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