I think if you look back through time, the history of income, wealth and taxation is full of surprise. So I am not terribly impressed by those who know in advance what will or will not happen.
Interpretation
The unpredictability of economic trends makes it difficult to confidently predict wealth and taxation outcomes.
In this quote, Thomas Piketty highlights the historical unpredictability of income, wealth, and taxation. He suggests that those who claim to have definitive knowledge about future economic events may not grasp the complexities and surprises that history reveals, indicating that the past has shown us that certainty in economics is often an illusion.
In practice
During a debate on fiscal policies, one might quote this to emphasize the unpredictability of economic forecasting.
Contrary to a tenacious myth, France is not owned by California pension funds or the Bank of China, any more than the United States belongs to Japanese and German investors. The fear of getting into such a predicament is so strong today that fantasy often outstrips reality. The reality is that inequality with respect to capital is a far greater domestic issue than it is an international one.
The main force pushing toward reduction in inequality has always been the diffusion of knowledge and the diffusion of education.
Over a long period of time, the main force in favor of greater equality has been the diffusion of knowledge and skills.
There is one great advantage to being an academic economist in France: here, economists are not highly respected in the academic and intellectual world or by political and financial elites. Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.
When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.
Having a decent share of the national wealth for the middle class is not bad for growth. It is actually useful both for equity and efficiency reasons.
The natural effect of low interest is to increase trade and industry; because undertakings of every kind can be prosecuted with greater advantage.
The merchants will manage [commerce] the better, the more they are left free to manage for themselves.
Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.
A winner-takes-all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction.
It is particularly odd that economists who profess to be champions of a free-market economy, should go to such twists and turns to avoid facing the plain fact: that gold, that scarce and valuable market-produced metal, has always been, and will continue to be, by far the best money for human society.
If the job of capitalism is to create wealth for those who put up the capital, no fund group comes close to Vanguard's success in serving its owners. So we're probably as far away from communism as is realistically possible.
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