Speaker 1: Can you just give us, as solow somewhere in terms
Speaker 1: of your current assessment of where you think the path
Speaker 1: of inequality is right now.
Speaker 2: Well, you know, I'm trying. You know, it's it's easy
Speaker 2: to be sort of very negative and very pessimistic about
Speaker 2: the present. So I'm trying, you know, to give some
Speaker 2: some optimistic long term view and long term perspective. And
Speaker 2: this is something you know, I already was I was
Speaker 2: doing in my book A Brief History of Equality, where
Speaker 2: I stress, you know, the long run movement toward more equality,
Speaker 2: which has been an enormous success in in you know, historically,
Speaker 2: and which we tend to forget. You know, I think
Speaker 2: sometimes we are so sort of accustomed to the fact
Speaker 2: that the income scale today is so much more compress
Speaker 2: than it was one hundred years ago, you know, in
Speaker 2: spite of the increase in recent decades, that we tend
Speaker 2: to forget. We tend to forget about that. So I
Speaker 2: start from this historical legacy, and I try to look
Speaker 2: at the future from this perspective because I think, you know,
Speaker 2: the challenges of the future, in particular the financing of
Speaker 2: the energy transition, the climate transitions, the new needs in
Speaker 2: health infrastructure spending, education spending, you know, with the majority
Speaker 2: of generation now going to aigher education in many countries,
Speaker 2: and you know that's not going to stop. If anything,
Speaker 2: you know, this will continue, and these sectors are going
Speaker 2: to keep growing. And that's good in many many ways,
Speaker 2: including from the point of view of the material footprint
Speaker 2: of our economic activities. But given given all these needs
Speaker 2: for for you know, financing important investment for common future,
Speaker 2: there's no way this can happen, you know, without continuing
Speaker 2: in the compression of inequality. And you know, otherwise the
Speaker 2: middle class, the lower class will not accept any of this,
Speaker 2: any any of this energy investment and public spending in
Speaker 2: the so, so this will So my is that in
Speaker 2: the long run, you know, this will have to happen
Speaker 2: because there's just no other way, okay to make it work. Yeah,
Speaker 2: no other way.
Speaker 1: But we're getting to a crunch point now, where is
Speaker 1: there's also talk of wealth taxes across from.
Speaker 2: Across the UK.
Speaker 1: So I want to specifically hone in on this idea
Speaker 1: of a two percent weld tax that's being discussed in France.
Speaker 1: Now is it a good idea?
Speaker 2: Oh? Yes, this is the absolute minimum. I mean, the
Speaker 2: problem is that it's too small. It's not going to
Speaker 2: solve the you know, given again, given the size of
Speaker 2: the public that plus the size of all the new
Speaker 2: investment that's needed, you know, that will not be sufficient.
Speaker 2: But yes, that's a that's a useful minimum to start
Speaker 2: with them.
Speaker 1: A useful minimum to start with. Is it going to happen?
Speaker 1: Is that what is going to be needed in order
Speaker 1: to France to pass.
Speaker 2: A budget in France, Well, basically there are two possibilities
Speaker 2: for the people in power in France. Now is all
Speaker 2: the side with the right, so with the rational all
Speaker 2: the side with the left, and then they need to
Speaker 2: do this text they have to choose. I mean in
Speaker 2: a way, the prime is that they want to pretend
Speaker 2: that they don't have to choose them, that they can
Speaker 2: continue to government their own except that they don't have
Speaker 2: a majority. And you know, it's like that everywhere. I
Speaker 2: would say, you know, a pure sort of pro business
Speaker 2: policy does not renew a majority anywhere. Broadly speaking, that's
Speaker 2: the sort of nationalist strategy. Oh you have more you know,
Speaker 2: redistributive and more regalitarian, re distributive strategy. And so that's
Speaker 2: this is the choice of the future in general, and
Speaker 2: my take is that, Okay, I don't know which side
Speaker 2: the French government is going to take. I think for
Speaker 2: them it's more natural to go with the right. You know,
Speaker 2: they already voted. To be very concrete, the Macro members
Speaker 2: of Parliament already voted the Law and Immigration two years ago,
Speaker 2: which gave a lot of what Elopen is asking for.
Speaker 2: It was not entirely passed for technical juridical reason, but
Speaker 2: they had actually voted a challenge in but you go
Speaker 2: in the Law of Nationality how you become French, which
Speaker 2: was conceding a lot of the automatic acquisition of nationality
Speaker 2: for people going in front. So that's really a core
Speaker 2: issue that the pen is asking for. They could go
Speaker 2: in this direction. Ok, that's one way to get a majority,
Speaker 2: but that's not the way I prefer. And you know,
Speaker 2: I don't think the ways that we'll solve the problem
Speaker 2: we have to solve in the long run.
Speaker 1: Yeah, the two percent, there's a big debate about how
Speaker 1: much it's really going to raise. You say that it's
Speaker 1: inevitable that it has to be done, and if you
Speaker 1: want to stay in power, be in power in European
Speaker 1: countries and in France, included you need it. But there's
Speaker 1: a massive debate about how much annually that two percent
Speaker 1: wealth tax would actually raise the high numbers of fifteen
Speaker 1: to twenty billion, but actually as low as three point
Speaker 1: eight or below five billion a year. You're obviously in
Speaker 1: the higher camp. But what happens if it's.
Speaker 2: Much much less. The only way you can you can
Speaker 2: debate it by four from twenty to five, is if
Speaker 2: you start from the assumption that you know, top twelves
Speaker 2: holders can evide seventy five percent of the tax and
Speaker 2: there is nothing we can do about it. But you know,
Speaker 2: if you start from this assumption, you know, you put
Speaker 2: yourself first. This is not a natural law. You know,
Speaker 2: you cannot say, oh, this is a law coming from
Speaker 2: the sky. You know this economic science has told me
Speaker 2: that the people can escape seventy five percent of the tax.
Speaker 2: There's nothing you can do about it. But you have
Speaker 2: to be very careful because when you make this kind
Speaker 2: of claim and you pretain you talk in the name
Speaker 2: of science of rationality and you tell people there's just
Speaker 2: no way we can make these people pay the tax
Speaker 2: on there because everybody agree. You know, let's be very
Speaker 2: clear in terms of numbers, everybody agrees. At the top
Speaker 2: five hundred wells soldiers in France, which is exactly the
Speaker 2: people who are targeted by the tax have a total
Speaker 2: wealth of over one thousand billion. You're one thousand, two
Speaker 2: hundred billion. So everybody agrees that two percent of this
Speaker 2: is going to make twenty twenty five. So if you
Speaker 2: want to reduce this tax, for you estimate to five
Speaker 2: If you want to divide it by for you have
Speaker 2: to say in one way or another that you know
Speaker 2: you will be able to tax only one quarter of
Speaker 2: the wealth of these people. So you have to make
Speaker 2: the plan. It's just no way.
Speaker 1: But then people leave the country. That's the issues. If
Speaker 1: the people leave the country.
Speaker 2: But still you can you can still be liable to yes.
Speaker 1: So then that's the idea of the five year plan,
Speaker 1: even if you were to live France.
Speaker 2: Yeah, I think the simplest way to do it. You know,
Speaker 2: in the US they say, as long as you keep
Speaker 2: the US citizenship, it's forever. I don't think that's one possibility,
Speaker 2: but I don't think that's the best way. I think
Speaker 2: a better way to do it is more in proportion
Speaker 2: to the number of years of residents you've spent in
Speaker 2: the country. So basically, if you it's a very simple logic.
Speaker 2: You know, you've you've spent your first fifty years in France,
Speaker 2: You've used French public infrastructure, public educational systems, public publicans,
Speaker 2: the legal system. You how can you accumulate your wells
Speaker 2: without the legal system? Then you go one year to
Speaker 2: free their own. Okay, let's tart, but you still have
Speaker 2: to pay fifty fifty first, a fraction, you know, close
Speaker 2: to ninety five percent of the tax that you would
Speaker 2: be paying if you stay in France. It's as simple
Speaker 2: as that. And then if you don't want to pay it,
Speaker 2: you know, the thing is that it's not as if
Speaker 2: these people have no relations with France. You know, they
Speaker 2: have lots of relations with friends. They typically own buildings there,
Speaker 2: they have family there. So if you don't pay it,
Speaker 2: you know, you put yourself in the same position as
Speaker 2: any one. Yes, we decide not to pay attack so
Speaker 2: you know, your assets can be can be frozen, you
Speaker 2: can be arrested at the airport. You know, that's the
Speaker 2: life of normal people. You know, normal people cannot decide
Speaker 2: that three quarters of the tax they're supposed to pay
Speaker 2: they can do away with it. I mean you would
Speaker 2: love to do that. I would everybody would love to
Speaker 2: do that. But everybody will they can only if you
Speaker 2: let them.
Speaker 1: Well, is there any support in your view amongst the
Speaker 1: wealthy individuals? I mean, you can name you know, Bernard
Speaker 1: Arnaut has a lot much family, alvmge. You know, francois
Speaker 1: better on cour mind? Are they in favor that some
Speaker 1: of the big Americans?
Speaker 2: Why would they be in favored?
Speaker 1: Well, because some of the big American business people talk
Speaker 1: about a philanthropy. Is there any support from this?
Speaker 2: There's a lot of hypocrisy in these claims. You know,
Speaker 2: this guy. People would like to get everything. They would
Speaker 2: like to keep the power be viewed as generous that
Speaker 2: they don't want to lose control. Look that perfectly humane.
Speaker 2: I don't blame them, you know, it's it's fine. I mean,
Speaker 2: that's okay. You know, it's not a question of individual.
Speaker 2: You know, it's only a question of money. You know,
Speaker 2: it's not the individual as such. The dignity of individuals,
Speaker 2: the virtue of individual is not at stake. You know,
Speaker 2: there are lots of nice people, I'm sure in this group,
Speaker 2: like in every procubasonal book, So you know, it's just
Speaker 2: a question of money. But you cannot expect that people
Speaker 2: naturally want to give up their money and power. You
Speaker 2: know this never happened like this, But let's let's let's
Speaker 2: let's put things in perspective, because you know, this is
Speaker 2: not the first time in history that we talk about
Speaker 2: x REFILM. You know, we've had best from forever, you know.
Speaker 1: And.
Speaker 2: The point whether it has never been voluntary stand up,
Speaker 2: then none of this reform would have happened. So this
Speaker 2: makes no sense.
Speaker 1: I'm sorry I only interrupted you because we have so
Speaker 1: little time. But your point about the inflection point, about
Speaker 1: whether we are at a point in history where things
Speaker 1: are going to become more equal or less equal, I
Speaker 1: mean to some minds, the contrarian mind might be actually
Speaker 1: we're in an exceptional phase. You know, the world has
Speaker 1: been dominated by Robert Barrons, by very wealthy individuals, and
Speaker 1: perhaps we are returning to that.
Speaker 2: I don't know.
Speaker 1: In terms of whether my other question is about the UK,
Speaker 1: Rachel Reeves is also talking about tax increases, saying much
Speaker 1: more nebulous the idea of well taxes in the UK.
Speaker 1: If you were giving her advice ahead of the budget,
Speaker 1: what would you say.
Speaker 2: She should do the same as what is being discussed
Speaker 2: in France as the starting point. You know, I think
Speaker 2: it's a good starting point. This was also propose, you know,
Speaker 2: the G twenty submit by Brazil. You know, so this
Speaker 2: idea of a minimum two percent tax for people above
Speaker 2: a very high threshold one hundred million euro in net wells,
Speaker 2: I think it is a good starting point because you
Speaker 2: need to demonstrate to public opinion and to the rest
Speaker 2: of the options that you know, it's possible to have
Speaker 2: a tax with no tax lefl with no exemptions for
Speaker 2: people who are really really wealthy. Otherwise, you know, how
Speaker 2: can you ask people who are just millionaire or people
Speaker 2: you know, five hundred pounds you know that they should pay,
Speaker 2: if people above one hundred you are not sure that
Speaker 2: they pay. So I think you have to start there, yeah,
Speaker 2: with you know, very high spreshold and relatively low tax. Right.
Speaker 2: And look, when I wrote in Capitol in the twenty
Speaker 2: first century, that was ten years ago, that we would
Speaker 2: have you know, a world wid stax. When I was
Speaker 2: talking already of your tax ragion five ten percent or
Speaker 2: you know now I'm saying more ninety percent. But you know,
Speaker 2: but even two persons, you know, it's an interesting starting point.
Speaker 2: But when I was talking about this ten years ago,
Speaker 2: you know, most people would say this is crazy, this
Speaker 2: will never happen. Ten years lefter, you have a G
Speaker 2: twenty submit where you know, government in the basil is
Speaker 2: supporting these. Most European governments are sort of saying, oh, yes,
Speaker 2: why not if we all do it? But we don't know,
Speaker 2: We're not sure. But you know, the.
Speaker 1: Business to business investment, the consequences I mean, for example, well,
Speaker 1: the the US view perhaps or the more capitalist view,
Speaker 1: would be that you squash any you know, the desire
Speaker 1: to make outsized profits, to create artificial intelligence and make
Speaker 1: those enormous leaps the business.
Speaker 2: I mean, the little class can save an invest I
Speaker 2: mean the idea that the investment has to come from
Speaker 2: a few individual geniuses and that the rest of us
Speaker 2: just us to watch them and applaud. You know, is
Speaker 2: a sort of monarchical view of economic structure which is
Speaker 2: completely at hod with our economic realities, which is that
Speaker 2: we have you know, hundreds of thousands of engineers, the technicians,
Speaker 2: the high skilled people who actually can and want to
Speaker 2: participate to economic decision making, to investment. And historically, let
Speaker 2: me make clear that. In fact, in the twentieth century,
Speaker 2: what happened was a massive deconcentration of wealth. For just
Speaker 2: to put numbers, you know, happen until World War One,
Speaker 2: ninety percent of the world belong to the top ten percent,
Speaker 2: including sixty percent to the top one person. This was
Speaker 2: reduced enormously. Over the bourse of the twentieth century. You
Speaker 2: had the rise of a giantic wells middle class. Did
Speaker 2: it hurt growth? Did it hurt investment? This was exactly
Speaker 2: the opposite because you had.
Speaker 1: The living in the world in President Trump. Now, aren't
Speaker 1: President Trump has already made against her crasy you know
Speaker 1: who don't want the empires in digital services tax I
Speaker 1: mean yes, And this the wealth is also being generated
Speaker 1: out of the US. The truth is taxing French people
Speaker 1: would not actually generate wealth from the digital economy that
Speaker 1: is being driven out of the US.
Speaker 2: You have the tax base that we're talking about for
Speaker 2: high wealth individuals who have built their wealth in France
Speaker 2: or in Britain is very very large already. So you know,
Speaker 2: just with the two person tax rate you get quite
Speaker 2: significant tax revinew And this is why you know this
Speaker 2: has been building up in France and why now you know,
Speaker 2: there's ninety person support and opinion polls for this tax.
Speaker 2: By the way, you also have huge popular support in
Speaker 2: the US for a billionaire tax, including among Republican voters.
Speaker 2: So the reason this is happening is just because we
Speaker 2: have a small group of Republican democratically all political and financial.
Speaker 2: But you're in the US, which which really are defending
Speaker 2: you know, their privileges is in effect and their power
Speaker 2: with a lot of energy. This is not the first
Speaker 2: time in history this happens. But you know, the general
Speaker 2: asson from history is that at the end of the day,
Speaker 2: the movement towards you know, more democracy and more equality,
Speaker 2: you know, has been going on for two centuries, and
Speaker 2: it's not going to stop. It's not going to stop
Speaker 2: right now.
Speaker 1: You know, it's going in terms of just very if
Speaker 1: the two percent tax does happen, consequences for the stock
Speaker 1: market in France, for bond investors in France. Do you
Speaker 1: think that it will spook markets? Will it just will
Speaker 1: invest simply swallow it and move forward, or will there
Speaker 1: be instant reaction? That's yeah, a lot of my listens
Speaker 1: are going to be thinking about this there. Investors now
Speaker 1: not you know, in fifty one hundred days time they
Speaker 1: want to that two percent tax comes in. Would it
Speaker 1: have no consequence on French stocks French bonds there.
Speaker 2: You know, this is not a very big challenge as
Speaker 2: compared to the volume of transaction in general. Also, you know, frankly,
Speaker 2: there are so many other factors that affe asset prices.
Speaker 2: So you know, in the long run this is irrelevant
Speaker 2: because there are so many other factors that are more
Speaker 2: important for the prospecty of the economy. You know much
Speaker 2: to invest in education, in infrastructure and your sults, the
Speaker 2: energy crises. You know, this is what dinerment is prospecty
Speaker 2: in the long run. In the short run, you know,
Speaker 2: lots of things can happen. Some people would say, you know,
Speaker 2: asset prices find some housing crisis. Yes, actually too high.
Speaker 2: So many people you know would not complain if they
Speaker 2: were if they were going young.
Speaker 1: Or a lip cent dropping. House prices in France would
Speaker 1: not bother anymore.
Speaker 2: Oh, I think in Paris and London you should go
Speaker 2: down by fifty percent, you know, if you want a
Speaker 2: middle class to be able to find outing. So you know,
Speaker 2: why why why do you have such high housing crises
Speaker 2: in Paris or London. Well, probably because you have too
Speaker 2: many people with too much money that they don't know
Speaker 2: what to do with it, so they just drive up
Speaker 2: the prices too for apartments that they don't even use.
Speaker 2: So you know, if you can, if you can get
Speaker 2: these prices to go down, that's the best policy going
Speaker 2: to do to to to help you know, people, normal
Speaker 2: people access access anything. So you know, don't panic, is
Speaker 2: the general answer. You know, be cool. You know, look,
Speaker 2: you know there's been again. If you look, if I
Speaker 2: look at my you know, dayta in long run perspective,
Speaker 2: you know, the income scale between you know, if I like,
Speaker 2: you know, the top one percent and the bottom ten
Speaker 2: percent was one to one hundred one und years ago.
Speaker 2: It is maybe one to ten today. It has been
Speaker 2: divided by ten. If you had told that to people
Speaker 2: one hundred years ago, because you already had you know,
Speaker 2: business journalism, business people one hundred years ago, if you
Speaker 2: had told them, okay, you're going to have a progressive
Speaker 2: in contact with you know, top tax rate going to
Speaker 2: fifty sixty seventy eighty percent, size of government going from
Speaker 2: ten percent of GDP to forty percent, they would have
Speaker 2: told you one hundred years ago Okay, this is communism.
Speaker 2: The sky is going to fall, the world is going
Speaker 2: to disappear, no economic prosperity anymore. What did we have?
Speaker 2: We had the biggest period of prospecity ever observed in history.
Speaker 1: So they made a lot of perspective.
Speaker 2: Exactly one this kind of statement.
Speaker 1: Yeah, one last thought. Your ideas, to my mind, confront
Speaker 1: those of something like little mask in the world's richest person,
Speaker 1: with all of his clouds. He wants to influence as
Speaker 1: a billionaire, not just the whole host of businesses, but
Speaker 1: also politics also the way that people think about the world.
Speaker 1: And that is the challenge, isn't it.
Speaker 2: It is how to You know what's interesting is that
Speaker 2: the billionaire class, so to speak, or side a business
Speaker 2: class in general. Now they know that they cannot stay
Speaker 2: in power just by having a pro business discourse because
Speaker 2: in fact, they lose power very soon if they do that.
Speaker 2: So they need to have this sort of very nationalist,
Speaker 2: anti migrant discourse if they want to be in power.
Speaker 2: Look look at and look at you know, the Conservative
Speaker 2: Party today in Britain. If they don't get to do
Speaker 2: something with reform and antimigrant et cetera, it's going to
Speaker 2: be very difficult just on the basis of a pro
Speaker 2: business or probillionaire policy to be elected, just because for
Speaker 2: most people this is not very appealing. So the choice
Speaker 2: is not really between, you know, whether you go for
Speaker 2: the billionaire the most favored policy, or because people just
Speaker 2: don't trant that, the choice is more and more between
Speaker 2: sort of nationalism and more sort of egalitarian universal policy.
Speaker 2: I like to talk about democratic socialism. Some people prefer
Speaker 2: to talk about social democracy for the twenty fifth century.
Speaker 2: You know, that's fine with me, as long as we're
Speaker 2: talking about the same thing. Is this going to be
Speaker 2: an easy fight? No, because I think the nationalist discourse
Speaker 2: has a lot of strength also in a way, because
Speaker 2: this is telling people, look, we don't need this being
Speaker 2: complicated international coalition. We don't you know, we just need
Speaker 2: to eat the migrants, to eat the foreigners, to say
Speaker 2: that we are the best in the world. And you know,
Speaker 2: if you are a power food state, particularly in the
Speaker 2: United States, but to a lesser extend the British state
Speaker 2: or the French type, you know, you can sort of
Speaker 2: have the illusion that this nationalist discourse is going to
Speaker 2: get you somewhere. The reality is that it's not going
Speaker 2: to get you anywhere. It's the long brand is just
Speaker 2: not going to solve any of the problems. You know,
Speaker 2: is that going to solve the climate problem in the US.
Speaker 2: Is this going to solve the education problem? The housing problem?
Speaker 2: Is not going to solve any problem. So I'm not
Speaker 2: saying the fight is going to be easy. It's going
Speaker 2: to be complicated. It's always been complicated. You know, every
Speaker 2: political fight in the past which has driven us to
Speaker 2: a more equal world has been very complicated. You know,
Speaker 2: the creation of National Health Service in Britain nineteen forty five.
Speaker 2: You know, you would have told that to people thirty
Speaker 2: years before, fourt years before. They will have told you now,
Speaker 2: the end of the House of Lord budgetary power in
Speaker 2: nineteen teny we have told that forty years before. Noway,
Speaker 2: it's always been complicated. But what are the alternatives? You know,
Speaker 2: the nationalist rhetoric that's not going to solve any of
Speaker 2: the social problems that the they pretend that they pretend
Speaker 2: they willsle But this is a big fight. But the
Speaker 2: billionaire class, you know, why have they all become so reactionary,
Speaker 2: you know Trump because they know that the pure pro
Speaker 2: business discourse, you know, the actually cannot win, so they
Speaker 2: have to find something else, and this something else is
Speaker 2: quite ugly. Unfortunately, sometimes it's working. In the long run,
Speaker 2: it's not going to be working