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Thomas Piketty to Indias Elite: Learn From History - NYTimes.com

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LETTER FROM INDIA

Thomas Piketty to Indias Elite: Learn From

History

The French economist Thomas Piketty argues that billionaires should be taxed heavily as a way of dealing with a
growing economic inequality that he sees as harmful for both society and the economy.
FRED DUFOUR / AGENCE FRANCE-PRESSE GETTY IMAGES

ByMANUJOSEPH
DECEMBER 9, 2015

MUMBAI, India Many people in the room were seeking Thomas Pikettys
attention, but what caught his eye was a small photograph of Bill Gates in a
newspaper. My friend, he said with a chuckle.
In his recent, celebrated book, Capital in the Twenty-First Century, Mr. Piketty, a
French economist, argues that billionaires should be taxed heavily, as a way of
dealing with the growing inequality that he sees as being as harmful for the
economy as for society. Mr. Gates, he said, had wished to meet him, but invited
him to another planet, by which Mr. Piketty meant someplace outside Europe.
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Thomas Piketty to Indias Elite: Learn From History - NYTimes.com

So we Skyped.
Yet, Mr. Piketty seemed happy to be on another planet last week, visiting Mumbai
for a major cultural event, Times Litfest, where he gave a lecture on India as a
vastly unequal place. Afterward, he was mobbed by fans, some of whom introduced
themselves by way of the American universities they had attended. Harvard, one
man said. Harvard, the mans wife, too, said.
After he fled to the authors lounge, Mr. Piketty told me that he found the elite of
India hypocritical for urging their government to address inequality by pouring
resources into economic development, like building infrastructure or helping
selected industries. This is self-serving, he says, and only increases the gap between
the rich and the poor. In his opinion, governments should find the means to invest
more in social welfare, like primary education and health care.
Before the world wars, he said, the French elite used to say the same things that
the Indian elite now say, that inequality would be reduced with rising
development. But after the wars, he said, the French began to see that direct
investment in welfare was the way forward.
I hope the Indian elite learn from the stupid mistakes of the other elites, he said.
Learn from history.
India is just emerging from what many regard as a catastrophic experiment in a
type of socialism, the sort that economists like Amartya Sen, the Nobel laureate,
say was not socialism in the first place, because it neglected health care and
primary education. What the Indian elite learned from that history was to fear and
loathe the idea of the welfare state.
In 1991, India reached the nadir of an economic crisis that forced it, in exchange for
a financial rescue from the International Monetary Fund, to begin liberalizing its
economy along the free market lines that were championed then by Washington. In
the years that followed, the rich and the educated benefited the most, though the
poor are better off today than they were before those changes.
Having prospered in recent decades, the Indian elite have faith in this economic
model. But there is also a wide acceptance that Indias inadequate investments in
education and health are holding the nation back.
The problems India is trying to solve are problems other countries are trying to
solve, Mr. Piketty had said during his lecture. India is trying to solve very
complicated problems.
Mr. Piketty sees the harmful effects of inequality behind many of the worlds
problems today. After the recent attacks in Paris, he said that gross inequality in
the Middle East might have contributed to terrorism, though that could not be the
only factor. It cannot explain why Indias 180 million Muslims, most of them poor,
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Thomas Piketty to Indias Elite: Learn From History - NYTimes.com

have so far been a moderate population. Or why so many militant leaders, like
Osama bin Laden, often emerge from the economic elite, or at least from the
middle class.
The reasons for terrorism are complex, he told me.
Mr. Piketty himself is a rich man now, his book having sold more than a million
copies. Has that led him to acquire any new sympathies for the rich?
I pay 60 percent as tax, he said. I would like to pay 90 percent. He grew a bit
thoughtful and said, I would like to pay 95 percent.

Manu Joseph is author of the novel The Illicit Happiness of Other People.

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