WEBVTT 00:00:00.080 --> 00:00:02.940 We are looking at a stack of sources today that 00:00:02.940 --> 00:00:06.559 center on a figure who manages to be, well, incredibly 00:00:06.559 --> 00:00:11.119 polarizing while primarily dealing with spreadsheets. 00:00:11.140 --> 00:00:12.720 Yeah, that's a good way to put it. It's pretty 00:00:12.720 --> 00:00:15.199 rare that an economist breaks out of the academic 00:00:15.199 --> 00:00:17.760 bubble, you know, to become a household name. 00:00:17.980 --> 00:00:20.339 It is. But when they do, it usually signals a 00:00:20.339 --> 00:00:22.780 pretty major shift in how we're starting to understand 00:00:22.780 --> 00:00:25.660 the world. Right. And usually economics is kind 00:00:25.660 --> 00:00:28.600 of... confined to the business pages or these 00:00:28.600 --> 00:00:31.559 really dense policy journals. But today we are 00:00:31.559 --> 00:00:34.500 dissecting the work and the life of Thomas Piketty. 00:00:34.820 --> 00:00:37.340 And the reason this deep dive is so necessary. 00:00:37.560 --> 00:00:39.740 Yeah. It isn't just because he wrote a bestseller. 00:00:39.880 --> 00:00:42.100 No, not at all. It's because he fundamentally 00:00:42.100 --> 00:00:45.060 altered the vocabulary we use to talk about wealth 00:00:45.060 --> 00:00:47.179 and inequality. It's interesting you say vocabulary. 00:00:47.460 --> 00:00:49.740 I mean, before Piketty's capital in the 21st 00:00:49.740 --> 00:00:52.820 century hit the shelves in 2013, the conversation 00:00:52.820 --> 00:00:57.159 about inequality was often. Well, it was anecdotal. 00:00:57.159 --> 00:00:59.460 It was a feeling. It was about feeling like the 00:00:59.460 --> 00:01:02.920 system was rigged. Piketty just drops this this 00:01:02.920 --> 00:01:06.340 800 page doorstopper of a book that essentially 00:01:06.340 --> 00:01:10.659 says here. Here are three centuries of tax receipts 00:01:10.659 --> 00:01:13.200 that prove you are right. It was a moment where 00:01:13.200 --> 00:01:15.299 data just completely caught up with intuition. 00:01:16.120 --> 00:01:17.840 And we need to be clear about the scale of this. 00:01:17.900 --> 00:01:19.900 He didn't just write a popular book. No. I mean, 00:01:19.920 --> 00:01:22.659 he became a Clarivate Citation Laureate in 2023, 00:01:22.939 --> 00:01:25.159 which a lot of people see that as sort of the 00:01:25.159 --> 00:01:28.159 waiting room for the Nobel Prize. He's won the 00:01:28.159 --> 00:01:30.459 Euro Johnson Award. But at the end of the day, 00:01:30.519 --> 00:01:33.040 the accolades matter less than the mission he's 00:01:33.040 --> 00:01:35.859 on. And that mission, based on all the materials 00:01:35.859 --> 00:01:38.700 we have in front of us, seems to be a total deconstruction 00:01:38.700 --> 00:01:41.239 of the idea that capitalism just naturally balances 00:01:41.239 --> 00:01:43.719 itself out. Exactly. The sources suggest he's 00:01:43.719 --> 00:01:46.680 arguing that... That inequality is a feature. 00:01:46.739 --> 00:01:49.260 It's not a bug of the system. But I want to move 00:01:49.260 --> 00:01:51.980 beyond just the headlines here. We need to understand 00:01:51.980 --> 00:01:54.819 the man, the specific mechanism of his theory, 00:01:54.939 --> 00:01:58.019 that famous larger dollars and maybe most importantly, 00:01:58.159 --> 00:02:00.260 his diagnosis of our current political dysfunction. 00:02:00.560 --> 00:02:03.540 And we also have to look at the criticism because, 00:02:03.640 --> 00:02:05.000 you know, when you propose something like a global 00:02:05.000 --> 00:02:08.240 wealth tax and. you claim the rich are basically 00:02:08.240 --> 00:02:10.259 devouring the future, you're going to make some 00:02:10.259 --> 00:02:12.139 enemies. For sure. And not just on the right. 00:02:12.180 --> 00:02:14.759 There's a lot of serious academic pushback on 00:02:14.759 --> 00:02:16.680 his methodology that we really need to unpack. 00:02:17.000 --> 00:02:18.840 Okay, so let's start at the beginning, the origin 00:02:18.840 --> 00:02:21.580 story. Because when you look at his biography, 00:02:21.900 --> 00:02:24.979 there's a paradox right at the start. There really 00:02:24.979 --> 00:02:28.680 is. He was born in 1971 in Clichy, France. His 00:02:28.680 --> 00:02:30.560 parents were involved with the Trotskyist group 00:02:30.560 --> 00:02:34.800 and were active in the May 1968 protests. Now, 00:02:34.860 --> 00:02:37.479 for those who aren't, you know, steeped in French 00:02:37.479 --> 00:02:40.699 history. May 68 was the closest Western Europe 00:02:40.699 --> 00:02:43.639 came to a full blown revolution in the post -war 00:02:43.639 --> 00:02:46.139 era. It was a massive, massive event. It was 00:02:46.139 --> 00:02:48.280 a huge upheaval. I mean, you had students and 00:02:48.280 --> 00:02:50.699 workers uniting. The entire country was paralyzed 00:02:50.699 --> 00:02:52.900 by strikes. De Gaulle actually fled the country 00:02:52.900 --> 00:02:56.259 for a bit. Right. So Piketty is born into this. 00:02:56.780 --> 00:03:00.280 this milieu where the default assumption was 00:03:00.280 --> 00:03:02.500 that capitalism was on its last legs. The revolution 00:03:02.500 --> 00:03:05.080 was just around the corner. So you would absolutely 00:03:05.080 --> 00:03:08.699 expect him to inherit that specific brand of 00:03:08.699 --> 00:03:11.199 anti -capitalist fire. You'd think so. But he 00:03:11.199 --> 00:03:13.400 didn't. And this is the pivot point I really 00:03:13.400 --> 00:03:16.580 want to drill into. In 1991, just as the Soviet 00:03:16.580 --> 00:03:19.419 Union is collapsing, a 20 -year -old Thomas Piketty 00:03:19.419 --> 00:03:22.400 takes a trip. A trip to Moscow. To Moscow. And 00:03:22.400 --> 00:03:25.159 this trip is absolutely crucial to understanding 00:03:25.159 --> 00:03:28.080 him. 1991 was the end of the line for the Soviet 00:03:28.080 --> 00:03:30.919 experiment. So when Pagetti arrived, he wasn't 00:03:30.919 --> 00:03:33.759 seeing the, you know, the glory of the worker 00:03:33.759 --> 00:03:36.520 state. Not at all. He was seeing the wreckage, 00:03:36.599 --> 00:03:39.199 empty shops, the gray market everywhere, the 00:03:39.199 --> 00:03:43.460 absolute lack of basic goods. He's spoken about 00:03:43.460 --> 00:03:46.180 this pretty viscerally. He saw firsthand that 00:03:46.180 --> 00:03:48.560 without private property and without market mechanisms, 00:03:48.900 --> 00:03:51.340 basic human needs were simply not being met. 00:03:51.629 --> 00:03:55.409 And it's a really stark contrast to the romanticized 00:03:55.409 --> 00:03:57.449 version of socialism his parents' generation 00:03:57.449 --> 00:04:00.009 might have debated in Parisian cafes. Well, completely. 00:04:00.110 --> 00:04:02.750 For the 68 generation, the USSR was sometimes 00:04:02.750 --> 00:04:05.189 this abstract ideal or at least a geopolitical 00:04:05.189 --> 00:04:07.250 counterweight. For Piketty, you know, standing 00:04:07.250 --> 00:04:09.729 in a grid line in Moscow, it was a practical, 00:04:09.930 --> 00:04:13.939 undeniable failure. He came back to France, basically 00:04:13.939 --> 00:04:16.420 inoculated against that kind of anti -capitalism. 00:04:16.459 --> 00:04:19.879 He became a staunch believer in markets, in private 00:04:19.879 --> 00:04:23.060 property, and the necessity of capitalism to 00:04:23.060 --> 00:04:25.339 generate wealth. So just to be crystal clear, 00:04:25.480 --> 00:04:28.339 the guy who is often painted by his critics, 00:04:28.420 --> 00:04:30.579 especially in the U .S., as some kind of Marxist, 00:04:30.620 --> 00:04:33.120 he actually started his career thinking, thank 00:04:33.120 --> 00:04:36.269 God for capitalism. Precisely. He views the market 00:04:36.269 --> 00:04:38.790 as a necessary tool, a tool for personal freedom. 00:04:39.170 --> 00:04:42.370 His critique, which develops much later, isn't 00:04:42.370 --> 00:04:44.290 that we should abolish markets. It's that markets 00:04:44.290 --> 00:04:47.689 have this mechanical tendency to concentrate 00:04:47.689 --> 00:04:50.629 wealth that eventually undermines the very democracy 00:04:50.629 --> 00:04:52.850 that supports them. But back in the early 90s. 00:04:52.850 --> 00:04:54.769 In the early 90s, he was all about the math of 00:04:54.769 --> 00:04:56.750 the market. And he was clearly in a hurry, too. 00:04:56.850 --> 00:04:59.089 I mean, he enters the École Normale Supérieure 00:04:59.089 --> 00:05:01.569 at 18, which... For listeners, it's basically 00:05:01.569 --> 00:05:04.170 the training ground for the entire French intellectual 00:05:04.170 --> 00:05:07.550 elite. And he finishes his Ph .D. at 22. 22 years 00:05:07.550 --> 00:05:09.589 old. It's just it's incredible. Most people are 00:05:09.589 --> 00:05:12.870 just finishing their undergrad degree. He wrote 00:05:12.870 --> 00:05:15.550 his thesis at the London School of Economics 00:05:15.550 --> 00:05:18.970 and E .S. And it wins the French Economics Association's 00:05:18.970 --> 00:05:22.029 award for best thesis of the year. And then he 00:05:22.029 --> 00:05:24.819 jumps straight to MIT. Yep. Massachusetts Institute 00:05:24.819 --> 00:05:28.120 of Technology, the absolute pinnacle of the American 00:05:28.120 --> 00:05:30.519 economics establishment. It really is. He was 00:05:30.519 --> 00:05:33.500 an assistant professor there from 1993 to 1995. 00:05:33.899 --> 00:05:36.220 You have to picture this. He was teaching students 00:05:36.220 --> 00:05:39.379 who were practically his own age. But this is 00:05:39.379 --> 00:05:41.660 where the second pivot happens. OK. He's at MIT. 00:05:41.879 --> 00:05:44.379 He's on the tenure track. He's basically made 00:05:44.379 --> 00:05:47.300 it in the world of American academia. And he 00:05:47.300 --> 00:05:50.290 hates it. Why? That's the dream job for an economist. 00:05:50.529 --> 00:05:52.790 He found American economics to be too obsessed 00:05:52.790 --> 00:05:55.170 with these abstract mathematical models. There 00:05:55.170 --> 00:05:57.810 was a tendency, and this is still a big debate 00:05:57.810 --> 00:06:00.410 in economics today, to treat the economy like 00:06:00.410 --> 00:06:02.689 a physics problem. A physics problem, how so? 00:06:02.870 --> 00:06:06.089 You build a model, you assume these perfectly 00:06:06.089 --> 00:06:08.870 rational actors, and then you assume your model 00:06:08.870 --> 00:06:12.209 perfectly describes reality. Piketty felt it 00:06:12.209 --> 00:06:14.730 was completely disconnected from history, from 00:06:14.730 --> 00:06:17.509 the messy reality of politics and social class. 00:06:17.980 --> 00:06:20.019 So he felt they were mistaking the map for the 00:06:20.019 --> 00:06:22.300 territory. That's a perfect way to put it. Exactly. 00:06:23.040 --> 00:06:25.360 He wanted to look at what actually happened in 00:06:25.360 --> 00:06:28.040 the past, not just what a model said should happen 00:06:28.040 --> 00:06:30.180 based on its own assumptions. So what did he 00:06:30.180 --> 00:06:33.660 do? So he packed his bags. He went back to France 00:06:33.660 --> 00:06:37.060 to join the CNRS and later ESS. He wanted to 00:06:37.060 --> 00:06:39.620 do social science, not just pure math. And this 00:06:39.620 --> 00:06:41.560 return to France wasn't just a retreat, right? 00:06:41.600 --> 00:06:44.279 It was a strategic move. He helps build the Paris 00:06:44.279 --> 00:06:47.339 School of Economics in 2006. He did. He was trying 00:06:47.339 --> 00:06:49.379 to create an institution that would do economics 00:06:49.379 --> 00:06:51.839 the way he thought it should be done, grounded 00:06:51.839 --> 00:06:54.680 in real history and massive data sets. Which 00:06:54.680 --> 00:06:57.379 brings us directly to the methodology. And this 00:06:57.379 --> 00:06:59.519 is the part that, for me, really separates Piketty 00:06:59.519 --> 00:07:02.000 from a lot of his predecessors. Before Piketty 00:07:02.000 --> 00:07:04.060 and his collaborators like Emmanuel Saez came 00:07:04.060 --> 00:07:07.300 along, how did we even know how rich the rich 00:07:07.300 --> 00:07:11.540 were? I assume we asked them. Or maybe looked 00:07:11.540 --> 00:07:14.060 at census data or something. We relied heavily 00:07:14.060 --> 00:07:16.519 on surveys. You call people up or you send them 00:07:16.519 --> 00:07:19.379 a questionnaire. But there's a massive, massive 00:07:19.379 --> 00:07:21.699 problem with that when you're trying to study 00:07:21.699 --> 00:07:23.720 the ultra wealthy. Well, first off, I imagine 00:07:23.720 --> 00:07:25.680 they don't answer the phone. Right. That's problem 00:07:25.680 --> 00:07:28.579 number one. And secondly, statistically speaking, 00:07:28.980 --> 00:07:32.420 the super rich are outliers. If you survey 10 00:07:32.420 --> 00:07:35.939 ,000 people, you might not catch a single billionaire. 00:07:36.220 --> 00:07:38.800 That makes sense. And if you do, they might underreport 00:07:38.800 --> 00:07:41.360 their income. or not even know their full income. 00:07:41.420 --> 00:07:44.019 It's so complex. Surveys are great for understanding 00:07:44.019 --> 00:07:46.459 the middle class. They are terrible for understanding 00:07:46.459 --> 00:07:50.139 the top 0 .1%. It's what statisticians call the 00:07:50.139 --> 00:07:53.240 fat tail problem. You miss the extreme end of 00:07:53.240 --> 00:07:55.600 the distribution. So Piketty decided to look 00:07:55.600 --> 00:07:57.680 at the one place where you can't really hide. 00:07:58.079 --> 00:08:00.600 or at least where it's much, much harder to hide. 00:08:00.720 --> 00:08:03.180 Tax records. But we have to appreciate the sheer 00:08:03.180 --> 00:08:05.279 grunt work involved here. This wasn't a matter 00:08:05.279 --> 00:08:08.300 of, you know, downloading a CSV file from a government 00:08:08.300 --> 00:08:11.139 website. He was looking for long -run historical 00:08:11.139 --> 00:08:14.699 trends. This meant going into the archives of 00:08:14.699 --> 00:08:17.259 the French Ministry of Finance, dealing with 00:08:17.259 --> 00:08:19.620 handwritten ledgers from the early 20th century. 00:08:20.240 --> 00:08:22.459 Even the late 19th century. He was literally 00:08:22.459 --> 00:08:25.779 digitizing the analog history of wealth. He and 00:08:25.779 --> 00:08:28.600 his team, including incredible people like Facundo 00:08:28.600 --> 00:08:31.439 Alvarado and the late Anthony Atkinson, they 00:08:31.439 --> 00:08:33.639 practically reconstructed the national accounts 00:08:33.639 --> 00:08:36.399 of France, the U .S., and the U .K. from scratch. 00:08:37.000 --> 00:08:39.779 They painstakingly stitched together centuries 00:08:39.779 --> 00:08:43.139 of data to see how the top incomes evolved over 00:08:43.139 --> 00:08:46.879 time. So it's this massive, historical, data 00:08:46.879 --> 00:08:49.289 -driven project. Huge. And when they finally 00:08:49.289 --> 00:08:51.289 crunched these numbers, particularly for France, 00:08:51.450 --> 00:08:54.009 what was the aha moment? What was the big reveal? 00:08:54.269 --> 00:08:56.669 The aha moment was that the story we had all 00:08:56.669 --> 00:08:58.289 been telling ourselves about the 20th century 00:08:58.289 --> 00:09:00.809 was wrong, just fundamentally wrong. What was 00:09:00.809 --> 00:09:03.210 the old story? The prevailing theory, which came 00:09:03.210 --> 00:09:05.590 from Simon Kuznets back in the 1950s, was something 00:09:05.590 --> 00:09:08.639 called the Kuznets curve. The idea was that as 00:09:08.639 --> 00:09:11.639 a country industrializes, inequality goes up 00:09:11.639 --> 00:09:14.279 for a while. But then as the economy matures 00:09:14.279 --> 00:09:16.840 and gets more advanced, inequality naturally 00:09:16.840 --> 00:09:19.659 comes down. It follows a kind of bell curve shape. 00:09:19.899 --> 00:09:21.919 That's a very comforting narrative. Oh, it's 00:09:21.919 --> 00:09:23.799 the most comforting narrative. Stick with capitalism. 00:09:23.980 --> 00:09:25.879 It'll all work out. Eventually, the wealth trickles 00:09:25.879 --> 00:09:28.740 down. And the middle class expands. Exactly. 00:09:28.899 --> 00:09:31.960 And Kuznets, to be fair, he looked at the data 00:09:31.960 --> 00:09:37.039 he had from roughly 1913 to 1948 and he saw inequality 00:09:37.039 --> 00:09:39.820 dropping. So he projected that trend forward. 00:09:39.940 --> 00:09:42.919 But Piketty's data, which went back much further 00:09:42.919 --> 00:09:45.139 and then extended to the present day. You showed 00:09:45.139 --> 00:09:47.080 something different. It showed that the drop 00:09:47.080 --> 00:09:50.179 Kuznets saw wasn't a natural feature of capitalism 00:09:50.179 --> 00:09:53.000 at all. It was an anomaly. It was a massive historical 00:09:53.000 --> 00:09:56.059 accident caused by the incredible chaos of the 00:09:56.059 --> 00:09:58.980 mid -20th century. You had World War I, the Great 00:09:58.980 --> 00:10:01.919 Depression, World War II. These events destroyed 00:10:01.919 --> 00:10:04.659 capital on a scale we can barely imagine today. 00:10:04.840 --> 00:10:07.460 How so? What do you mean by destroyed capital? 00:10:07.759 --> 00:10:10.440 I mean, factories were bombed to rubble. Foreign 00:10:10.440 --> 00:10:12.980 investments were wiped out overnight. Hyperinflation 00:10:12.980 --> 00:10:15.980 destroyed cash savings. And then after the wars, 00:10:16.179 --> 00:10:19.379 governments had to impose these massive progressive 00:10:19.379 --> 00:10:22.340 taxes to pay for rebuilding. So the relative 00:10:22.340 --> 00:10:25.080 equality of the 1950s and 60s, that sort of golden 00:10:25.080 --> 00:10:28.850 age, it wasn't because the market worked. perfectly 00:10:28.850 --> 00:10:32.299 no it was because the world blew up that is Piketty's 00:10:32.299 --> 00:10:34.759 Dark, and I think a very compelling conclusion. 00:10:35.279 --> 00:10:37.539 Once those shocks wore off and the tax rates 00:10:37.539 --> 00:10:39.779 were lowered, starting in the 80s and 90s, inequality 00:10:39.779 --> 00:10:41.659 started marching right back up. To where it was 00:10:41.659 --> 00:10:43.799 before. Right back up to the levels you saw in 00:10:43.799 --> 00:10:45.860 the Belle Epoque in France or the Gilded Age 00:10:45.860 --> 00:10:47.940 in America. I mean, look at his data for France. 00:10:48.120 --> 00:10:51.740 By 2012, the top 10 % were taking more than half 00:10:51.740 --> 00:10:54.440 of the country's total income, a level unseen 00:10:54.440 --> 00:10:56.700 since the data collection began over a century 00:10:56.700 --> 00:10:59.379 ago. This leads us directly to the formula, the 00:10:59.379 --> 00:11:01.259 one that became the tagline for the entire book. 00:11:01.600 --> 00:11:05.399 $3. I want to pressure test this because it sounds 00:11:05.399 --> 00:11:07.940 so simple, but the implications are just huge. 00:11:08.139 --> 00:11:11.120 So $2 is the rate of return on capital and $2 00:11:11.120 --> 00:11:13.899 is the growth of the economy. Correct. So $2 00:11:13.899 --> 00:11:16.139 captures everything you earn from owning stuff. 00:11:16.659 --> 00:11:18.580 Dividends from stocks, rent from your properties, 00:11:18.740 --> 00:11:21.139 interest on bonds, capital gains when you sell 00:11:21.139 --> 00:11:23.299 an asset. Okay, so money from money. Money from 00:11:23.299 --> 00:11:25.990 money. And Duda Lauder represents the growth 00:11:25.990 --> 00:11:29.149 of income and outflow. So basically how much 00:11:29.149 --> 00:11:31.889 wages are rising and how much the overall economy 00:11:31.889 --> 00:11:34.190 is expanding. And the central thesis of the whole 00:11:34.190 --> 00:11:38.090 book is that historically, $2, the return on 00:11:38.090 --> 00:11:40.590 wealth, is almost always higher, the growth of 00:11:40.590 --> 00:11:43.570 wages and the economy. Yes. Piketty estimates 00:11:43.570 --> 00:11:46.549 that over the long, long run, the return on capital 00:11:46.549 --> 00:11:50.559 tends to be about 4 % to 5 % per year. Meanwhile, 00:11:50.740 --> 00:11:53.059 economic growth historically hovers somewhere 00:11:53.059 --> 00:11:55.440 around one to one and a half percent. So if I'm 00:11:55.440 --> 00:11:58.379 a worker and my income is tied to two dollars, 00:11:58.639 --> 00:12:01.220 I'm just inching forward year after year. Yeah. 00:12:01.299 --> 00:12:03.820 But if I'm an heir and my income is tied to two 00:12:03.820 --> 00:12:05.740 dollars. We're sprinting. And because of the 00:12:05.740 --> 00:12:08.480 magic of compound interest, that gap just widens 00:12:08.480 --> 00:12:10.779 exponentially over time. If you have a large 00:12:10.779 --> 00:12:12.980 fortune, you only need to reinvest a portion 00:12:12.980 --> 00:12:16.019 of that 5 % return to see your personal wealth 00:12:16.019 --> 00:12:18.059 grow much faster than the economy as a whole. 00:12:18.240 --> 00:12:21.440 Meanwhile, the average worker's wages are barely 00:12:21.440 --> 00:12:24.100 keeping up with inflation if they're lucky. This 00:12:24.100 --> 00:12:27.039 just completely challenges the meritocratic argument, 00:12:27.220 --> 00:12:29.659 doesn't it? The story we tell ourselves. It's 00:12:29.659 --> 00:12:31.820 a direct assault on it. We like to think people 00:12:31.820 --> 00:12:33.860 get rich because they're brilliant or they're 00:12:33.860 --> 00:12:36.659 hardworking innovators. But Piketty is saying 00:12:36.659 --> 00:12:39.820 that past a certain point, you just get rich 00:12:39.820 --> 00:12:43.620 because you're already rich. He calls this patrimonial 00:12:43.620 --> 00:12:46.039 capitalism, the idea that we're returning to 00:12:46.039 --> 00:12:49.179 a society dominated by inherited wealth. He uses 00:12:49.179 --> 00:12:50.860 literature to make this point really effectively. 00:12:51.039 --> 00:12:53.759 He references Jane Austen and Balzac. Right. 00:12:53.860 --> 00:12:55.759 I remember that from the book. In those novels, 00:12:55.879 --> 00:12:58.120 no one talks about making it by getting a good 00:12:58.120 --> 00:13:00.659 job. The only way to live a good life, a comfortable 00:13:00.659 --> 00:13:03.419 life, is to inherit money or marry into it. So 00:13:03.419 --> 00:13:06.480 work is for the peasants. Essentially. And Piketty's 00:13:06.480 --> 00:13:09.279 warning is that we are slowly but surely drifting 00:13:09.279 --> 00:13:12.039 back to that world. He notes that in France, 00:13:12.240 --> 00:13:15.220 the tax cuts since the late 90s are helping to 00:13:15.220 --> 00:13:19.240 rebuild these huge dynastic fortunes. But wait, 00:13:19.340 --> 00:13:21.019 I have to play devil's advocate here for a second. 00:13:21.460 --> 00:13:24.000 Because there was significant pushback on this 00:13:24.000 --> 00:13:26.779 core theory. Specifically, I remember the story 00:13:26.779 --> 00:13:29.519 about Matthew Roggeley, who was a grad student 00:13:29.519 --> 00:13:31.700 at MIT at the time. Oh, yeah, the Roggeley critique. 00:13:31.759 --> 00:13:34.320 That was a big deal. He argued that Piketty's 00:13:34.320 --> 00:13:38.139 data was skewed by one particular asset class. 00:13:38.440 --> 00:13:40.980 Housing. Housing. That's a very, very important 00:13:40.980 --> 00:13:44.039 critique. Roggeley dug into the data and argued 00:13:44.039 --> 00:13:46.399 that if you look closely at the capital that 00:13:46.399 --> 00:13:48.500 has been increasing in value so dramatically, 00:13:48.879 --> 00:13:51.740 it's not really factories or robots or innovative 00:13:51.740 --> 00:13:55.419 software. It's mostly housing. Real estate. So 00:13:55.419 --> 00:13:57.779 the story isn't that capitalists are extracting 00:13:57.779 --> 00:14:00.279 more and more value from workers in the factory. 00:14:00.600 --> 00:14:03.419 It's that homeowners in, say, San Francisco, 00:14:03.639 --> 00:14:06.919 London and Paris have seen their land values 00:14:06.919 --> 00:14:08.980 skyrocket. Right. And that's because of things 00:14:08.980 --> 00:14:12.039 like zoning restrictions and scarcity, not necessarily 00:14:12.039 --> 00:14:14.159 because of some inherent feature of capitalism 00:14:14.159 --> 00:14:17.259 itself. Roggenly's point was that if you strip 00:14:17.259 --> 00:14:20.220 out housing, the droguide dynamic looks much 00:14:20.220 --> 00:14:22.700 less severe. So maybe the problem is bad land 00:14:22.700 --> 00:14:26.519 use policy. You know, NIMB -ism rather than a 00:14:26.519 --> 00:14:28.779 fundamental flaw in the market system. It's a 00:14:28.779 --> 00:14:31.460 powerful counter argument. Now, Piketty, did 00:14:31.460 --> 00:14:34.379 he concede that? What was his response? He acknowledged 00:14:34.379 --> 00:14:37.200 the importance of housing. Absolutely. But he 00:14:37.200 --> 00:14:39.659 argues that for the person who doesn't own property, 00:14:39.919 --> 00:14:43.149 the distinction doesn't really matter much. Whether 00:14:43.149 --> 00:14:45.590 the elite control the factories or they control 00:14:45.590 --> 00:14:47.690 all the apartment buildings, the result is the 00:14:47.690 --> 00:14:51.409 same. A rentier class extracting a larger and 00:14:51.409 --> 00:14:53.610 larger share of income from the working population. 00:14:54.049 --> 00:14:56.889 He would argue that real estate is capital. And 00:14:56.889 --> 00:14:59.210 it functions as a store of value and a source 00:14:59.210 --> 00:15:01.850 of returns, just like stocks or bonds do. That's 00:15:01.850 --> 00:15:03.809 a fair point. I mean, if I'm paying 50 percent 00:15:03.809 --> 00:15:06.470 of my income in rent to a landlord, I don't really 00:15:06.470 --> 00:15:09.009 care if you call it housing scarcity or capital 00:15:09.009 --> 00:15:11.889 accumulation. The effect on my bank account is 00:15:11.889 --> 00:15:14.929 identical. The effect is identical. And this 00:15:14.929 --> 00:15:18.009 growing economic divide, he argues, has spilled 00:15:18.009 --> 00:15:21.509 over into a massive political realignment. And 00:15:21.509 --> 00:15:24.190 this brings us to his 2018 paper on the Brahmin 00:15:24.190 --> 00:15:27.389 left and the merchant right. Yes. This is, in 00:15:27.389 --> 00:15:29.549 my opinion, one of his most brilliant and useful 00:15:29.549 --> 00:15:32.090 sociological insights. It just explains so much. 00:15:32.289 --> 00:15:35.149 I completely agree. It explains the confusion 00:15:35.149 --> 00:15:37.169 so many of us feel when we're looking at election 00:15:37.169 --> 00:15:39.610 maps. I mean, traditionally, the left was the 00:15:39.610 --> 00:15:41.570 party of the workers and the right was the party 00:15:41.570 --> 00:15:43.950 of the rich. Simple. The standard class politics 00:15:43.950 --> 00:15:47.309 model. Yeah. Labor versus capital. But Piketty 00:15:47.309 --> 00:15:50.370 and his team, they crunched voter data from the 00:15:50.370 --> 00:15:53.090 U .S., France and the U .K. over the last 60 00:15:53.090 --> 00:15:56.429 or 70 years. And they found this. dramatic structural 00:15:56.429 --> 00:15:59.330 shift. What exactly changed? The left has been 00:15:59.330 --> 00:16:02.269 captured by the highly educated. It's a total 00:16:02.269 --> 00:16:04.850 reversal. In the 1950s, if you had a university 00:16:04.850 --> 00:16:07.210 degree, you were much more likely to vote conservative 00:16:07.210 --> 00:16:10.309 or Republican. Okay. Today, education is the 00:16:10.309 --> 00:16:12.230 single strongest predictor of voting Democrat, 00:16:12.529 --> 00:16:15.809 labor, or socialist. The left became the party 00:16:15.809 --> 00:16:17.970 of what he calls the Brahmin left. The intellectual, 00:16:18.250 --> 00:16:20.830 the cultural, the credentialed elite. The PhDs, 00:16:20.830 --> 00:16:23.149 the journalists, the tech workers, the media 00:16:23.149 --> 00:16:25.690 class. That's the coalition, right? Meanwhile, 00:16:25.929 --> 00:16:27.809 the right remained the party of the merchant 00:16:27.809 --> 00:16:29.889 right. So the business owners, the investors, 00:16:30.009 --> 00:16:32.870 the wealthy. But the merchant right also started 00:16:32.870 --> 00:16:35.070 picking up the working class voters who felt 00:16:35.070 --> 00:16:37.889 abandoned by this new highly educated Brahmin 00:16:37.889 --> 00:16:40.909 left. This is the deplorables moment in the U 00:16:40.909 --> 00:16:43.590 .S. or the red wall collapsing in the U .K. Exactly. 00:16:43.870 --> 00:16:45.730 The working class looks at the left and sees 00:16:45.730 --> 00:16:48.039 a group of people. living in expensive cities, 00:16:48.279 --> 00:16:51.600 maybe scolding them about cultural issues, and 00:16:51.600 --> 00:16:54.559 they look at the right and see, what do they 00:16:54.559 --> 00:16:56.659 see? Well, they see a party that at least pays 00:16:56.659 --> 00:16:59.600 lip service to their economic anxiety, or perhaps 00:16:59.600 --> 00:17:02.159 more powerfully, shares their cultural resentment 00:17:02.159 --> 00:17:05.460 against the Brahmins. Piketty argues this leaves 00:17:05.460 --> 00:17:08.119 the working class effectively... politically 00:17:08.119 --> 00:17:11.380 homeless. And the two elites, the Brahmins and 00:17:11.380 --> 00:17:14.000 the merchants, are just fighting each other for 00:17:14.000 --> 00:17:16.079 power. They're fighting over power, but neither 00:17:16.079 --> 00:17:18.619 one truly represents the economic interests of 00:17:18.619 --> 00:17:21.160 the bottom 50%. The interests of the working 00:17:21.160 --> 00:17:24.180 and lower middle classes are just off the table. 00:17:24.319 --> 00:17:26.720 So we have a multiple elite system. It's the 00:17:26.720 --> 00:17:29.019 degree holders versus the account holders. That's 00:17:29.019 --> 00:17:31.680 the dynamic. And Piketty warns that this is incredibly 00:17:31.680 --> 00:17:35.150 dangerous because it stabilizes inequality. The 00:17:35.150 --> 00:17:37.569 Brahmins are generally fine with inequality as 00:17:37.569 --> 00:17:40.130 long as it's meritocratic, you know, based on 00:17:40.130 --> 00:17:43.109 education and degrees. And the merchants are 00:17:43.109 --> 00:17:45.349 fine with inequality because it preserves their 00:17:45.349 --> 00:17:48.109 capital. So nobody is actually fighting for broad 00:17:48.109 --> 00:17:50.529 based redistribution anymore. No one with real 00:17:50.529 --> 00:17:54.529 power. Which segues perfectly into his 2019 book 00:17:54.529 --> 00:17:57.150 Capital and Ideology. Because if the numbers 00:17:57.150 --> 00:18:00.150 are so stark, if $2 really is greater than $2 00:18:00.150 --> 00:18:02.829 and the system is rigged. Why aren't people, 00:18:02.910 --> 00:18:04.690 you know, in the streets with pitchforks? Right. 00:18:04.769 --> 00:18:06.869 Why aren't we seeing a revolt? That's the central 00:18:06.869 --> 00:18:08.650 question of that book, which is even longer than 00:18:08.650 --> 00:18:11.269 the first one. He argues that inequality is never 00:18:11.269 --> 00:18:13.609 just about economics. It's always sustained by 00:18:13.609 --> 00:18:17.109 an ideology. A story. A story. Exactly. Every 00:18:17.109 --> 00:18:20.029 society, from feudal Europe to caste -based India 00:18:20.029 --> 00:18:22.609 to modern America, constructs a narrative to 00:18:22.609 --> 00:18:25.130 justify why some people have everything and others 00:18:25.130 --> 00:18:27.569 have nothing. It makes the arrangement feel natural 00:18:27.569 --> 00:18:30.730 or just or inevitable. So in 1789, the story 00:18:30.730 --> 00:18:33.349 was God appointed the king so he gets the palace. 00:18:33.569 --> 00:18:36.049 What's the story we tell ourselves today? Today, 00:18:36.049 --> 00:18:39.289 the story is a powerful combination of meritocracy 00:18:39.289 --> 00:18:43.349 and property rights. We tell ourselves that billionaires 00:18:43.349 --> 00:18:45.490 are billionaires because they are geniuses who 00:18:45.490 --> 00:18:48.089 added value to the world and that touching their 00:18:48.089 --> 00:18:50.190 wealth would be theft and would crash the whole 00:18:50.190 --> 00:18:53.589 economy. Piketty calls this the sacralization 00:18:53.589 --> 00:18:56.880 of property. We treat property rights as if they're 00:18:56.880 --> 00:18:59.480 on the same level as human rights. We do. And 00:18:59.480 --> 00:19:01.980 he argues we've gone way too far. He points out 00:19:01.980 --> 00:19:05.099 that historically, real human progress didn't 00:19:05.099 --> 00:19:07.319 come from protecting property at all costs. It 00:19:07.319 --> 00:19:09.700 came from challenging it. What are some examples? 00:19:09.859 --> 00:19:12.220 Well, the end of slavery was a massive violation 00:19:12.220 --> 00:19:15.380 of the property rights of slaveholders. The introduction 00:19:15.380 --> 00:19:18.119 of progressive income tax was decried as communism 00:19:18.119 --> 00:19:21.480 and theft in the early 20th century. But those 00:19:21.480 --> 00:19:23.740 violations of property were absolutely necessary 00:19:23.740 --> 00:19:27.059 to create a more just and stable society. So 00:19:27.059 --> 00:19:29.519 he's essentially calling for a new story, a new 00:19:29.519 --> 00:19:32.339 ideology, which brings us to the so what part 00:19:32.339 --> 00:19:33.920 of this? The prescription. The prescription. 00:19:34.430 --> 00:19:36.210 If his diagnosis is right, what does he want 00:19:36.210 --> 00:19:38.609 to do about it? Because this is where the rock 00:19:38.609 --> 00:19:41.130 star economist usually gets into trouble with 00:19:41.130 --> 00:19:44.250 the policy wonks. And his flagship solution is, 00:19:44.430 --> 00:19:48.369 it's a big one. It's the global wealth tax. Okay, 00:19:48.410 --> 00:19:50.890 break that down. He proposes a progressive tax 00:19:50.890 --> 00:19:53.890 on net wealth. So not your income, but your total 00:19:53.890 --> 00:19:55.890 assets minus your debts. If you're worth $100 00:19:55.890 --> 00:19:58.670 million, you pay a certain percentage of that 00:19:58.670 --> 00:20:00.910 every single year, not just when you sell something. 00:20:01.109 --> 00:20:04.579 But the key word there is global. And that, to 00:20:04.579 --> 00:20:06.519 me, feels like the Achilles heel of the whole 00:20:06.519 --> 00:20:08.779 thing. It is the biggest challenge. Because if 00:20:08.779 --> 00:20:11.140 France implements a wealth tax and the U .S. 00:20:11.160 --> 00:20:13.059 doesn't, the French billionaires just get on 00:20:13.059 --> 00:20:15.500 a plane and move to Miami. We've seen this happen 00:20:15.500 --> 00:20:17.119 in France specifically when they had a wealth 00:20:17.119 --> 00:20:19.660 tax before. Capital flight. Oh, Piketty knows 00:20:19.660 --> 00:20:22.039 this. He's not naive about it. That's why he 00:20:22.039 --> 00:20:24.119 insists it has to be international and coordinated. 00:20:24.859 --> 00:20:27.819 He envisions a system where huge economic blocks 00:20:27.819 --> 00:20:31.059 like the U .S. and the EU combined and force 00:20:31.059 --> 00:20:33.680 the tax and impose heavy sanctions on tax havens 00:20:33.680 --> 00:20:35.640 like the Cayman Islands or Switzerland. So he 00:20:35.640 --> 00:20:38.019 essentially wants to end banking secrecy on a 00:20:38.019 --> 00:20:40.900 global scale. That's the goal. Now, you can look 00:20:40.900 --> 00:20:43.599 at that and say, realistically, in a world where 00:20:43.599 --> 00:20:46.240 we can't even agree on basic climate targets, 00:20:46.460 --> 00:20:49.660 getting every major nation to agree to tax their 00:20:49.660 --> 00:20:53.119 own elites. Optimistic is a very kind word. It 00:20:53.119 --> 00:20:56.099 is utopian. But Piketty would argue that utopian 00:20:56.099 --> 00:20:58.640 ideas are necessary because they move the Overton 00:20:58.640 --> 00:21:01.359 window. They shift the boundaries of what's considered 00:21:01.359 --> 00:21:04.059 possible to discuss. And what would he do with 00:21:04.059 --> 00:21:06.440 that tax revenue? Well, he also proposes something 00:21:06.440 --> 00:21:09.839 he calls inheritance for all. Basically, using 00:21:09.839 --> 00:21:12.700 the revenue from these wealth taxes to give every 00:21:12.700 --> 00:21:16.019 single 25 -year -old a lump sum of capital, say 00:21:16.019 --> 00:21:19.319 120 ,000 euros, to start their life. A capital 00:21:19.319 --> 00:21:21.299 endowment. Yeah. So instead of waiting for your 00:21:21.299 --> 00:21:23.759 parents to die to get a start, the state gives 00:21:23.759 --> 00:21:26.200 you a stake in the economy from day one. Right. 00:21:26.339 --> 00:21:29.220 It's a direct attempt to break that patrimonial 00:21:29.220 --> 00:21:32.279 cycle of inherited advantage. And he's also moved 00:21:32.279 --> 00:21:34.519 more into climate activism lately. I saw that. 00:21:34.559 --> 00:21:38.019 The private jets. Yes. Calling for outright bans 00:21:38.019 --> 00:21:40.640 on private jets and for progressive carbon taxes 00:21:40.640 --> 00:21:43.700 that specifically target the wealthy. He links 00:21:43.700 --> 00:21:46.460 the climate crisis directly to inequality, pointing 00:21:46.460 --> 00:21:49.400 out that the top 1 percent emit vastly more carbon 00:21:49.400 --> 00:21:51.819 than the entire bottom 50 percent of the population 00:21:51.819 --> 00:21:54.019 combined. He's certainly not afraid to be radical 00:21:54.019 --> 00:21:57.400 in his proposals. But when he tries to apply 00:21:57.400 --> 00:22:00.859 these ideas in the real world of politics, the 00:22:00.859 --> 00:22:04.660 results have been, well, mixed. To put it mildly. 00:22:04.720 --> 00:22:07.339 Mix is being generous. He has a track record 00:22:07.339 --> 00:22:09.460 of jumping into the political arena and then 00:22:09.460 --> 00:22:11.680 storming out in frustration. Tell us about that. 00:22:11.900 --> 00:22:14.380 OK, so he advised Céline Royale in her presidential 00:22:14.380 --> 00:22:17.480 campaign in 2007. Then he supported François 00:22:17.480 --> 00:22:19.940 Hollande in 2012. Hollande won. Hollande won. 00:22:19.980 --> 00:22:22.019 But then Piketty later described his presidency 00:22:22.019 --> 00:22:25.299 as hopeless and a catastrophe because Hollande 00:22:25.299 --> 00:22:27.900 pivoted to more pro -business supply side policies. 00:22:28.140 --> 00:22:30.660 He felt completely betrayed. And what about the 00:22:30.660 --> 00:22:32.519 stint with the British Labour Party under Jeremy 00:22:32.519 --> 00:22:34.859 Corbyn? That was a big deal at the time. A huge 00:22:34.859 --> 00:22:37.400 deal. He joined their Economic Advisory Committee 00:22:37.400 --> 00:22:41.319 in 2015. It gave Corbyn's program a lot of intellectual 00:22:41.319 --> 00:22:44.220 credibility. Piketty was advising that tax rates 00:22:44.220 --> 00:22:47.119 over 50 % on the highest earners wouldn't hurt 00:22:47.119 --> 00:22:49.809 the economy. So why did he leave? That was even 00:22:49.809 --> 00:22:52.869 shorter lived. He quit in June 2016 because he 00:22:52.869 --> 00:22:54.910 felt the party was too weak and ambivalent on 00:22:54.910 --> 00:22:58.529 Brexit. He wanted a robust, passionate, pro -European 00:22:58.529 --> 00:23:01.670 campaign. And he felt Corbyn was lukewarm at 00:23:01.670 --> 00:23:04.170 best. So it seems like he has very little patience 00:23:04.170 --> 00:23:07.720 for the compromises and... frankly, the messiness 00:23:07.720 --> 00:23:10.299 of actual governance. I think that's the intellectual's 00:23:10.299 --> 00:23:12.420 prerogative, isn't it? He can demand ideological 00:23:12.420 --> 00:23:15.039 purity. A politician has to build a coalition 00:23:15.039 --> 00:23:17.660 and win votes. There's a fundamental clash of 00:23:17.660 --> 00:23:19.799 cultures there. We see that same spirit in his 00:23:19.799 --> 00:23:22.500 refusal of the Legion of Honor in 2015. Oh, absolutely. 00:23:22.660 --> 00:23:24.519 That was a huge moment in France. The government 00:23:24.519 --> 00:23:26.339 tries to give him their highest civilian award 00:23:26.339 --> 00:23:28.579 and he publicly rejects it, just turns it down 00:23:28.579 --> 00:23:31.799 flat. And what was his reason? He said I do not 00:23:31.799 --> 00:23:33.759 think it is the government's role to decide who 00:23:33.759 --> 00:23:37.200 is honorable. It was a direct slap in the face 00:23:37.200 --> 00:23:39.079 to the socialist government he had previously 00:23:39.079 --> 00:23:42.220 supported. It really reinforced his brand as 00:23:42.220 --> 00:23:45.480 this incorruptible outsider someone who couldn't 00:23:45.480 --> 00:23:48.519 be bought or flattered. However we can't discuss 00:23:48.519 --> 00:23:51.339 his biography without mentioning the darker controversies. 00:23:51.700 --> 00:23:54.140 There are aspects of his personal life that have 00:23:54.140 --> 00:23:56.279 complicated his standing as a public figure. 00:23:56.599 --> 00:23:59.559 particularly in the hashtag MeToo era. Yes, and 00:23:59.559 --> 00:24:01.220 we need to address this carefully but clearly. 00:24:01.839 --> 00:24:04.740 In 2009, he was the subject of a legal complaint 00:24:04.740 --> 00:24:07.440 by his former partner, Aurelie Filippetti, who 00:24:07.440 --> 00:24:09.960 is herself a prominent politician and novelist. 00:24:10.059 --> 00:24:11.500 And the complaint was for domestic violence? 00:24:11.619 --> 00:24:13.539 Domestic violence, yes. How was this resolved? 00:24:13.960 --> 00:24:15.920 Well, according to the sources, Piketty acknowledged 00:24:15.920 --> 00:24:17.960 the facts of the violence to the police at the 00:24:17.960 --> 00:24:20.640 time. Filippetti later withdrew the formal complaint, 00:24:20.819 --> 00:24:22.759 which is not uncommon in these cases, but the 00:24:22.759 --> 00:24:25.400 incident is on the public record. And then more 00:24:25.400 --> 00:24:28.819 recently, in 2022, there was a libel case where 00:24:28.819 --> 00:24:30.839 Piketty was found guilty for comments he made 00:24:30.839 --> 00:24:32.740 that were... We're seen as downplaying the severity 00:24:32.740 --> 00:24:35.019 of the incident. This raises a really difficult 00:24:35.019 --> 00:24:38.259 question for the listener and for us. In France, 00:24:38.259 --> 00:24:40.619 there's a strong tradition of separating the 00:24:40.619 --> 00:24:44.480 man from the work. L 'homme est louve. But for 00:24:44.480 --> 00:24:46.839 many readers, especially in the U .S. and the 00:24:46.839 --> 00:24:50.980 U .K., it's very hard to reconcile a public champion 00:24:50.980 --> 00:24:54.119 of social justice with a history of private abuse. 00:24:54.890 --> 00:24:57.329 It is a contradiction that hangs over his reputation. 00:24:57.670 --> 00:25:00.829 He is married now to Julia KJ, who is a brilliant 00:25:00.829 --> 00:25:02.869 economist in her own right, and they collaborate 00:25:02.869 --> 00:25:05.950 closely on research. But that history with Filippetti 00:25:05.950 --> 00:25:08.990 remains a significant stain on his personal character, 00:25:09.269 --> 00:25:11.849 even as his academic work continues to define 00:25:11.849 --> 00:25:14.630 the entire field. It's a sobering reminder that 00:25:14.630 --> 00:25:16.250 we're looking at the work of humans, not saints. 00:25:16.369 --> 00:25:18.529 So, OK, let's try to synthesize all of this. 00:25:18.589 --> 00:25:20.849 We have the data, the theory, the politics, the 00:25:20.849 --> 00:25:23.829 personal controversies, the man. If we step back, 00:25:23.970 --> 00:25:26.269 what is the lasting impact of Thomas Piketty? 00:25:26.369 --> 00:25:28.890 What did he change? I think his greatest contribution, 00:25:29.089 --> 00:25:31.470 hands down, is that he ended the era of economics 00:25:31.470 --> 00:25:34.150 without history. He forced the discipline to 00:25:34.150 --> 00:25:36.650 look at long -term multigenerational trends rather 00:25:36.650 --> 00:25:39.049 than just short -term abstract models. Right. 00:25:39.130 --> 00:25:42.130 And he put distribution back at the absolute 00:25:42.130 --> 00:25:45.250 center of the table. That's so important. For 00:25:45.250 --> 00:25:47.150 a long time, it felt like economists only cared 00:25:47.150 --> 00:25:50.630 about efficiency and growth. How big is the economic 00:25:50.630 --> 00:25:54.470 pie? Bickety came along and reminded us that 00:25:54.470 --> 00:25:57.369 it doesn't matter how much the pie grows if one 00:25:57.369 --> 00:25:59.630 person is eating 90 percent of it. That's it. 00:25:59.710 --> 00:26:01.890 Exactly. So even if you think his global wealth 00:26:01.890 --> 00:26:04.650 tax is a complete fantasy or if you agree with 00:26:04.650 --> 00:26:07.190 Rogling that he overstates the role of capital 00:26:07.190 --> 00:26:10.250 versus housing, you cannot ignore his diagnosis. 00:26:10.430 --> 00:26:13.569 The gap between three dollars is real. The concentration 00:26:13.569 --> 00:26:16.869 of wealth at the very top is real. And the political 00:26:16.869 --> 00:26:19.829 realignment into Brahmins versus merchants. My 00:26:19.829 --> 00:26:22.029 God. That's playing out on the news every single 00:26:22.029 --> 00:26:24.410 night. It's the defining political cleavage of 00:26:24.410 --> 00:26:26.970 our time. Which brings us back to that final 00:26:26.970 --> 00:26:30.170 powerful idea of ideology. Piketty argues that 00:26:30.170 --> 00:26:31.869 the only thing holding the current system together 00:26:31.869 --> 00:26:33.910 is the story we tell ourselves about why it's 00:26:33.910 --> 00:26:36.690 fair. And stories are fragile. They can break. 00:26:36.990 --> 00:26:40.269 They are very fragile. If the story that capitalism 00:26:40.269 --> 00:26:43.069 benefits everyone stops being believable for 00:26:43.069 --> 00:26:46.130 the majority of people, the system becomes dangerously 00:26:46.130 --> 00:26:49.910 unstable. Piketty's work is essentially a warning 00:26:49.910 --> 00:26:53.230 shot across the bow, he's saying. If we don't 00:26:53.230 --> 00:26:55.210 fix the distribution of wealth through democratic 00:26:55.210 --> 00:26:58.609 means like taxes and regulation history, suggests 00:26:58.609 --> 00:27:01.930 it will eventually be fixed by much uglier means. 00:27:02.269 --> 00:27:05.829 Like social unrest or revolution. Exactly. The 00:27:05.829 --> 00:27:07.789 charts in his books are dry, they're academic, 00:27:07.950 --> 00:27:11.509 but the message is anything but. It's a desperate 00:27:11.509 --> 00:27:13.730 call to rewrite the social contract before it 00:27:13.730 --> 00:27:16.029 tears itself apart. So that's the so what here. 00:27:16.130 --> 00:27:17.809 We are living in the world that Piketty described 00:27:17.809 --> 00:27:20.849 for us. The question he leaves us with is whether 00:27:20.849 --> 00:27:23.230 we're willing to use the democratic tools he 00:27:23.230 --> 00:27:25.970 suggests to try and change it. It's a heavy question. 00:27:26.170 --> 00:27:27.950 It's a very heavy question, but one we have to 00:27:27.950 --> 00:27:30.049 sit with. We've covered the prodigy, the data, 00:27:30.130 --> 00:27:32.410 the theory, and the flaws. Thomas Piketty has 00:27:32.410 --> 00:27:34.009 given us the map of our current predicament. 00:27:34.289 --> 00:27:36.690 It's really up to us to decide where to steer 00:27:36.690 --> 00:27:38.849 the ship. And hopefully we can steer it away 00:27:38.849 --> 00:27:42.099 from the rocks he's pointed out. Indeed. Thanks 00:27:42.099 --> 00:27:44.279 for going on this deep dive with us. There is 00:27:44.279 --> 00:27:46.400 always more to learn, but for now that's all 00:27:46.400 --> 00:27:46.980 the time we have.