A plea for a political and historical economy, Thomas Piketty's talk aimed to answer the question: "Will 21st-century capitalism be as unequal and unstable as 19th-century capitalism?" According to the speaker, capitalism cannot be self-balancing, as there is no balancing force that naturally returns societies to paths of balanced growth. Without a vigorous return to political control, capitalism jeopardizes the meritocratic values that underpin our modern democracies.
The contemporary economic situation is thus akin to that of the 19th century. According to Thomas Piketty, we therefore need to reopen the questions posed by Ricardo and Marx on the link between growth and the distribution of wealth, and the relationship between capital and income, even if the answers they gave to these questions are not good ones. It should also be remembered that the trend towards equalization of conditions, the source of an optimistic consensus during the Cold War around the Kuznets curve, was established for accidental reasons (wars), not under the effect of a virtuous market mechanism. The situation in the middle of the 20th century was therefore an anomaly. Since the rise of inequality within developed countries in the 1970s and 80s, this optimism has had to be abandoned.
For the 21st century to invent a more peaceful way of overcoming inequalities than the 20th, we must first, according to T. Piketty, we must first get rid of two illusions: the illusion of human capital (the share of income from capital is as high today as it was in the 19th century) and the illusion of a war between the ages (for generations born from the 1970s-1980s, inheritance is almost as important as it was in the 19th century).
In the discussion, the methodological difficulty posed by the absence of data on income distribution in the past was raised. Then, returning to the effect of wars on major socio-economic transformations, the discussion highlighted the need for democratic preparation for these post-conflict reforms. Finally, a number of suggestions were put forward to explain the growing legitimization of inequality in contemporary society.
Thomas Piketty is Director of Studies at EHESS and Professor at the Paris School of Economics. He is notably the author of Pour une révolution fiscale (Le Seuil, 2011) with Emmanuel Saez and Camille Landais, and "On the Long Run Evolution of Inheritance. France, 1820-2050"(PSE Working Paper, 2010).
