2018-06-11 11:41:03 UTC
The book, "Capital in the Twenty-First Century", by Thomas Piketty and
Arthur Goldhammer is available for $15.85, or $6.90 used, on Amazon,
or you can get a summary of the book for $4.99.
"What the 1% Dont Want Us to Know
Moyers & Company, April 18, 2014
The median pay for the top 100 highest-paid CEOs at Americas publicly
traded companies was a handsome $13.9 million in 2013. Thats a 9
percent increase from the previous year, according to a new Equilar
pay study for The New York Times.
These types of jumps in executive compensation may have more of an
effect on our widening income inequality than previously thought. A
new book thats the talk of academia and the media, Capital in the
Twenty-First Century by Thomas Piketty, a 42-year-old who teaches at
the Paris School of Economics, shows that two-thirds of Americas
increase in income inequality over the past four decades is the result
of steep raises given to the countrys highest earners.
This week, Bill talks with Nobel Prize-winning economist and New York
Times columnist Paul Krugman, about Pikettys magnificent new book.
What Pikettys really done now is he said, Even those of you who
talk about the 1 percent, you dont really get whats going on. Hes
telling us that we are on the road not just to a highly unequal
society, but to a society of an oligarchy. A society of inherited
Krugman adds: Were seeing inequalities that will be transferred
across generations. We are becoming very much the kind of society we
imagined were nothing like.
BILL MOYERS: Welcome. Even in this age of hyperlinks and cyberspace,
nearly six centuries after Gutenberg devised his printing press, its
still possible for a single book to shake the foundations, rattle
clichés, upend dogma, unnerve ideologues, and arm everyday people with
the knowledge they need to fight back against the predatory powers
that have robbed them of their birthright as citizens.
This is such a book: Capital in the Twenty-First Century, by the
French economist Thomas Piketty. The book of the season to many. To
others, the book of the decade. Reviewers have called it a bulldozer
of a book, magisterial, seminal, definitive, a watershed.
At 700 pages its already a best seller. And there isnt a single
scene of seduction, not one celebrity interview, not one picture --
just graph after graph, fact on fact, drawn from two centuries of data
and imbedded in prose that can suddenly explode like a supernova in
Heres one of its extraordinary insights: we are heading into a future
dominated by inherited wealth as capital concentrates in fewer and
fewer hands, giving the very rich ever greater power over politics,
government, and society. Patrimonial capitalism is the name for it,
and it has potentially terrifying consequences for democracy. For
those who work for a living, the level of inequality in the US, writes
Piketty, is probably higher than in any other society, at any time in
the past, anywhere in the world. Over three decades, between 1977 and
2007, 60 percent of our national income went to the richest 1 percent
of Americans. No wonder this is the one book the 1 percent doesn't
want the other 99 percent to read.
Paul Krugman has been writing extensively and generously about
Pikettys book. The Nobel prize-winning economist and New York Times
columnist calls it a tour de force a magnificent sweeping meditation
on inequality that will change both the way we think about society and
the way we do economics.
As scholar, author of many books, and widely read columnist and
blogger, Paul Krugman has himself changed a lot of thinking on
politics and economics. Welcome back.
PAUL KRUGMAN: Hi.
BILL MOYERS: Inequality's been on the table for a long time. Youve
written extensively, others have, too. I mean, its a familiar issue,
but what explains that this book has now become a phenomenon?
PAUL KRUGMAN: Actually, a lot of what we know about inequality
actually comes from him, because he's been an invisible presence
behind a lot. So when you talk about the 1 percent, you're actually to
a larger extent reflecting his prior work. But what he's really done
now is he said, "Even those of you who talk about the 1 percent, you
don't really get what's going on. You're living in the past. You're
living in the '80s. You think that Gordon Gekko is the future."
And Gordon Gekko is a bad guy, he's a predator. But he's a self-made
predator. And right now, what we're really talking about is we're
talking about Gordon Gekko's son or daughter. We're talking about
inherited wealth playing an ever-growing role. So he's telling us that
we are on the road not just to a highly unequal society, but to a
society of an oligarchy. A society of inherited wealth, patrimonial
capitalism. And he does it with an enormous amount of documentation
and it's a revelation. I mean, even for someone like me, it's a
BILL MOYERS: I was going to ask, what could-- what has Paul Krugman
had to learn from this book?
PAUL KRUGMAN: Even the title, the first word in the title, "capital."
We stopped talking about capital. Even people like me stopped talking
about capital because we thought it was all about human capital. We
thought it was all about earnings. We thought that the wealthy were
people who one way or another found a way to make a lot of money.
And we knew that that wasn't always true. We knew that in the Gilded
Age or in the Belle Époque in Europe, which he prefers to talk about.
That high incomes were mostly a result of having lots and lots of
assets. But we sort of said, "Well, that's not the way things work
anymore." And he says, "Oh yeah? It turns out that you're wrong."
Thats true, that right now, a lot of high incomes in America are
people who didn't start out all that rich. But we're rapidly moving
towards a state where inherited wealth dominates. I didn't know that.
I really was-- I should've known it. I should've thought about it, but
I didn't. And so then here comes this book with-- I mean, it's
beautiful-- absolutely analytically beautiful, if that makes any sense
BILL MOYERS: As you know, I'm no economist, but I found this book, as
I said in the opening, just very readable and suddenly there would be
this moment of epiphany.
PAUL KRUGMAN: Yeah, it's a real "eureka" book. You suddenly say, "Oh,
this is not-- the world is not the way I saw it." The world in fact
has moved on a long way in the last 25 years and not in a direction
you're going to like because we are seeing not only great disparities
in income and wealth, but we're seeing them get entrenched. We're
seeing them become inequalities that will be transferred across
generations. We are becoming very much the kind of society we imagine
we're nothing like.
BILL MOYERS: Heres Pikettys main point: capital tends to produce
real returns of 4 to 5 percent, and economic growth is much slower.
What's the practical result of that?
PAUL KRUGMAN: What that means is that if you have a large fortune, or
a family has a large fortune, they can -- the inheritors of that large
fortune -- can live very, very well. They can live an extraordinary
standard of living and still put a large fraction of the income from
that fortune aside and the fortune will grow faster than the economy.
So the big dynastic fortunes tend to take an ever-growing share of
total, national wealth. So once you-- when you have a situation where
the returns on capital are pretty high and the growth rate of the
economy is not that high, you have a situation in which not only can
people live well off inherited wealth, but they can actually pass on
to the next generation even more, an even a higher share.
And so it's all, in his terms, "r" the rate of return on capital, and
"g the rate of growth of the economy. And when you have a high r, low
g economy, which is what we now have, then you're talking not-- you're
talking about a situation in which dynasties come increasingly to
increasingly to dominate the top of the economic spectrum and a tiny
fraction of the population ends up very dominant.
BILL MOYERS: What's the realistic impact of this on working people?
PAUL KRUGMAN: There's a direct impact, which is that part of income is
always going to go to labor, although that seems to be a diminishing
fraction. But the part that comes from capital is going to be in the
hands of a very few people. The other thing, which I think is
critically important, that he talks about more towards the end of the
book is political economy.
That when you have -- Teddy Roosevelt couldve told you and did --
that when you have a few people who are so wealthy that they can
effectively buy the political system, the political system is going to
tend to serve their interests. And that is going to reinforce this
shift of income and wealth towards the top.
BILL MOYERS: Do you agree with him that we are drifting toward
PAUL KRUGMAN: Oh yeah. Oh, I don't think thats even -- I don't see
that there's any question of it. If you look at the-- certainly if you
look at what we know already, and we're learning more, but what we
know already about the concentration of income, of wealth, you can see
that it is growing. . . ."