Interview: Tony Atkinson pleads for a minimum heritage for all citizens

Tony Atkinson is a well known scientist on inequality and a student of James Meade. Atkinson is Senior Research Fellow at the Nuffield College of the Oxford University and Centennial Professor at the London School of Economics. In an interview with the German newspaper “Frankfurter Allgemeine Zeitung” he pleads for a minimum heritage for all citizens at the age of 18 years.

In this interview he was asked about inequality in Germany. He said inequality has consequences for economic success. Even Christine Lagarde, the director of the IMF, worries about inequality which decreases economic growth. However, inequality is for Atkinson also a question of justice. He rhetorically asks whether we really want to live in a country in which some people can travel to space, while others have to eat at meal centres even if they have work.

He is not against good payments and argues that inequality does not mean to dissolve all differences. Rather he means equal opportunities, which are not given in unequal societies.

In his opinion many European countries implemented successful measures after World War II to reduce inequality, but in the last years these programs were reduced. He gives the example that the social state built up a very effective transfer system which helped poor people, but meanwhile social benefits were reduced in many countries.

Asked if Thomas Piketty is right to increase taxes for super rich people to distribute the money, Atkinson answers that Piketty is very interested in super rich people, but less in helping the poor. For Atkinson super rich people are not only a source for taxation; rather he sees in them a risk because at least in the Anglo-American sphere they have increasingly disproportionate political influence. This is bad for democracy. However, poverty as well as marginalisation of poor people is the worst consequence of inequality. In his opinion a further political question of our time is the inequality between generations and genders.

The interviewer asks if he really thinks those modern problems can be solved by measures of yesterday in the sense of more taxes for more social benefits. On the one hand, he says, he supports a progressive tax system; on the other hand, he suggests we unchain the pension system from work and think about new forms of unemployment insurance.

The conversation changes and Atkinson is asked about work and the problem that technological progress assists inequality and robots destroy certain jobs and no taxes can stop this development. He answers that the debate should be on the issue of what we want to be automated. For instance, it might be better to have robots in industry, but do we really want waiters replaced by drones? You cannot talk with drones about the weather (for some people the most important reason to use this service). Not everything a robot can do it should do.

The next question is about what would happen if there is no unemployment, because jobs are paid unequally. Atkinson counters that in future it is important to pay attention to how much people earn before they pay taxes. It is a matter of distributing wages and income from investments. Here he suggests a “minimum heritage” for all citizens at the age of 18 years. In this case they would have this security which heirs have. A possibility to fund this is to increase inheritance taxes. However, he agrees that this would not be easy in a global economy, but it could work if financial information were exchanged. A civilized society needs high taxes. People have to provide information which is needed for taxation.

Link to the original interview by Lena Schipper, 6th April 2015 (in German):

https://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/armut-und-reichtum/interview-mit-tony-atkinson-ueber-armut-ungleichheit-und-mindesterbe-13511563.html