Watch: Europe should welcome immigrants, terror no excuse for closed doors, says Thomas Piketty

Is India the most unequal society in the world?

This is the question Thomas Piketty sought to answer in Saturday’s second session at the Times India Literature Festival 2015.

Piketty spoke at Mehboob Studios, Mumbai about his study, conducted with the Indian economist Abhijit Banerjee, on income inequality levels that were prevalent in India more than 10 years ago. The French economist, who splits time between institutions in London, Paris and Massachusetts, covered a breadth of subjects, from philanthropic capitalism to progressive taxation.

Following his lecture, Firstpost spoke to Piketty about India in the context of global inequality.

We also asked him about immigration in France in particular, and Europe at large, big data, India’s position at the climate change summit and the stance it has adopted in the context of positive discrimination.

Piketty said that India should increase public expenditure to change the political narrative, and emphasised on incomplete income tax data with which India still makes do, and how that needs to change quickly.

Watch the interview here:

http://av.firstpost.com/2015/12/Thomas-piketty_fp.mp4

Transcript of Firstpost ’s full conversation with Thomas Piketty

What Bill Gates told him

I don’t want to pay more tax. I’m ready to pay more taxes if it is only on consumption. The problem lies in the fact that when you’re very rich you not only consume food, you’re consuming politicians, journalists etc. His idea is that you should not pay tax only because you’re consuming. One basis of taxation could be the ability to influence. You know, the whole thing he is doing is to minimise his tax now by linking the way he contributes to tax with his family – his wife and daughter. It is just another way to preserve economic power in our times. He is presenting this as philanthropy. And within a group of people it seems that preserving power within themselves can be very useful. But you have two conditions: One is that you have to give away the power as taxation, and the other being if you have to continue philanthropy then you have to transfer control to someone other than your family. If you’re the member of a board and your wife is the member of that board then this is just retaining control and not philanthropy.

I want India to be optimistic

I want India to learn from the history of the social elites of other countries – those who accepted fiscal reforms only after violent shocks and strong pressures. In the west it was the World War I, the Great Depression, World War 2 and the Bolshevik revolution and the existence of its communist counterpart. But some people have very pessimistic views and say only if you have huge violent shocks can you change. I don’t have this. I think you can learn from history. I think India is in a condition of minor shift. It isn’t like everything is wrong in India. But at some point in the future, India will have to look at positive discrimination not just in terms of caste but also income.

Inequality and terrorism

[First> There is an indirect link between capitalism and inequality and it’s a complicated link. There is so much wealth in small territories and small populations due to the concentration of oil resources; for example on the one hand Egypt, a country that has crossed a population of 100 million, and Qatar a small state on the other. [As for terror and inequality> Take the example of the Paris attacks, carried out by 20-year-olds. They weren’t from poor Muslim countries. But when you see the unemployment trend in France you will see the inclination [towards such acts> because discrimination results in rejection from jobs; even when you have the right degree, you send your CV and you don’t get a job. I’m not saying there is a direct link to terrorism, but it is a part of the problem.

Immigration policy in France and Europe

I think Europe could and should welcome immigrants. It is important to remember that before the financial crisis of 2008/9, there was a large inflow of migrants. Unemployment was going down. It was going well. It’s only after the recession that unemployment and bad austerity measures led to an anti-immigrant feeling. I think it would be a big mistake to use terrorist attacks as an excuse to close the doors. It is always tempting for politicians to blame foreign workers when they can’t find solutions (by which I mean reducing inequality). It is disgusting and isn’t going to solve the problem. This is the politics of hate. [As for the rest of Europe> Do you think Germany is welcoming immigrants because it’s a welfare state? A part of the explanation for this is that Germans don’t have many children. The population is on the decline. I think that Europe as a whole needs to open borders. This transcript has been edited slightly for clarity.