real-world economics review, issue no. 103
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Book Review
Thomas Picketty
A Brief History of Equality
Cambridge, Belknap Press, 288 pages
ISBN 978-0674273559
Junaid Jahangir [MacEwan University, Canada]
Copyright: Junaid Jahangir, 2023
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The issue of inequality has received attention from top economists, whose voices have been
projected through the book edited by Blanchard and Rodrik (2021). The editors make a strong
case by arguing that economists should be at the forefront of combating inequality instead of
(
(
emphasizes addressing inequality as a pressing issue, stating that the Top 1% instigate
narratives in their favour through think tanks and policy institutes. He proposes policies to
combat inequality including guaranteed annual income, raising the top tax rates, and supporting
higher wages. However, Piketty seems to have had the greatest impact on highlighting the
issue of inequality, especially in mainstream newspapers, where his work has been challenged
(Grisold and Theine, 2020). Piketty (2021) counters the mainstream, arguing that if we keep
stating that it is impossible to make the richest individuals pay, we run the risk of future
d
by the well-
(
Piketty (2022) sustains this line of thought by providing an abridged reflection of his voluminous
work over the last two decades. In line with Earle, Moran, and Ward-Perkins (2017), he states
(
loitation of natural
(
existing institutions that stoke inequality and oppression, it is much harder to agree on
(
in terms of combating inequality, he highlights
access to education and healthcare, progressive taxes and wealth redistribution, and power
(
economic issues to experts, links capitalism with exploitation, and supports access to education
and healthcare, progressive taxes and wealth redistribution, and power sharing with firm
employees to combat inequality.
In Chapter 1, he critiques the concept of the GDP, stating that it does not account for the
depletion of natural resources or the inequality of income distribution and that even measures
that account for them are problematic, as they provide the impression that damage can be
(
-24). He adds that a majority of those who contribute the
greatest to carbon emissions reside in North America, whereas a majority of those who
contribute the least reside in Sub-Saharan Africa and South Asia where they experience the
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brunt of global warming (p. 25). By highlighting this differential impact of global warming, he
argues that addressing climate change necessitates combating inequality (p. 26). Finally, he
advises against the use of like the indices Gini coefficient and instead favours measures like
the income proportion that goes to the bottom 50% or the top 1% (p. 29). Overall, he critiques
measures that give the impression that damage can be balanced by money, indices like the
Gini coefficient, the inequality in the impact of global warming, and argues that addressing
climate change necessitates combating inequality.
In Chapter 2, he states that while the wealth of the middle class is concentrated in housing, the
rich also have financial assets and that access to such resources allows the latter to influence
politics, media, and think tanks to achieve favourable policies (p. 39-40). In Chapter 3, he states
that the prescriptions of Adam Smith to uphold property rights, keep low taxes, and have
balanced budgets were followed more by China than the U.K. in the 18th century (p. 52). This
is because the latter accumulated significant public debt for being in a perpetual state of war
and imposed taxes that accounted for 6% to 8% of the national income, which facilitated military
innovations and colonial domination (p. 52-55). On free trade, he states that it was only after
developing comparative advantage in the textile industry by banning imports of Indian textiles
in the 18th century that the U.K. pushed towards free trade and that the same protectionist
strategy was followed by Japan in the 19 th century, South Korea and Taiwan in the mid 20th
century, and China in the late 20th century (p. 58, 59). He adds that free trade discourse allows
advanced economies to make developing countries dependent on them, as in the case of China
that has made several Asian and African countries dependent on it (p. 59).
Generally, he reiterates that the wealth in western economies has been built on slavery,
colonialism, and extraction of natural resources (p. 48-49). Continuing with this line of thought
in Chapter 4, he highlights that reparations for slavery were paid to slaveholders and not slaves
and that this payment was financed by public debt in the U.K. (p. 68, 76). Similarly, in the next
chapter, he states that the French Revolution, while eliminating the privileges of the nobility,
retained their property rights, as they were paid about 15% of the national income financed by
taxes and public debt (p. 97, 99). Moreover, he states that reparations alone are not enough
and that the damage of colonialism should be comprehensively addressed by reducing
inequality through ensuring equitable access to education, employment, and property (p. 94).
In this regard, he proposes the idea that every citizen on the planet should have access to tax
(
emphasizes the impact of the wealthy on extracting favourable policies, questions the
prescriptions of low taxes, balanced budgets, and free trade that the colonial powers avoided,
and proposes equitable access to educa
In Chapter 5, he emphasizes the co-management system where half the seats in the board of
directors belong to employee representatives, as they are inve
-term
viability in comparison to shareholders (p. 113-114). In Chapter 6, he states that inequality was
reduced in the Western world between 1914 and 1980 through progressive taxes on income
and inheritance, and the welfare state that invested in education, healthcare, pensions, public
transportation, and employment insurance (p. 121-122), He highlights that confiscatory tax
rates of 80% to 90% not only compel the wealthy to curb their conspicuous consumption but
also create conditions against generous remunerations of top executives (p. 137-139). He adds
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that there is not much of a relationship between high executive compensation and their
economic performance and that their exorbitant compensation has a negative impact on the
salaries of the workers below them (p. 139). Furthermore, he justifies progressive taxes by
and equality that lead to development and not private property and inequality (p. 139). Overall,
he highlights addressing income and wealth inequality through public investment in education
and healthcare, the co-management system in firms, and progressive confiscatory taxes, which
he justifies by arguing that such rates curb conspicuous consumption, that they do not impede
productivity and innovation, that exorbitant executive compensation is not connected to
economic performance, and that such compensation has a negative impact on the salaries of
workers.
In Chapter 7, h
(
alternative of decentralized, democratic, and participatory socialism based on confiscatory tax
rates, having employees on board of directors, and the provision of education and healthcare
(
-157, 165). Additionally, he proposes the idea of minimal
inheritance for all funded by progressive wealth and inheritance t
(
socialism and instead supports democratic, decentralized, and participatory socialism that is
based on confiscatory tax rates, having employees on board of directors, the provision of
education and healthcare, basic income, guaranteed employment, and inheritance for all
funded by progressive wealth and inheritance taxes.
In Chapter 8, he states that encouraging women to pursue the same lifestyle as men, who earn
high salaries but have limited time for family and civic participation and who contribute to
consumerism and environmental damage, is not a solution to the issue of discrimination (p.
188-189). In Chapter 9, he projects the Washington Consensus that rests on budget austerity,
liberalization, deregulation, and free flow of capital as neocolonialism (p. 207-208). He adds
that tariffs can be justifiably reduced if they are replaced by wealth taxes, higher taxes on top
incomes, and corporate taxes on multinational companies (p. 208). Additionally, he reiterates
that world citizens should have access to healthcare and education funded by taxes on
multinational companies and billionaires, as the wealth of the rich would not exist without the
labour and resources of the poor countries (p. 215, 216). Overall, he critiques addressing
discrimination through strategies that instigate consumerism and environmental damage,
rejects budget austerity, liberalization, deregulation, and free flow of capital, and instead
supports universal access to healthcare and education funded by taxes on multinational
companies and billionaires.
his proposition of democratic, decentralized, ecological, and participatory socialism (p. 226).
Additionally, he states that the only limit to monetary policy is inflation and that it can be used
to achieve full employment, reduce inequality, and save the planet, but that it has often fuelled
higher prices in the stock and the real estate markets, thereby adding to the wealth of the rich
(p. 240-241). Overall, he critiques Chinese socialism, highlights the limits of monetary policy,
and upholds his vision of participatory socialism that rests on progressive taxes, power sharing
in firms, guaranteed employment, access to healthcare and education, and inheritance for all
(p. 237).
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To recapitulate, Piketty argues against ceding economic issues to experts and argues that
addressing climate change necessitates combating inequality. He links capitalism with
resources, and questions the neoliberal prescriptions of low taxes, balanced budgets, free
trade, budget austerity, liberalization, deregulation, and free flow of capital. He critiques both
state socialism and Chinese socialism, and instead supports democratic, decentralized, and
participatory socialism that is based on confiscatory tax rates, having employees on board of
directors, the provision of universal education and healthcare, basic income, guaranteed
employment, and inheritance for all to address income and wealth inequality. Overall, he
favours progressive wealth and inheritance taxes, and taxes on multinational companies and
billionaires to allow all the citizens of the world access to education and healthcare, based on
the argument that wealth is collective and that the riches of the wealthy are dependent on the
labour of the poor and the resources of the poor countries. Thus, Piketty offers a narrative that
rejects both capitalism and state socialism and instead upholds a democratic, decentralized,
ecological, and participatory socialism.
References
Blanchard, O., and Rodrik, D. (2021) Combating Inequality. Cambridge: The MIT Press.
Earle, J., Moran, C., and Ward-Perkins, Z. (2017) The Econocracy, Manchester: Manchester University
Press.
Grisold
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inequalities and redistribution policies: The Piketty Case, in: Journal of Economic Issues, 54(4):
1071-1094.
Osberg, L. (2018) The Age of Increasing Inequality, Toronto: Lorimer.
Piketty, T. (2021) Time for Socialism, New Haven and London: Yale University Press.
Author contact: junaid@ualberta.ca
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SUGGESTED CITATION:
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A Brief History of Equality real-world economics review, issue no.
103, 31 March 2023, pp. 128-131, http://www.paecon.net/PAEReview/issue103/Jahangir_Review
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