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Piketty challenges us to consider if we need to rein in wealth inequality

Frank Stilwell writes in The Conversation (26.10.16) about the latest musings from leading French economist, Thomas Piketty, pointing out that while some people may think wealth inequality is a good thing, there’s plenty of evidence to show the societal problems it causes.

‘French economist Thomas Piketty, currently in Australia, is known for his focus in on the inequality of wealth. His book on the topic has sold two and a half million copies worldwide, which is quite amazing for a book full of economic statistics and graphs.

‘Piketty concludes, optimistically, by saying that we don’t have to accept the inevitability of wealth inequality. If there were the political will we could, as a society, reduce inequality. This includes his argument for an inheritance tax.

‘Piketty spends less time explaining why excessive wealth inequality matters. This requires more attention because we cannot presume that there is sufficiently widespread public knowledge about the importance of the issue.

‘Some people evidently think wealth inequality is a good thing, because they believe it creates stronger economic incentives. It is that sort of reasoning that leads them to favour the Turnbull government’s proposed cuts to company tax rates, even though it would create yet more economic inequalities.

‘Meanwhile the International Monetary Fund has published research showing that more equality is also conducive to superior macroeconomic performance. Coming from such a usually conservative source, that should shake the belief that inequality is good for the economy.’

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