Making Progress
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Bibliographic details
- Authors: ERA DABLA-NORRIS
- Published: July 19, 2022
Overview and context
- Content type: Book Review of Thomas Piketty, A Brief History of Equality, Translated by Steven Rendall; Belknap Press, Cambridge, MA, 2022, 274 pp., $27.95.
- Author of review: ERA DABLA-NORRIS, deputy director in the IMF’s Fiscal Affairs Department.
- Publication: F&D Magazine, September 2022. Less than a minute(0 words) Read.
- Central thesis: Piketty presents a surprisingly optimistic account of human progress toward equality while emphasizing that the path involves revolutions, struggles, economic crises, liberations, injustices, and regressions—the “turning points where social conflicts are crystalized and power relationships are redefined.”
Historical findings: the “great redistribution” (1914–1980)
- The two world wars and the Great Depression provide the backdrop for what Piketty terms the “great redistribution,” a dramatic reduction in income and wealth inequalities across much of the Western world between 1914 and 1980.
- Drivers of the redistribution:
- Rise of the welfare state that boosted equality of access to education and health care, transportation, old-age pensions, and insurance.
- Progressive taxation of income and wealth that lowered the massive concentration of wealth and economic power at the top.
- Universal suffrage and electoral competition, supported by an independent press and the labor union movement.
- Liquidation of colonial assets and cancellation of public debts accumulated during the interwar periods, which freed up resources for reconstruction and redistribution.
- Revenue mobilization change highlighted:
- From less than 10 percent of national income in 1910 to between 30 and 40 percent by the century’s middle decades.
- Piketty labels this shift an “anthropological revolution” occurring with the gradual erosion of exclusive control by dominant political classes.
Recent trends and causes of renewed inequality (post-1980s)
- Since the 1980s there has been sharply rising concentration of incomes and wealth and persistence of inequity in all its forms.
- Identified contributors:
- Financial liberalization.
- Deregulation.
- Loopholes in the international tax system.
- These factors have favored the largest fortunes, to the detriment of others including in the global South.
- Political economy implication: Increasing coalescence of political power and economic resources.
Proposed solutions and policy recommendations
- Return to greater fiscal progressivity:
- Significantly steeper income tax rates on high earners.
- A global wealth tax on the well-off.
- Social and fiscal policies:
- Basic income programs.
- Cancellation of debts.
- A welfare state that extends beyond national borders.
- Political and institutional reforms:
- Publicly financed elections.
- Worker involvement in the management of large enterprises.
- Revision of global treaties to address climate change and the unequal distribution of wealth.
- Piketty’s perspective: Past experience offers hope that “a profound transformation of the world economic system” is possible.
Key quotes and terminology preserved
- “turning points where social conflicts are crystalized and power relationships are redefined.”
- “great redistribution.”
- “anthropological revolution.”
- “a profound transformation of the world economic system.”
F&D Magazine — Making Progress, September 2022. Review by ERA DABLA-NORRIS.
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- Making Progress