The funds invested by governments benefit the rich more than the poor, this is essentially the words of Thomas Piketty, director of studies at the École des Hautes Etudes en Sciences Sociales and professor at the Paris School of Economics, who granted an interview to the show Economy zone broadcast on ICI RDI.
The economist, who is also the author of the bestselling book Capital in the 21st century, considers that the health crisis has highlighted the wealth gap.
This epidemic reveals all the violence of these social inequalities, he says.
He explains that wealthy people who own a large house in the countryside and financial reserves have not been hit hard by containment due to the pandemic.
In return, people who live in small accommodation in the city, who have a precarious employment status such as self-employed workers or whose citizenship papers are not in order have been more affected.
Since 2008, it is somewhat one of the limits of these monetary creation policies, it is that it has not always necessarily benefited the most modest.
He believes that the monetary policy of central banks has helped stimulate stock and real estate prices and that this has made it possible to enrich the better-off.
The expert points out that people who have sufficient borrowing capacity and legal, tax and financial expertise can take advantage of the opportunity to invest in investments and get richer.
All this monetary policy, it has also contributed to increasing the inequality of returns on capital obtained by different levels of financial portfolios and different levels of wealth. On the one hand, we solve the problem of public debt, but on the other we create another problem by contributing to exacerbate wealth inequalities., he notes.
Rather, the professor pleads for a reduction in income gaps directly at source.
I think that this monetary creation should be used more to, for example, increase the salaries of nurses or teachers, create more jobs in health, in education, he said.
Increasing the remuneration of these workers would entail a displacement of
inflation, which is currently on asset prices, stock prices, real estate prices, on prices and wages.
In doing so, according to him, such an intervention should be stopped with the attainment of inflation of 3 to 4%. Now, he warns,
we are very far from that. Today, we have very low inflation.
He therefore recommends
transfer the use of this money creation to things that are more useful, as an investment in the environment.
There are a lot of jobs to be created in the thermal renovation of buildings, he cites as an example.
After having taken care of an adjustment in the remuneration of workers by reducing the wage differentials, the time will come to address the question of taxes, argues Thomas Piketty.
In the end, to pay off debt and finance social spending, you need a tax system, he said.
Too often we refrain from thinking about another economic system. We closed the discussion a bit on different possible economic systems. This sometimes contributes to this shift of the political conflict towards questions, towards nationalist postures, identity folds that prevent problems from being resolved., he says.