It didn’t sound like the hottest ticket in Paris: a debate on the theme of “property” between two of the city’s economists, Frédéric Lordon and Thomas Piketty, on a January night in a dingy hall at the Bourse du Travail, the old Labour Exchange. Just to be sure, I arrived ten minutes early to get a good seat – only to find every one taken. Dozens of disappointed fans filled the pavement outside.

Piketty’s 753-page book Capital in the Twenty-First Century, published in 2013, sold 2.5 million copies worldwide and helped put inequality on the global agenda. But his latest, the even thicker Capital and Ideology, may prove still more influential. The book is nothing less than a global history of inequality and the stories that societies tell to justify it, from pre-modern India to Donald Trump’s US. It arrives just as anger about inequality (some of it generated by Piketty’s work) approaches boiling point, and was channelled by a contender for the White House, Bernie Sanders.

Capital and Ideology builds on Piketty’s long-standing argument that inequality has soared across the world since 1980. It proposes strong remedies. Piketty wants to slap wealth taxes of 90 per cent on any assets over $1 billion, and waxes nostalgic about the postwar decades when British and American top marginal income-tax rates were over 80 per cent.


Much of Piketty’s information comes from the World Inequality Database (WID), which he created with colleagues. A free website, to which over 100 researchers have contributed, it claims to include “series on income inequality for more than 30 countries, spanning most of the 20th and early 21st centuries, with over 40 additional countries now under study.” The WID’s coverage keeps getting more international, as more material from Asia, Africa and Latin America is added. The site is now trying to expand its focus from income to the even harder-to-chart terrain of wealth.

The WID has advanced the entire field of inequality economics. “If you are working on trends on equality over time, especially if you are comparing countries, you are probably working with his team’s data,” says Mark Stabile, a professor of economics at the INSEAD business school outside Paris.

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In an era when technology platforms are arguably concentrating wealth in the hands of a diminishing number of people in the Valley, Piketty’s advocacy of much higher taxes has attracted the attention of both progressives and radicals around the world.

Mads Perch


Thomas Piketty was born in 1971 in a suburb of Paris, to parents who hadn’t graduated from high school but were shaped partly by the 1968 student revolution. Trotskyist militants for a while, they always remained leftists. For three years they raised goats and sold cheese on markets in southwestern France, though his mother later became a primary schoolteacher and his father a research technician.

“My father comes from a perfectly bourgeois family where they were all very right-wing, but my mother has a much more lower-class origin,” Piketty tells me when we meet in his 12-square-metre office on an unfashionable boulevard at the southern tip of Paris. Forty-eight years old, he exudes energy and data, sighing with impatience at any question he considers stupid, and speaking in rapid sentences that fall over each other, in near-perfect English with an almost cartoonish French accent. “To be honest, when I was 15 or 20, I was not very convinced by the leftwing activism of my parents in the 70s, which did not bring them much success in their professional trajectory.”

He was close to his grandfather, chief executive of the ancient family quarrying firm, Piketty Frères. “Very right-wing but a nice character,” he reminisces. “They were taking stones from the ground in the Paris region to build roads – the Paris métro was built in the interwar period using a lot of this stone. It’s like Obelix [the stone-quarrier in the Asterix stories] if you want. He was always very proud of himself, proud of bringing workers from Italy or somewhere else to give them better wages. The only reason why I was upset against him is that my grandmother was very unhappy. She was supposed to stay home and take care of the kids. She had been put in a position of permanent domination, and that's the worst part of this ideology of the breadwinner CEO.”

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Piketty excelled in the most prestigious subject in French education, maths. At the unusually young age of 18 he was accepted at the École normale supérieure, the most purely academic of France’s highly selective “grandes écoles”. Around the same time, the Berlin Wall fell, and he began travelling to eastern Europe. The experience turned him into a convinced capitalist. “It was shocking to see how badly these countries were doing,” he recalls. “Empty shops and grey streets. For me and I guess for lots of people, this contributed in the 1990s to the feeling that we need to get away from these crazy ideas, and trust much more market forces and competition.”


In 1993, aged 22, he finished a prizewinning PhD on wealth distribution and immediately became an assistant professor in MIT’s revered economics department. “He always did everything two years before everyone else and twice as quickly,” says his friend Thomas Philippon, a French economist who followed him to MIT and is now a professor at New York University. Most of today’s admired cadre of French economists – Nobel laureates Esther Duflo and Jean Tirole, the International Monetary Fund’s former chief economist Olivier Blanchard, as well as Piketty’s collaborator Emmanuel Saez – have passed through or stayed at MIT. French economics traditionally focuses on real-world problems, and especially public finance – the study of government’s role in the economy.

At MIT, Piketty taught a class in the economics of inequality. It was a time when most bright young people were centrist policy wonks. Communism had failed, and the market was going to raise all boats, with a little steering. “I don't know if I was Clintonian or Blairist,” says Piketty, “but certainly I felt that this new left or new centre-left, or new centre-not-left, was the way to go.”

He was also influenced by Reaganite elders such as the Harvard economist Martin Feldstein. “The dominant view in this part of the US economics profession was, ‘Very high marginal tax rates in the 50s, 60s, 70s had all sorts of perverse effects. CEOs got paid through fancy cars and perks, and at least now after the Reagan reforms they get paid cash, which is more efficient.’ I was repeating to my students what I had learned. It took me a long time to realise how this kind of discourse had little to do with fact-based analyses and a lot to do with ideology.”

He soon grew disaffected with his profession. Many economists, he says, “pretend to have developed a science that is so scientific that nobody else can understand. Of course, this is a big joke. In the US, people in economics departments feel they are smarter than everybody else in the world, which after two years at MIT I thought was not particularly convincing. I felt: if I stay there I will just become like them. I don't want to be mean, but I think we know very little in economics, in the social sciences. The best we can do is try to collect some historical data and try to interpret them.” So he returned to Paris, where academics earned less and economics had “very little prestige”, to become something between a social scientist and an historian.

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In 2001 he published an admired historical study of French high-earners in the 20th century. In 2006 he helped found the Paris School of Economics and became its first director. His prestige grew, though the economics of inequality remained something of a professional backwater. Meanwhile, he was living with socialist politician Aurélie Filippetti. In 2009 she filed a legal accusation against him of domestic violence. After he apologised, she withdrew the accusation – “in the interest of families and children,” she said later. The public prosecutor dropped all charges. (On this case, Piketty’s lawyer states: "On September 16, 2009, after thorough investigations of the accusations, the charges against Thomas Piketty were dropped. The public prosecutor concluded, after in-depth investigations, either that the facts brought to its notice could not be construed as an offence, or that there was not enough evidence to obtain a conviction from a court, or that such a conviction was highly unlikely".) Piketty, who has three daughters, is now married to the economist Julia Cagé.

By the time he began working on Capital in the Twenty-First Century, he had an advantage over previous writers on inequality: an unprecedented historical database on taxes, incomes and wealth, mostly on the US and a few European countries. “The main particularity of my thinking is that I can base my analyses on data series up until today,” he says. By contrast, he remarks sympathetically, Karl Marx had “very thin data.”

The top decile's share of total national income in Europe, Japan and the US

In Capital in the Twenty-First Century, Piketty marshalled his data to show that the rate of return on capital has usually exceeded the rate of economic growth. This means that owners of wealth will get steadily richer than ordinary income-earners – unless extraordinary shocks or high taxes destroy wealth.

Shocks and taxes explain the one halcyon period of relative equality in western history, 1914-1980. World wars, communist revolutions and inflation combined with high taxes to decimate rich people’s assets. Franklin D. Roosevelt and European social democratic parties, desperate to dissuade workers from Bolshevism, oversaw a redistribution from rich to poor. From 1932 to 1980, top marginal income tax rates averaged 81 per cent in the US and 89 per cent in Britain, Piketty calculated. Rich Americans also paid state income taxes, and higher inheritance taxes than wealthy Europeans.

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But from 1980, Reagan, Thatcher and their acolytes, as well as post-communist regimes in the former USSR and China, restored the trend to inequality. Stabile says that in most countries this trend tailed off in about 2000. However, inequality only became an urgent item on the political agenda after the 2008 financial crisis, when anger grew about the “1 per cent” (a concept popularised largely by Piketty).

Capital in the Twenty-First Century spoke to post-crisis rage. Piketty’s writing was engaging, clear, and speckled with vignettes on historical wealth from Balzac and Jane Austen. Improbably, it reached number one on the New York Times bestseller list. (Still, not everyone got through it. Jordan Ellenberg, mathematician at the University of Wisconsin, has shown that all five passages that readers highlighted most on Kindle were in the book’s first 26 pages.)

Few academic economists in their 40s spend their scarce research time writing lengthy books, when it is generally papers that advance their careers. Philippon of NYU believes that Piketty’s choice was peculiarly French. “We French have a fetishistic respect for books,”he says. “We think books are cool, even if it’s not clear that it’s the best use of our time or that the academy wants it.” And when you write a book, he adds, you often return to topics that fascinated you at school, before you entered your field. In Piketty’s case, that was Balzac.

Philippon notes something else French about Piketty’s work: whereas many American academics are happy in the ivory tower, “if you’re French, you think it’s your job, if it’s feasible, to participate in the public debate.” Because Piketty has prioritised reaching the general public over impressing his peers, the first economics Nobel for inequality research may go instead to his friend Saez.

The sales of Capital in the Twenty-First Century turned Piketty into a one-percenter himself. How did this affect him? He shrugs: “As a professor I was already, like, in the top five per cent of the income distribution, and with copyrights I moved to the top one per cent or 0.1 per cent, so it's not as if I was very low to begin with. I would have liked to pay 90 per cent tax on my copyright. I paid about 60 per cent but I think this is not enough. First, books are also speculative markets, so when you sell 2.5 million copies, it doesn't mean your book is 1,000 times better than someone who sold 2,500 copies. I’m not naïve about that. I know how everybody at some point wants to read the same book – or buy the same book. I also know that this book was a product of a collective research project. I benefited from a public education system, from the work of hundreds of researchers who did not all get copyrights for this. Had I kept just ten per cent of the copyrights, it would already have been a serious tick to my academic wages. There’s really no point giving more than that.”

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After a couple of years of travelling the world, promoting his book and tapping new sources of data from India to Brazil, he returned to his life as a scholar. Every weekday at about 7.30am, he walks from his apartment near the Gare du Nord station to the Paris Métro. He travels 25 minutes south on Métro line 4, passing beneath picture-postcard central Paris where many of his colleagues spend their lives, to the Paris School of Economics just inside the ring road. Here he sits reading, thinking and writing from 8am to 7.30pm. (Piketty lives the academic’s dream of not teaching undergraduates.)

Capital in the Twenty-First Century, for all its sales, had modest political impact. It appeared during a phase of centrist politics around the west: Barack Obama, David Cameron, Matteo Renzi and, in France, François Hollande. “I remember having a public debate with Elizabeth Warren in 2014 in Boston, where she was very much hesitating about the wealth tax,” Piketty says. “[Bernie] Sanders at the time was not proposing a federal wealth tax.”

Leftist politicians weren’t making headway. Piketty briefly advised Jeremy Corbyn, but quit over pressure of work. He advised French Socialist Benoît Hamon in the 2017 elections, but Hamon got an embarrassing six per cent of the vote.

Piketty’s new book, Capital and Ideology, published in French in September 2019 and in English in March 2020, coincides with what could prove a stronger leftist assault on the citadels. In the US, his collaborators Saez and Gabriel Zucman at Berkeley simultaneously advised Sanders and Warren, who both proposed wealth taxes, during their Democratic nominee campaigns.

Mads Perch

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Capital and Ideology starts from the premise that inequality is a political choice. It is something societies opt for, not the inevitable outcome of technology and globalisation. To Piketty, history is a battle of ideas.

Every unequal society, he says, creates an ideology to justify inequality – that allows the rich to fall asleep in their townhouses while the homeless freeze outside. He recounts the justifications that recur throughout history: “The wealth will trickle down”. “The rich will give it back through philanthropy”. “Property is liberty”. “The poor are undeserving”. “Once you start redistributing wealth, you won’t know where to stop”. “Communism failed”. “The money will go to black people” – an argument that explains, Piketty says, why inequality is extreme in countries with historic racial divides such as Brazil, South Africa and the US.

Another common justification is that the rich deserve their wealth. Piketty, who describes entrepreneurs such as Jeff Bezos and Mark Zuckerberg as “oligarchs”, disagrees. He points out that both men benefited from public infrastructure, public education, decades of computer science and the invention of the internet. He sighs, exasperated: “Because they own $100 billion in the current state of the legal system, the current state of the fiscal system, the current way the international economy is organised, people say, ‘OK, $100 billion, exactly the right level.’ But with a different legal system, different international taxation, it could be 200, it could be 50. So what would be the story? Any level that they will attain, it will be the best? This kind of sacralisation of special individuals is a form of religious thought. People who use this kind of argument: ‘He's great, therefore –‘ therefore what? Therefore we should subsidize him so that he's even richer?”

All these justifications for inequality add up to what Piketty calls “sacralisation of property”. But today, he writes, these justifications have frayed. Ever fewer people believe them. There’s growing belief that so-called meritocracy has been subverted by the rich, who get their children into the best universities, buy politicians and dodge taxes.

Capital and Ideology draws on a more global array of data than the previous book. Piketty has assembled his figures into a shocking picture. In the Middle East, the world’s most unequal region, the top ten per cent earns 64 per cent of all income. Russia – which from 1990 to 2000 experienced the largest rise of inequality ever recorded in the WID – and notionally communist China have no inheritance tax at all, marvels Piketty. “They privatised everything to people close to the political regime, and then they can transmit everything with zero per cent tax.”



Even in relatively equal Europe, the concentration of wealth is “stunning” and growing: “The bottom 40 per cent owns barely five per cent of the wealth, while the top ten per cent owns 50-60 per cent.”

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But it’s Piketty’s data for the US that is so breathtaking that you sometimes have to read a sentence twice to be sure it says what you think it does. The top 1 per cent of Americans now earn a total of over 20 per cent of national income; the bottom 50 per cent has just 12 per cent. The average income of an American top one-percenter in 2015 was $1.3 million. For those in the bottom half, it was $15,000, a figure almost unchanged in 40 years. Five years later, it’s about $16,000.

Piketty’s numbers are rigorously sourced, yet there are endless arguments about his data. The Financial Times (which I also write for) has disputed his contention that wealth concentration has increased in Europe since 1970. But the broader point is that numbers on inequality rarely speak for themselves. That means economists must make judgment calls. It’s hard to know how much wealth or income people had in the past or even today. The rich often hide their money, and as for the poor, it’s tricky to quantify benefits like food stamps or government-provided healthcare. When Obama extended Medicaid to tens of millions of poor Americans, should that be counted as an increase in their income? If so, by how much?

Piketty acknowledges the murkiness of much data on equality. He complains that in our supposed age of big data, there is “big opacity” about people’s finances, partly because of a fear among some governments and the rich that if the numbers were known, there would be more pressure to raise taxes. He marvels that even governments and central banks often try to supplement their knowledge by studying Forbes magazine’s rather inexact rankings of billionaires. Piketty has put all his data online, for critics to pick at.

For an example of the problems of data interpretation, take the average income of America’s bottom half. Piketty says that if you assign a monetary value to government-provided healthcare, their average incomes rise to about $20,000. “Now, the problem is that this $4,000, $5,000 increase over four decades, well, first, it's not much. It will represent one week of work for the top ten per cent, or one day of work for the top one per cent.” In other words, he says, even if you agree that the free healthcare that a poor person receives is worth about $4,000, that sum buys only about one day’s worth of attention from a doctor in the top one per cent of income-earners. So the high monetary value of American healthcare largely reflects the soaring incomes of doctors and pharmaceutical companies, and not so much the wellbeing of the low-income recipients of healthcare.

Piketty concludes that, however you measure it, global inequality, even in Europe, looks hideous. His proposed remedies are drastic. He calls for “educational justice” – essentially, spending the same amount on each person’s education. He favours giving workers a big say over how their companies are run, as in Germany and Sweden. But his main proposal is for wealth taxes.

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Far from wanting to abolish property, he proposes spreading it to the bottom half of the population who, even in rich countries, have never owned much. Spreading wealth, says Piketty, requires redefining private property as “temporary” and limited: you can enjoy it in moderation, but you can’t pass it on to your children. He notes that very high tax rates didn’t prevent fast growth in the 1950-1980 period. However, no leading politician anywhere today is pushing Piketty’s proposed 90 per cent tax on wealth over $1 billion. Even Sanders, who favours a wealth tax on the US’s top 0.1 per cent (meaning every married couple with $32 million and up) only suggests a top rate of eight per cent on wealth over $10 billion.

Yet Piketty is an optimist. His data shows rising equality in the long run. “You see the rise of progressive taxation and the decline of inequality,” he says. “The greatest successes in the history of mankind have been the construction of this equitable tax system, the founding of a public education system, public health system.”

What about rising inequality since 1980? “As compared to the long-run evolution, this is a very small reverse. Today's societies are much more equal than 100 years ago. And 100 years ago they were in many ways more equal than 200 years ago.”

However, he warns: “This process is not linear. Also, it's not a deterministic process. You have choices.” He doesn’t believe that people confronted with inequality will inevitably choose egalitarianism. “Unfortunately, there is another possible response, which is more nationalism and identity-based politics and emphasis on frontiers. This is a much easier route to follow. It’s much easier to explain to the population.”

If people are free to choose which route to take, then what matters is persuading them: “When views change, this can change the world very quickly.” Piketty points to Sweden, which from 1910 to 1950 went from rich man’s paradise (where only the rich could vote, and the votes of the very richest counted most heavily) to “one of the most egalitarian” societies in history. “It’s not really due to the war,” he says. “World War One or World War Two had limited importance in Sweden. It's more through mobilization and the changing views of normal people and the changing balance of the world.”

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