself and revive Europe? We would like to think so but this is not guaranteed. The new president does have some good insights but the overall impression is of a programme in draft version and somewhat opportunist.
The most promising project is the modernisation and unification of our social protection. In France more than elsewhere, our social system has been constructed in stages with layers of reform stacked one on top of the other. The result is considerable complexity and illegibility. The most extreme example is the retirement pension schemes. The system is well financed but the multitude of schemes and rules means that nobody understands anything about his or her future rights. A

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Inequality in France

April 18, 2017

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A long-standing legend has it that France is a profoundly egalitarian country which has miraculously escaped the sharp rise in inequality observed elsewhere. If so, how can we explain the anxiety provoked by globalisation and by Europe which is expressed so forcefully in this presidential campaign? In the first instance by recognising that  this great national myth of France as egalitarian and an exception to the rule is grossly exaggerated and, secondly, because it is too often used by the dominant groups to justify our own national hypocrisy.
There is nothing new here. France was the last country to adopt a progressive income tax, and did so under the Law of 15 July 1914, voted in extremis to finance the war. In contrast, this tax had already been introduced in Germany, the United Kingdom, Sweden, the United States and Japan, sometimes decades previously, to finance schools and public services. Until 1914, the political and economic elites in the Third Republic had stubbornly refused this type of reform declaring that France had already become egalitarian, thanks to the Revolution, and therefore had no need of an intrusive and predatory tax, more suited to the aristocratic and authoritarian societies which surrounded us.

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European parliamentary sovereignty on the shoulders of national parliamentary sovereignties

March 28, 2017

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This blog post was first published by Stephanie Hennette, Thomas Piketty, Guillaume Sacriste and Antoine Vauchez on the Verfassungsblog (an international forum on constitutional and legal issues) on March 26 2017.
We are really grateful that the Verfassungsblog has been one of the very first forums engaging the discussion on the Treaty on the democratization of the governance of the euro area (T-Dem). While the proposal has emerged in the framework of the current French presidential campaign, and is now widely debated in this context, it has been primarily thought of as a contribution to the ongoing transnational conversation over the future of the European Union. As authors of the proposal, we first wish to thank our colleague Sébastien Platon for launching an interesting discussion about the T-Dem.

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What would a democratic Euro Zone Assembly look like?

March 22, 2017

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What would the Euro Zone Assembly defended in Le Monde last week by Benoit Hamon look like? What would the political composition be and would it be in a position to « outvote austerity measures » or not? Would it allow to put in place a genuinely democratic euro-zone government?
It should be pointed out straightaway that there is no miracle Parliament or perfect Treaty and that any change in the institutions cannot on its own reconcile Europe with its citizens. The project of a ‘Treaty for the democratization of the governance of the Euro Zone’ – (T-Dem), available on line here in French (and there in English) is simply an initial basis for discussion which would need to be debated at length and improved through proposals from all.
This draft treaty has been prepared by recognized specialists in European Law – Stéphanie Hennette, professor of public law at Paris-Nanterre University and Guillaume Sacriste and Antoine Vauchez, professors and research fellows in political science at the Paris-I-Panthéon-Sorbonne University and in the CNRS (Centre National pour la Recherche Scientique). It does have the virtue of existing and demonstrating that there are solutions available to make Europe more democratic and more social, which do not involve the revision of all the existing treaties, and which are based solely on the countries which wish to move ahead.

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Public capital, private capital

March 14, 2017

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The present economic debate is over-determined by two realities which, moreover, are connected as we sometimes tend to forget. On one hand we have the steady rise in public debt and, on the other, the prosperity of privately owned wealth. The figures for the level of public debt are well known; almost everywhere the level approaches or exceeds 100% of national income (the equivalent of almost one year of gross domestic product) as compared with barely 30% in the 1970s. Far be it from me to minimise the extent of the problem: it is the highest level of public debt since World War Two and historical experience demonstrates that it is difficult to reduce this level of debt by ordinary means. This is precisely why, to get a clear idea of the issues at stake and the alternatives, it is essential to put this reality into perspective by relating it to developments in the structure of the property as a whole.
Briefly: the totality of what is owned in a country can be broken down into public capital, which is the difference between public assets (these include buildings, land, infrastructures, financial portfolios, shares in companies, etc. held by public authorities in different forms: State, municipalities, etc.) and public debt on one hand; and private capital, that is the difference between household assets and debts, on the other.

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For a democratic Euro-zone government

February 15, 2017

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The Euro zone needs a proper government : a joint budget, common rules of taxation, an investment and borrowing capacity, a growth strategy and a model for sustainable and equitable development. But to achieve all these one day the Euro zone must first focus on creating democratic institutions enabling common decision making. There is no point in discussing a government for the Euro zone if the democratic instance to which this government will be responsible is not clearly stated.
At the moment, the main decision-making instance in the Euro zone is the Council of Finance Ministers. The problem is that this Council is usually incapable of taking decisions. For years now, the Euro zone has been supposed to be adjudicating on the restructuring of the Greek debt which everyone knows is unsustainable and these decisions are constantly deferred.
REASONS FOR INACTION
Take another example: for years now there have been a growing number of corporate income tax scandals. Everyone knows now that there is widescale avoidance of this tax by multinationals that often pay rates which are derisory. However, the Euro zone has still not been capable of taking the slightest tangible decision. We are still at the stage of discussing the setting up of a common tax base and we have still not seriously considered the question of a common minimal tax rate.

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On inequality in China

February 14, 2017

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With Trump and Brexit, the Western-type democratic model is under fire. The Chinese media are having a field day. In column after column, the Global Times (official daily newspaper) condemns the explosive cocktail of nationalism, xenophobia, separatism, TV-reality, vulgarity and ‘money reigns supreme’, the outcome of the so-called free elections and the wonderful political institutions which the West would like to impose on the world. No more lessons!
Recently the Chinese authorities organised an international colloquium on ‘The Role of Political Parties in Global Economic Governance’. The message sent to the colloquium by the Chinese Communist Party (CCP) was perfectly clear. Reliance on solid intermediary institutions such as the CCP (which includes 90 million members, or roughly 10% of the adult population, almost as many as the number of voters in the American or French primaries) enables the organisation of discussions and decision-making and the design of a model for stable, harmonious and duly considered development in which identity conflicts and the centrifugal forces brought by the electoral supermarket can be overcome.
By so doing, the Chinese regime may well be over-confident.

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Is our basic income really universal?

February 13, 2017

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After our call « For a credible and bold basic income » launched by a group of ten researchers  (Antoine Bozio, Thomas Breda, Julia Cagé, Lucas Chancel, Elise Huillery, Camille Landais, Dominique Méda, Emmanuel Saez, Tancrède Voituriez), we received considerable support and also, of course, questions and requests for clarification. The first question was: Given that the system of a basic income which we propose does not defend the idea of an identical monthly allowance paid to each individual, is it really universal? The question is legitimate and I would like to reply here as clearly as possible.
Our proposal is based on a strong conviction: it is crucial to broaden the discussion and to explicitly link the question of a basic income (sometimes referred to as a « revenu universel’ or « revenu de base » in French) with that of fiscal reform and a fair wage. In real terms, we propose that for all those who are in steady employment, the income support provided by the system of a basic income should be paid in the most automatic manner possible, that is, directly on the pay-slip, in the same way as social contributions and the CSG (deducted at source from the outset) are paid and also in the same way as income tax (which will be deducted at source as from January 2018).

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For a credible and bold basic income

February 13, 2017

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This call is the initiative of a group of researchers: Antoine Bozio (Ecole d’économie de Paris, IPP), Thomas Breda (CNRS, Ecole d’Economie de Paris), Julia Cagé (Sciences Po Paris), Lucas Chancel (Ecole d’économie de Paris et Iddri), Elise Huillery (Université Paris-Dauphine), Camille Landais (London School of Economics), Dominique Méda (Université Paris-Dauphine), Thomas Piketty (Ecole des hautes études en sciences sociales, Ecole d’économie de Paris), Emmanuel Saez (University of California, Berkeley) and Tancrède Voituriez (Iddri). It was first published in French on january 25 2017.

The goals of the candidates standing in the presidential primary elections launched by the left must be judged on the relevance of their proposals, their impact on the recovery of economic activity and employment in France, and their effect on social cohesion in the country.
The economic and fiscal policy adopted during François Hollande’s five-year term of office has prevented France from engaging in the dynamics of strong and sustainable economic recovery. The choice made in 2012 to forcibly impose an increase in taxes and reduce deficits in a period of recession killed any hope of growth. The numerous warnings launched in this respect remained unanswered.

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Long live populism !

January 17, 2017

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In less than four months, France will have a new president, but will the president be a man or a woman? After Trump and Brexit there is a risk that the opinion polls will be wrong once again and that Marine Le Pen’s nationalist right wing will come close to winning. Even if the cataclysm is avoided this time there is a real risk of her succeeding in appearing to be the only credible opponent to the liberal right for the next elections. On the radical left, hopes are of course pinned on Jean-Luc Mélenchon but unfortunately he is not the most likely winner.
These two candidates do have one point in common: they both challenge the European treaties and the present system of cut-throat competition between countries and territories, which does attract many of those who have been left behind by globalisation. They do also have fundamental differences: Mélenchon, despite divisive rhetorical outbursts and at times an alarming geo-political imagination, does nevertheless tend towards a progressive and internationalist approach.
The risk of this presidential election is that all the other political forces – and the mainstream media – will simply castigate these two candidates and put them in the same box labelling them as ‘populists’.

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WID.world: new data series on inequality and the collapse of bottom incomes

January 11, 2017

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The World Wealth and Income Database (WID.world) is now available on a new website  offering more data visualization tools and more extensive data series.
Thanks to the combined efforts of Facundo Alvaredo, Tony Atkinson, Lucas Chancel, Emmanuel Saez, Gabriel Zucman and over 110 researchers covering 70 countries from all over the world, WID.world offers open and convenient access to the most extensive available database on the historical evolution of the global distribution of income and wealth, both within countries and between countries.
WID.world was opened to the public on January 9th 2017 in English, and will soon be available in Chinese, Spanish, Arabic and French.
Among the new research presented on WID.world, a new study on inequality in the USA, realized with Emmanuel Saez and Gabriel Zucman. By comparison with previous studies, our new series offer in particular much more detailed estimates for bottom incomes.
With one striking result: the share of bottom 50% incomes dropped from 20% to 12% of total national income between 1980 and 2014, while the share going to the the top 1% rose from 11% to 20% over the same period. Both groups have basically exchanged their respective positions in terms of income shares. This corresponds to a dramatic collapse of the relative position of bottom income groups in US society during this period.

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Of productivity in France and in Germany

January 9, 2017

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At the start of 2017, with the elections in France in the Spring and then in Germany in the Autumn, it may prove useful to return to one of the fundamental issues which plagues discussion at European level, that is the alleged economic asymmetry between Germany with its reputation as prosperous and France which is described as on the decline. I use the term ‘alleged’ because, as we shall see, the level of productivity of the German and French economies – as measured in terms of GDP per hour worked, which is by far most relevant indicator of economic performance – is almost identical. Furthermore it is at the highest world level, demonstrating incidentally that the European social model has a bright future, despite what the Brexiters and Trumpers of every hue might think. This will also enable me to return to several of the issues addressed in this blog in 2016 (in particular concerning the long European recession and the reconstruction of Europe) as well as in my December 2016 article « Basic income or fair wage?« .
Let’s start with the most striking fact.

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Passing of Anthony B. Atkinson

January 3, 2017

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Anthony B. Atkinson passed away in the morning of January 1st 2017, at the age of 72, after a long illness. This leaves us with an invaluable loss.

Anthony « Tony » Atkinson occupies a unique place among economists. During the past half-century, in defiance of prevailing trends, he placed the question of inequality at the center of his work while demonstrating that economics is first and foremost a social and moral science.
Tony was born in 1944 and published his first book in 1969. Between 1969 and 2016, he wrote over forty books and more than 350 scholarly articles. They have brought about a profound transformation in the broader field of international studies of inequality, poverty and the distribution of income and wealth. Since the 1970s, he has also written major theoretical papers, devoted in particular to the theory of optimal taxation. Atkinson was always interested in practical issues of public policy and social justice, and understood that marrying theoretical analysis with a careful look at the actual data was the most powerful way to make progress.
Atkinson’s most important and profound work has to do with the historical and empirical analysis of inequality, carried out within a theoretical frame that he deploys with impeccable mastery and utilizes with caution and moderation.

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Basic income or fair wage?

December 13, 2016

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The debate on basic income has at least one virtue, namely that of reminding us that there is a degree of consensus in France on the fact that everyone should have a minimum income. Disagreements exist over the amount. At the moment, the Revenu de Solidarité Active or RSA (the French minimum income scheme) granted to single individuals with no dependant children is 530 Euros per month, a sum which some people find sufficient, and others would like to increase to 800 Euros. But on both the Right and the Left, everyone seems to agree on the existence of a minimum income around this level in France as, moreover, in numerous other European countries. In the United States, the childless poor have to make do with ‘food stamps’ and the social State often assumes the guise of guardian or even prison. This consensus is to be commended but at the same time we cannot consider it satisfactory.
The problem with the discussion about basic income is that in most instances it leaves the real issues unexplored and in reality expresses a concept of social justice on the cheap. The question of justice is not simply a matter of 530 Euros or 800 Euros a month.

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Agenda for another globalisation

November 15, 2016

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Let it be said at once: Trump’s victory is primarily due to the explosion in economic and territorial inequality in the United States over several decades and the incapacity of successive governments to deal with these. Both the Clinton and the Obama, administrations frequently only went along with the move to liberalisation and sacralisation of the market launched under Reagan, then Bush, father and son; at times they even exacerbated them. The financial and commercial deregulation carried out under Clinton is an example. The suspicion of proximity with finance and the inability of the Democrats’ politico-media elite to learn the lessons from the Sanders vote sealed the deal. Hillary won the popular vote by a whisker, but the participation of the youngest and the lowest income groups was too low to enable key States to be won.
The tragedy is that Trump’s programme will only strengthen the tendency to inequality. He intends to abolish the health insurance laboriously granted to low-paid workers under Obama and to set the country on a headlong course into fiscal dumping, with a reduction from 35% to 15% in the rate of federal tax on corporation profits, whereas to date the United States had resisted this perpetual race against time which came from Europe.

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