His area — wealth and income inequality — chimes with the zeitgeist. It speaks to the growing economic and social insecurity felt by millions of people. It recognises that an ever greater proportion of wealth is concentrated in ever fewer hands. It frames the great political challenge of our time — how to sustain something approaching equity and the basic, life-sustaining material security we call the social contract, while encouraging the kind of capitalism that generates the economic growth we all depend on.
When he speaks in Dublin this weekend he will undoubtedly address this crisis of confidence, this growing, gnawing insecurity spreading through layers of society once absolutely confident that their security and comfort were permanent, immutable realities. Adjusting to the fact that they are not is one of the defining, chastening wake-up calls of our time. The dog-eat-dog employment contracts, the regular threat of pay cuts or closure, the growing rate of perma-temping and long-term unemployment — not to mention the near impossibility of a family life in any way recognisable by earlier generations.
Wealth and property statistics are hard to establish, but UN figures show that the world’s richest 10% control roughly 85% of the planet’s assets, while the bottom half of the population — almost four billion people — own less than 1% of the world’s wealth. There are many, and varied, reasons for this but the implications, the contrasting lives of those at either end of the spectrum, are a huge challenge for governments and seem to demand an unprecedented level of international cooperation, especially on taxation, labour laws and banking controls.
Piketty’s research confirms the age-old dichotomy — or affront if you stand on the left — that inherited or accumulated capital generates a far greater return than labour. If this was just a theory it might not need to be confronted but because it condemns the great majority of the world’s population to a life bordering on poverty or, in some instances, serfdom it cannot be ignored. That it is eating away at the middle strata of society brings a new if overdue urgency to the challenge.
Another issue that contributes to this spiral of concentration and denial, is how international corporations avail of national tax laws. There is no point in pretending that this is an easy nut to crack as these corporations hold a very strong hand of cards, especially in countries where unemployment rates are in double figures. This danse macabre is playing out around our corporation tax rates and whether comparatively low rates can be sustained in a community of nations committed to at least the pretence of tax harmonisation.
Piketty has suggested a parliament for the eurozone countries and even if that seems idealistic and premature, and even if national politicians might cede their power, it seems that this scale of unity, the force of political power is needed to manage the world’s resources in a way that might reverse the concentration of wealth, for the greater benefit of the great majority of the world’s population. If a government cannot stand between its citizens and multinational corporations then governments must work better together to do so.