Thomas Piketty made a splash with his thick and influential book, Capital in the 21st Century. The title is a kind of homage to Karl Marx, whose main work can be translated as “Capital.” Piketty, a French citizen, felt like there were some statistical and methodological advances available to him that pioneers from the past had not been able to take advantage of. His findings are relevant to wealth inequality, income inequality, capital, capitalism, and economic justice. The book is fairly easy to read, but I thought I would share with you thirty of the top Thomas Piketty quotes from the book Capital in the 21st Century. It would be my hope that you find yourself as alarmed as I am about how much wealth – and thus, power – the richest Americans possess. It is no academic matter.
“I was vaccinated for life against the conventional but lazy rhetoric of anticapitalism, some of which simply ignored the historic failure of Communism and much of which turned its back on the intellectual means necessary to push beyond it. I have no interest in denouncing inequality or capitalism per se—especially since social inequalities are not in themselves a problem as long as they are justified, that is, “founded only upon common utility,” as article 1 of the 1789 Declaration of the Rights of Man and the Citizen proclaims.”
“The history of the distribution of wealth has always been deeply political, and it cannot be reduced to purely economic mechanisms.”
“All signs are that the Scandinavian countries, where wage inequality is more moderate than elsewhere, owe this result in large part to the fact that their educational system is relatively egalitarian and inclusive.”
“In the long run, the best way to reduce inequalities with respect to labor as well as to increase the average productivity of the labor force and the overall growth of the economy is surely to invest in education.”
“When a country goes from a population of 3 million to a population of 300 million (to say nothing of the radical increase in territory owing to westward expansion in the nineteenth century), it is clearly no longer the same country.”
“The social sciences collectively know too little to waste time on foolish disciplinary squabbles.”
“Inequalities at the bottom of the US wage distribution have closely followed the evolution of the minimum wage: the gap between the bottom 10 percent of the wage distribution and the overall average wage widened significantly in the 1980s, then narrowed in the 1990s, and finally increased again in the 2000s. Nevertheless, inequalities at the top of the distribution – for example, the share of total wages going to the top 10 percent — increased steadily throughout this period. Clearly, the minimum wage has an impact at the bottom of the distribution but much less influence at the top, where other forces are at work.”
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“The idea [behind capitalism] was that inequalities increase in the early phases of industrialization, because only a minority is prepared to benefit from the new wealth that industrialization brings. Later, in more advanced phases of development, inequality automatically decreases as a larger and larger fraction of the population partakes of the fruits of economic growth.”
“To sum up: modern growth, which is based on the growth of productivity and the diffusion of knowledge, has made it possible to avoid the apocalypse predicted by Marx and to balance the process of capital accumulation.”
“…our estimates pertain to extremely high levels of income, those observed in the top 1 percent or 0.5 percent of the income hierarchy. The evidence suggests that a rate on the order of 80 percent on incomes over $500,000 or $1 million a year not only would not reduce the growth of the US economy but would in fact distribute the fruits of growth more widely while imposing reasonable limits on economically useless (or even harmful) behavior.”
“Recent research, based on matching declared income on tax returns with corporate compensation records, allows me to state that the vast majority (60 to 70 percent, depending on what definitions one chooses) of the top 0.1 percent of the income hierarchy in 2000–2010 consists of top managers. By comparison, athletes, actors, and artists of all kinds make up less than 5 percent of this group.”
“The issue of unequal access to higher education is increasingly a subject of debate in the United States. Research has shown that the proportion of college degrees earned by children whose parents belong to the bottom two quartiles of the income hierarchy stagnated at 10–20 percent in 1970–2010, while it rose from 40 to 80 percent for children with parents in the top quartile. In other words, parents’ income has become an almost perfect predictor of university access.”
These are thirty of the best Thomas Piketty quotes from his book Capital in the 21st Century
“…the available data suggest that social mobility has been and remains lower in the United States than in Europe. One possible explanation for this is the fact that access to the most elite US universities requires the payment of extremely high tuition fees. Furthermore, these fees rose sharply in the period 1990–2010, following fairly closely the increase in top US incomes, which suggests that the reduced social mobility observed in the United States in the past will decline even more in the future.”
“Consider first the mechanisms pushing toward convergence, that is, toward reduction and compression of inequalities. The main forces for convergence are the diffusion of knowledge and investment in training and skills.”
“Political democracies that do not democratize their economic systems are inherently unstable.”
“By comparing various sources of data, moreover, it is possible to estimate that the average income of the parents of Harvard students is currently about $450,000, which corresponds to the average income of the top 2 percent of the US income hierarchy. Such a finding does not seem entirely compatible with the idea of selection based solely on merit. The contrast between the official meritocratic discourse and the reality seems particularly extreme in this case. The total absence of transparency regarding selection procedures should also be noted.”
“Our democratic societies rest on a meritocratic worldview, or at any rate a meritocratic hope, by which I mean a belief in a society in which inequality is based more on merit and effort than on kinship and rents. This belief and this hope play a very crucial role in modern society, for a simple reason: in a democracy, the professed equality of rights of all citizens contrasts sharply with the very real inequality of living conditions, and in order to overcome this contradiction it is vital to make sure that social inequalities derive from rational and universal principles rather than arbitrary contingencies. Inequalities must therefore be just….”
“…wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future.”
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“To sum up: the inequality … has clearly been true throughout most of human history, right up to the eve of World War I, and it will probably be true again in the twenty-first century. Its truth depends, however, on the shocks to which capital is subject, as well as on what public policies and institutions are put in place to regulate the relationship between capital and labor.”
“The very high concentration of capital is explained mainly by the importance of inherited wealth and its cumulative effects….”
“With real assets, everything is different. The price of real estate, like the price of shares of stock or parts of a company or investments in a mutual fund, generally rises at least as rapidly as the consumer price index.”
“Whenever one speaks about the distribution of wealth, politics is never very far behind, and it is difficult for anyone to escape contemporary class prejudices and interests.”
“Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it.”
“No mathematical formula or econometric estimate can tell us exactly what tax rate ought to be applied to what level of income. Only collective deliberation and democratic experimentation can do that.”
“Over a long period of time, the main force in favor of greater inequality has been the diffusion of knowledge and skills.”
“And in the most inegalitarian countries, such as the United States in the early 2010s…, the top [10%] gets 35 percent of the total [available wealth], whereas the bottom [50%] gets only 25 percent.”
I welcome you to read more Thomas Piketty quotes in the Wisdom Archive, a world-class resource for quotations on values, quotes about wisdom, capitalism, income inequality, wealth inequality, economic justice, etc.
Here is a place to buy the book if you are so inclined. I have read much of it, and it is, obviously, chock-full of Thomas Piketty quotes.