Thomas Piketty

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Thomas Piketty
Piketty in Cambridge 3 crop.jpg
Thomas Piketty in Cambridge, Massachusetts
Born (1971-05-07) May 7, 1971 (age 43)
Clichy, Hauts-de-Seine, France
Nationality France
Institution Paris School of Economics
EHESS
Field Public economics
School/tradition Keynesian economics[citation needed]
Alma mater London School of Economics
École Normale Supérieure
Awards Yrjö Jahnsson Award (2013)
Prix du meilleur jeune économiste de France (2002)
Information at IDEAS/RePEc

Thomas Piketty (French: [tɔma pikɛti]; born May 7, 1971) is a French economist who works on wealth and income inequality. He is professor (directeur d'études) at the École des hautes études en sciences sociales (EHESS) and professor at the Paris School of Economics.[1] He is the author of the best selling book Capital in the Twenty-First Century (2013),[2] which emphasizes the themes of his work on wealth concentrations and distribution over the past 250 years. The book argues that the rate of capital return in developed countries is persistently greater than the rate of economic growth, and that this will cause wealth inequality to increase in the future. To address this problem, he proposes redistribution through a global tax on wealth.[3][4]

Biography[edit]

Piketty was born on May 7, 1971, in the Parisian suburb of Clichy, Hauts-de-Seine. He gained a C-stream (scientific) Baccalauréat, and after taking scientific preparatory classes, he entered the École Normale Supérieure (ENS) at the age of 18, where he studied mathematics and economics.[5] At the age of 22, Piketty was awarded his Ph.D. for a thesis on wealth redistribution, which he wrote at the EHESS and the London School of Economics under Roger Guesnerie.[6]

After earning his PhD, Piketty taught from 1993 to 1995 as an assistant professor in the Department of Economics at the Massachusetts Institute of Technology. In 1995, he joined the French National Centre for Scientific Research (CNRS) as a researcher, and in 2000 he became professor (directeur d'études) at EHESS.[5]

Piketty won the 2002 prize for the best young economist in France, and according to a list dated November 11, 2003, he is a member of the scientific orientation board of the association À gauche, en Europe (fr), founded by Michel Rocard and Dominique Strauss-Kahn.[7]

In 2006 Piketty became the first head of the Paris School of Economics, which he helped set up.[8] He left after a few months to serve as an economic advisor to Socialist Party candidate Ségolène Royal during the French presidential campaign.[9][10] Piketty resumed teaching at the EHESS and Paris School of Economics in 2007.[11]

He is a columnist for the French newspaper Libération, and occasionally writes op-eds for Le Monde.

In April 2012, Piketty co-authored along with 42 colleagues an open letter in support of then-PS candidate for the French presidency François Hollande.[12] Hollande won the contest against the incumbent Nicolas Sarkozy in May of that year.

In 2013, Piketty won the biennial Yrjö Jahnsson Award, for the economist under age 45 who has "made a contribution in theoretical and applied research that is significant to the study of economics in Europe."[13]

Research[edit]

Piketty specializes in economic inequality, taking a historic and statistical approach.[14][15] His work looks at the rate of capital accumulation in relation to economic growth over a two hundred year spread from the nineteenth century to the present. His novel use of tax records enabled him to gather data on the very top economic elite, who had previously been understudied, and to ascertain their rate of accumulation of wealth and how this compared to the rest of society and economy. His most recent book, Capital in the Twenty-First Century, relies on economic data going back 250 years to show that an ever-rising concentration of wealth is not self-correcting. To address this problem, he proposes redistribution through a global tax on wealth.[3][16]

Study of long term economic inequalities[edit]

A research project on high incomes in France led to the book Les hauts revenus en France au XXe (High incomes in France in the 20th Century; Grasset, 2001), which was based on survey of statistical series covering the whole of the 20th century, built from data from the fiscal services (particularly income tax declarations). He extended this analysis in his immensely popular book Le Capital au XXIe siècle (Capital in the Twenty-First Century).

Survey on the evolution of inequalities in France[edit]

Piketty's work shows that differences in earnings dropped sharply during the 20th century in France, mostly after World War II. He argues that this was due to a decrease in estate inequalities, while wage inequalities remained stable. The shrinking inequality during this period, Piketty says, resulted from a highly progressive income tax after the war, which upset the dynamics of estate accumulation by reducing the surplus money available for saving by the wealthiest.[citation needed]

The normative conclusion Piketty draws is that a tax cut and thus a decrease in the financial contribution to society of the wealthy that has been happening in France since the late 1990s will assist in the rebuilding of the earlier large fortunes of the rentier class. This trend will lead to the rise of what he calls patrimonial capitalism, in which a few families control most of the wealth.[17]

Through a statistical survey, Piketty also showed that the Laffer effect, which claims that high marginal tax rates on top incomes are an incentive for the rich to work less, was probably negligible in the case of France.[18]

Comparative work[edit]

Piketty has done comparative work on inequality in other developed countries. In collaboration with other economists, particularly Emmanuel Saez, he built a statistical series based on a similar method used in his studies of France. This research led to reports on the evolution of inequalities in the USA,[19] and on economic dynamics in the English-speaking world and continental Europe.[20]

The surveys found that following World War II, after initially undergoing a decrease in economic inequality similar to that in continental Europe, English-speaking countries have, over the past 30 years, experienced increasing inequalities.

A critic of the Kuznets curve[edit]

Piketty's work has been discussed as a critical continuation of the pioneering work of Simon Kuznets in the 1950s.[21] According to Kuznets, the long-term evolution of earnings inequalities was shaped as a curve (Kuznets curve). Growth started at the beginning of the industrial revolution, and slackened off later due to the reallocation of the labor force from low productivity sectors like agriculture to higher productivity sectors like industry.

According to Piketty, the tendency observed by Kuznets in the early 1950s is not necessarily a product of deep economic forces (e.g., sectoral spillover or the effects of technological progress). Instead, estate values, rather than wage inequalities, decreased, and they did so for reasons that were not specifically economic (for example, the creation of income tax). Consequently, the decrease would not necessarily continue, and in fact, inequalities have grown sharply in the US over the last 30 years, returning to their 1930s level.

Other work[edit]

Besides these surveys, which make up the core of his work, Piketty has published in other areas, often with a connection to economic inequalities. His work on schools, for example, postulates that disparities among different schools, especially class sizes, is a cause for the persistence of inequalities in wages and the economy.[22] He has also published proposals for changes in the French pension system and the French tax system.[23][24] Speaking with Labour leaders in the United Kingdom, he stated that tax rates could be raised above 50% for earnings over one million pounds without it impacting the economy.[25]

Capital in the Twenty-First Century[edit]

Capital in the Twenty-First Century, published in 2014, focuses on wealth and income inequality in Europe and the US since the 18th century. The book's central thesis is that inequality is not an accident but rather a feature of capitalism that can be reversed only through state intervention.[26] The book thus argues that unless capitalism is reformed, the very democratic order will be threatened.[26] The book reached number one on The New York Times bestselling hardcover nonfiction list dated May 18, 2014.[27]

Bibliography[edit]

See also[edit]

References[edit]

  1. ^ Piketty, Thomas. "CV". Retrieved 1 May 2014. 
  2. ^ "Paris School of Economics". Retrieved 19 May 2014. 
  3. ^ a b Paul Krugman, “Why We’re in a New Gilded Age,” The New York Review of Books, May 8, 2014, http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/.
  4. ^ Tanenhaus, Sam (25 April 2014). "Hey, Big Thinker: Thomas Piketty, the Economist Behind ‘Capital in the Twenty-First Century’ Is the Latest Overnight Intellectual Sensation". New York Times. Retrieved 26 April 2014. 
  5. ^ a b "Curriculum vitae". pse.ens.fr. Retrieved 11 January 2014. 
  6. ^ John Cassidy, “Forces of Divergence,” The New Yorker, March 31, 2014.
  7. ^ "Thomas Piketty / France Inter". Franceinter.fr. 2013-10-30. Retrieved 2014-06-16. 
  8. ^ Annie Kahn and Virginie Malingre (2007-02-22). "Les " French economists " font école". Le Monde. Retrieved 2010-09-28. 
  9. ^ "Pourquoi Thomas Piketty quitte la direction de l’Ecole d’Economie de Paris". Observatoire Boivigny. 2007-04-03. 
  10. ^ "Avant qu’il ne soit trop tard". Nouvel Observateur. 2007-03-03. Retrieved 2010-09-28. 
  11. ^ "Thomas Piketty". Paris School of Economics. Retrieved 2014-04-13. 
  12. ^ "« Nous, économistes, soutenons François Hollande » 17 Apr 2012". lemonde.fr. 2012-04-17. Retrieved 2014-06-16. 
  13. ^ "Yrjö Jahnsson Award in Economics". Yrjö Jahnsson Foundation. 
  14. ^ Daniel Henninger (2009-03-12). "The Obama Rosetta Stone". The Wall Street Journal. Retrieved 2010-09-28. 
  15. ^ See in particular his Introduction à la théorie de la redistribution des richesses, Economica, 1994.
  16. ^ An In-depth review by Robert Boyer, leader of the French Régulation school in Régulation Review
  17. ^ John Cassidy, “Forces of Divergence,” The New Yorker, March 31, 2014.
  18. ^ "Les Hauts revenus face aux modifications des taux marginaux supérieurs de l'impôt sur le revenu en France, 1970–1996", Économie et prévision, n° 138-139, 1999.
  19. ^ Piketty, T.; Saez, E. (2003). "Income Inequality in the United States, 1913-1998". The Quarterly Journal of Economics 118: 1. doi:10.1162/00335530360535135.  edit
  20. ^ See particularly, T. Piketty et E. Saez, "The evolution of top incomes : a historical and international perspectives", American Economic Review, vol. 96, n° 2, 2006 et T. Atkinston et T. Piketty (ed.), Top incomes over the twentieth century : a contrast between continental European and English-speaking countries, Oxford University Press, 2007.
  21. ^ "The Kuznets' curve, yesterday and tomorrow", in A. Banerjee, R. Benabou et D. Mookerhee (eds.), Understanding poverty, Oxford university press, 2005.
  22. ^ T. Piketty and M. Valdenaire, L'impact de la taille des classes sur la réussite scolaire dans les écoles, collèges et lycées français – Estimations à partir du panel primaire 1997 et du panel secondaire 1995, Ministère de l'éducation nationale, 2006.
  23. ^ A. Bozio and T. Piketty, Pour un nouveau système de retraite : des comptes individuels de cotisations financés par répartition, Edition de l'ENS rue d'Ulm, collection du CEPREMAP n°14, 2008.
  24. ^ Camille Landais, Thomas Piketty and Emmanuel Saez, Pour une révolution fiscale, ed. Le Seuil, 2011
  25. ^ Andrew Sparrow, Thomas Piketty interviewed by Stewart Wood: Politics live blog, The Guardian, 16 June 2014.
  26. ^ a b Ryan Cooper (March 25, 2014). "Why everyone is talking about Thomas Piketty's Capital in the Twenty-First Century". The Week. 
  27. ^ "Best Sellers". Retrieved 22 May 2014. 

External links[edit]