In 2014, French economist Thomas Piketty became an international celebrity. Headlines everywhere proclaimed his meteoric rise. This was particularly astonishing in the United States where, as Paul Krugman noted in his review of Capital in the Twenty-First Century, few readers had previously heard his name.
But viewed from France, his book’s success has not been a complete surprise. For more than ten years now, Piketty has been one of the best-known economists in France and among the most active in public debate, especially since the publication in 2001 of his book Les hauts revenus en France au XXème siècle: Inégalités et redistribution, 1901–1998, which details the history of high incomes in the modern nation. This ambitious book laid the groundwork for the method and argument that are at the heart of Capital in the Twenty-First Century. Ever since, Piketty has been a mainstay in public debate—on matters of fiscal policy, above all, but also on questions of pension reform, high-priority educational policies, and a wide range of other social and economic issues. Upon its release in September 2013, the French version of Capital in the Twenty-First Century received extensive media coverage. The book had already sold very well in France before the second media blitz was unleashed by the triumph of the English version. By the end of 2013, it had sold forty to fifty thousand copies, a total that more than doubled six months later. Such success, for a 700-page book about economics written by a serious scholar, is unprecedented.
Will this impressive success have any real influence on economic policies? If Keynes’s famous maxim—“the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else”—is to be trusted, then we might expect Piketty’s book to lead, sooner or later, to a change in attitude within government circles and in public opinion regarding inequality and the accumulation of wealth. That would obviously be excellent news, not only for democratic societies but also for social scientists, who could find comforting proof that their patient efforts can change the world.
It’s much too early to see any such developments on an international level. But in France, Piketty’s ideas have already been fertilizing public debate for many years. To what degree have they influenced successive French administrations’ fiscal policy choices, if at all?
For such a young economist, Thomas Piketty has already had a long and successful career, both within France and abroad. Born in 1971, he graduated from high school at only sixteen before entering Paris’s prestigious École Normale Supérieure, where many of France’s elite professors, researchers, and public administrators are trained; at just twenty-two, he received his doctorate in economics and was hired as an assistant professor at MIT (a position he left two years later to return to France). Piketty broke every record for precociousness right up until, at barely thirty, he was named a directeur d’études (full professor) at the École des Hautes Études en Sciences Sociales (EHESS), a prestigious research institution. In 2002, he was named France’s best young economist by an important think tank, the Cercle des Économistes, and subsequently contributed to the launch of the Paris School of Economics in 2006.
Piketty’s work on inequality and redistribution quickly received international acclaim. His 2001 book Les hauts revenus en France au XXème siècle became the point of departure for a series of collective research projects that enabled economists to apply the same method to all countries where comparable fiscal data is available. It was in this book that Piketty first made the case that income inequality—which was very high in France in the early years of the twentieth century—drastically declined between the First World War and the 1970s. This was an effect, he argued, not of a mechanical process of convergence in standards of living (as the economist Simon Kuznets contended) but rather of the two world wars, the crisis of the 1930s, and the redistributive fiscal policies put in place by the French state beginning with the imposition of the income tax in 1914.
In 2003 Piketty’s follow-up study of the trajectory of high incomes in the United States in the twentieth century (co-authored with Emmanuel Saez, a French-born professor of economics at the University of California, Berkeley) was immediately recognized as authoritative. Together with Oxford’s Tony Atkinson, twenty-seven years his senior, Piketty went on to form an international team of researchers whose collective work on high incomes in Germany, Argentina, India, China, and other countries became the basis for the World Top Incomes Database, a free online resource compiling data on the evolution of income distribution in more than twenty countries over the course of the twentieth century and presenting it in interactive graphics. Capital in the Twenty-First Century constitutes the empirical and theoretical culmination of a project to which Piketty has patiently devoted himself, alone or in collaboration with his colleagues and doctoral students, since the late 1990s.
In 2011, the slender volume entitled Pour une révolution fiscale, which Piketty published in a series called La République des Idées (The Republic of Ideas) in collaboration with Saez and Camille Landais, reached an even larger audience, with sales in the tens of thousands and the launch of a companion website—since consulted by hundreds of thousands of visitors—that enables anyone to simulate the effects of proposed fiscal reforms and to find out where they themselves lie on the scale of income and wealth. When François Hollande challenged Nicolas Sarkozy in the 2012 French elections, the fiscal question was at the center of public debate, and the “Piketty reform”—which proposed most notably to “individualize” the progressive income tax (replacing France’s household-based income tax assessment system with one based solely on individual incomes) and to merge it with the Contribution Sociale Généralisée or CSG (instituted in 1990 by Socialist then–prime minister Michel Rocard, to finance France’s system of social protections)—polarized the electorate.
Piketty’s growing influence, both within the academy and outside, did not go unnoticed in the United States. In 2002, the New York Times devoted two articles to Piketty and Saez’s study on the development of high incomes in the United States. The Obama administration relied on a graph from the same study to illustrate a February 2009 budgetary document assessing the surge in high incomes in the United States. For the Wall Street Journal, this graph became the key to the newly elected president’s thinking. Moreover, it served as a source of inspiration to the entire American left. The stunning proof of this came in 2011 when the Occupy Wall Street movement adopted as its watchword the defense of the “99 percent” against the “1 percent,” a direct reference to the new framework for understanding social disparities that Piketty and his colleagues had helped to popularize (although few Occupiers were aware of their work).
What accounts for Piketty’s triumph? Clearly, the rigor of his work, his emphasis on empirical research rather than theoretical speculation, and his firm stance in the major debates of contemporary economics count for a great deal. Yet beyond this, his fame is the consequence of a deliberate, skillful attempt to communicate his findings to a wide audience. Few forms of public discourse have escaped his notice—from his monthly column in Libération (the leading left-leaning French newspaper) to 700-page books, with shorter books, manifestoes, and innovative websites studding his career along the way. As a member from 1999 to 2003 of the Conseil d’Analyse Économique (Council for Economic Analysis), which was founded in 1997 by then–prime minister Lionel Jospin, Piketty has worked close to the seat of power (although this young institution does not enjoy a degree of influence comparable to that of its American model, the Council of Economic Advisers). But he has since largely rejected this “insider” approach to politics; Piketty’s effort to appeal to a broader public reflects his conviction that the role of the economist is not primarily to furnish expertise in the service of political power, but to put the power of economic understanding in the hands of the public and facilitate democratic debate.
Not that Piketty’s efforts to link research, public debate, and economic policy have always been welcomed by the left. His first paper to garner attention outside the academy was a comparison of employment policies in France and the United States, published in 1997 by the influential Fondation Saint-Simon. This affiliation aroused the ire of those on the “left-wing of the left-wing,” who reproached the Fondation Saint-Simon—founded in the early 1980s by the historian François Furet to support exchanges among academics, high-level government officials, heads of corporations, and journalists—with promoting a form of “social-libéralisme,” akin to Bill Clinton’s welfare reforms in the United States. Some of Piketty’s proposals, which advocated reducing payroll taxes for low-paying jobs, were targeted by economists who saw in them an attempt to import poorly paid “American-style” jobs to France—although the author took care to explain that the goal of the proposed reforms, above all, was to return purchasing power to low-wage workers by shifting the tax burden to higher earners. At that time, the charges against Piketty struck a chord among leftists, who since 1995 had been outraged at the plan Juppé—which proposed pension reforms and social security cuts, igniting the largest wave of strikes and protests in France since May 1968.
A few years later, Piketty hailed the implementation under Jospin in 2001 of the prime pour l’emploi, a negative income tax intended to benefit low-income households, as a measure that marked for the French left, “the definitive repudiation of Marxism and its simplistic vision of inequality.” He sought rather to regulate the market without demonizing it. Piketty never missed a chance to condemn what he called the “cursory view” of the Communists, who he believed continued to “conceive of social inequality as a struggle between the Capital of the ‘two hundred families’ on the one hand and 99.9 percent of the population on the other”—which in retrospect appears rather paradoxical.
Piketty’s effort to appeal to a broader public reflects his conviction that the role of the economist is not primarily to furnish expertise in the service of political power, but to put the power of economic understanding in the hands of the public and facilitate democratic debate.
Piketty’s relationship with the French Socialist Party has been warmer, but not without its share of disputes. When his book on high incomes in France came out in 2001, he took the opportunity to strongly criticize the Socialist government’s fiscal initiatives—particularly those of then–finance minister Laurent Fabius, who proposed to lower income taxes on the middle class ahead of the 2002 presidential election. (Lionel Jospin’s elimination in the first round of voting amounted to a scathing repudiation of this electoral strategy.) A few years later, when the right was back in power and educational reform was the controversy du jour, Piketty issued a study with one of his doctoral students showing that the policy of designating priority educational zones—instituted by the Socialists in the early 1980s—would be capable of reducing inequalities in educational achievement, so long as the resources made available to neglected schools was considerably increased and the number of students in each class greatly reduced. In 2008, when the debate shifted to pension reform, Piketty co-wrote a short new work on the topic with Antoine Bozio, calling for the complete overhaul of a system that had become opaque and unfair and that, with its host of special exemptions and arcane rules for calculating benefits, was running a deficit. In its place, Piketty advocated the creation of a system of individual accounts, inspired by the Swedish reforms of the 1990s, which would allow each contributor to know the exact amount they would be entitled to upon retirement.
Each of Piketty’s proposed reforms has held to the same broad principle: a quest for transparency in the face of opaque, complex, and unjust institutions, based on the conviction that public access to information promotes the democratic functioning of institutions and undermines the secrecy that serves the interests of the wealthiest. This ethic of transparency, paired with calls for ambitious, progressive reforms—including reforms to pensions and income taxes—explains in no small part the success of Piketty’s ideas. But has that been enough to convert them into economic policies?
The French reception of Capital in the Twenty-First Century offers a glimpse of the nature of economic debate in France. As soon as it was released in September 2013, the book made front-page news in all the major French print media, and Piketty made the rounds on television as well. Right-wing critics were quick to weigh in. In Le Monde des Livres, one of the country’s most widely read literary supplements, the economist Jean-Marc Daniel (an engineer by training) condemned Piketty for succumbing to “the strangely seductive power exercised by statist and fiscalist Malthusianism over our most brilliant minds.” To him, advocating for a more progressive taxation on capital amounts to choosing equality and stagnation over growth and economic efficiency.The book’s historical section, which Daniel judged to be “detailed” but “tedious,” was very sharply dissociated from its implications in terms of economic policy, which were dismissed as the consequences of a “partisan” vision. On the editorial page of Le Point, a center-right weekly, Nicolas Baverez (an economist and attorney by training) rebuked Piketty’s book for its supposedly provincial Marxism—a quip soon echoed by many reviewers on the American right.
On the whole, any thorough discussion of the book’s contribution to economics was drowned out by the charged politics of France at the time.
On the whole, though, any thorough discussion of the book’s contribution to economics was drowned out by the charged politics of France at the time. The fall of 2013 was marked by numerous protests against the Socialists’ fiscal policies, with the “revolt” of the Breton bonnets rouges (red caps)—who demanded the abandonment of a tax on heavy freight transportation (the “ecotax”)—leading the government to radically change its line on taxation. The question of inequality in taxation yielded to that of the excessive burden that taxes place on economic growth.
Despite his critical stance toward its policies, Piketty is often said to be “close” to the Socialist Party, without his ever having joined it. Yet while his ideas might have been expected to directly inspire the Socialists who have held power in France since 2012, Capital in the Twenty-First Century does not, alas, seem to have caught the attention of government leaders. The Socialist minister of finance and public accounts, Michel Sapin, found the book “too heavy” for his taste.
Piketty, for his part, often needles François Hollande, the unpopular president, about his amateurism and perpetual improvisation, especially in fiscal matters. In early 2011, the two men argued during an interview organized by the information website Mediapart. Hollande, who was then running in the Socialist Party’s presidential primary, distanced himself from several of Piketty’s proposals, notably remarking that the imposition of a top income tax rate of 60 percent would appear “confiscatory” and yet would have “no effect”—raising very little money in practice, since the rich would do all they could to avoid it. However, one year later, to everyone’s surprise, Hollande announced his plan to tax incomes of over one million euros at a rate of 75 percent. This policy “coup” enabled Hollande to solidify his support on the left and helped him defeat the incumbent Nicolas Sarkozy. But implementing this tax was a difficult task, particularly after it was rejected by the Constitutional Council (on the grounds, essentially, that the introduction of an individual threshold to a tax system based on household income would introduce unconstitutional disparities). This incident signaled yet again the distance that separates an economist’s plan for reform, which aims to accomplish long-term structural changes, from the unpredictability of policies, which are always subject to strategic reversals and electoral calculations.
What about the Ministry of Economy and Finance, where the country’s fiscal and budgetary policies are decided? Piketty’s ideas are not very popular there either. This may have something to do with the way economics as a profession has been organized in France since the beginning of the twentieth century—namely, into several branches. Professors of economics succeeded only with difficulty in claiming their autonomy in the late nineteenth century, like their American and British counterparts. But in France they “cohabit” with economist-engineers trained at the grandes écoles and with senior administrative officials (trained at the ENA, or National School of Administration) who were responsible for the finest hours of central planning in the 1950s and 1960s. Bureaucrats, of course, have a much greater presence in French governmental ministries than do their academic colleagues. Public finances remain largely the preserve of high-level officials, especially the inspectors of the Inspection Générale des Finances (IGF; the General Inspection of Finances), who train their own successors at Sciences Po and the ENA. Piketty has often criticized the monopoly maintained by “Bercy” (the nickname of the Ministry of Economy and Finance, headquartered in a neighborhood on the east side of Paris) over its policy choices and the secrecy that enshrouds them. By allowing citizens to simulate the effects of proposed fiscal reforms on their own pocketbooks, the website Pour une Révolution Fiscale (which Piketty launched with his colleagues in 2011) aims to break the administration’s stranglehold on taxes and democratize debate over the country’s finances. But can the “fiscal revolution” that Piketty calls for be achieved without the administration’s consent?
As Thomas Piketty’s reception in France reveals, the relationship between popular economic ideas and economic policy is anything but linear. Economists have to contend with the principles and interests defended by high public officials, by the private sector, by interest groups, and, more broadly, by civil society as a whole. Many economists have chosen to negotiate these obstacles from within the antechambers of government ministries. Thomas Piketty, for the last fifteen years, has instead adopted the stance of the public intellectual—a classic, indeed conventional, mode of participating in French political and policy debate, but not one common to his discipline. In 2014, he was propelled to the status of global intellectual—a new type, both held in high esteem by his peers and idolized by partisans of left politics worldwide. Let us hope that Piketty’s canonization as a “rock star” of contemporary economics does not ultimately diminish the critical impact of his ideas—as capitalism has done to so many great thinkers in the past.
Nicolas Delalande is an associate professor in history at the Centre d’Histoire de Sciences Po (Centre for History at Sciences Po).
Translated from the French by Christopher Caines.