these are technical issues and for too long economists have

tried to pretend these are technical issues, you should leave them to us and you won't understand. i think what i'm trying to do with this book and the reason why people respond is that people want to understand these issues about income and wealth, issues are too important to be left to economists, they're to be left to everyone. >> charlie: >> there's a saying around here: you stand behind what you say. around here, we don't make excuses, we make commitments. and when you can't live up to them, you own up and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it, when you know where to look. additional funding provided by:

and by bloomberg. a provider of multimedia information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> charlie: thomas piketty is here. he has dedicated much of his career in understanding inequality around the world and in recent months ignited a heated global conversation. his book, "capital in the twenty-first century," argues unrestrained cap tillism appears to per fetch wait inequality. paul krugman calls it perhaps the most important book of the decade, and piketty-mania has been announced. last week the "new york times" published a rebuttal to much of

the data in the book. i am pleased to have thomas piketty at this table the first time. welcome. >> thank you. >> charlie: pleasure. explain the phenomenon about you and this book. >> you know, i tried to write a readable book and readable stories and money. you know, this is a book about the history of money, about the history of income and wealth in over 20 countries over two centuries and i really tried to make it accessible to everyone because this is of interest, you know, not only to economists but to everyone, because behind the story of money, you have not only an economic story but political control, literary story and, you know, i tried to put all of the stories together because -- people have been fighting about economics and this book will not put an end to

it but at least they'll know what they're fighting about. >> charlie: it adds fuel to the fire. >> yes, maybe it will lead to a more informed debate. that's the purpose. the purpose is not to make everybody agree, because these are so complicated issues, how could everybody agree. but at least it puts a lot of history on issues to which we look only from our little national angle and we only look at the past ten years, but these issues have been with us forever, and there's a lot to learn from the broad aspect. >> charlie: let me step back with you for a second. you had an extraordinary academic record. you were a young economist. you had some training in the united states at all? >> you know, i was in the united states as a young assistant professor, but my training was in france and london. >> charlie: at m.i.t.? i started my career as a professor at m.i.t. >> charlie: you were

different, though. you were not interested so much always in the way that economics was being written about. you were also interested in history. yes? >> yeah, that's right. yeah, i was -- you know, i could not see -- you know, i was doing mostly theoretical and mathematical research and writing down economic models -- >> charlie: which everybody else was doing. >> which everybody else was doing, and then i realized we knew very little about inequality, and there was all this data out there nobody had collected. so an american economist started doing that and then putting together the data from income taxes in the u.s. from 1915 to 1948, but then nobody was publishing this work probably

because it was too much. so -- >> charlie: so he gave you the model to go after the data you were looking for? >> yes, definitely. all i had been doing was a large number of colleagues to expand this historical work for much larger span of countries and time periods. it's easier today with the technology to get large amounts of data, including tax returns, sometimes dating back to the early 19th century. this is the kind of research that was much more difficult the do until, you know, ten or twenty years ago. >> charlie: and the focus with you to look at tax records, inheritance, look at that kind of information over a long period of history and see what question it answered, where did the income -- or where did the wealth come from, yes? >> right. so the big question is, when you

have growth in a country, do you have balance, distribution of growth, do different groups in society differ in proportion that's comparable, or sometimes groups are a lot more or less and what's the social distribution of growth. these are issues people were fighting about in the 19t 19th century and in the revolutions. and there was a lot of technical innovation. people were asking questions. in the 20th century, we started asking a different set of questions. the period -- the post-world war ii period was a period with balanced growth and a lot of groups in society benefiting

from growth. in the early 21st century we are starting to ask again the questions about the evolution of inequality with very little evidence. >> charlie: running to the conclusion for a moment -- if we don't do anything about it, is your notion that something will happen like the french revolution in which people really rebel about the system as a it is working? >> those are all the examples. you can have nationalist response, wars, discourse of hatred against foreigners. when you don't manage to solve your domestic social problems, you always find somebody to blame for it, and this generates all sorts of reactions which are difficult to predict. let me say right away that i don't say that things are necessarily going to become worse and worse in terms of

inequality. you know, i think there are different forces going on at the same time and, you know, you should look a at inequality from different countries. you have some forces that make inequality reduce over time, in particular distribution of knowledge, education, can be a big force toward reduction of inequality. we see that right now, you see emerging countries catching up with rich countries, and you can sometimes see that, within countries, educational institutions allow large groups of the population to access the right jobs. i'm not saying i know for sure what's going to happen. that would be stupid. i'm better at looking at the past than the future like

everybody else. the main message of the book is we need more financial transparency, more democratic transparency and incoming wealth so that, you know, we know how to react so we can adapt our policies. >> charlie: you have a simple answer which is a tax on global wealth. >> right, but the tax on wealth doesn't tell you at what tax rate, and as you can imagine, this is important. so all i am saying is if we have low tax rates to begin, with at least tax is a way to produce information. then our progress will defend on what we have found. so right now if we tax the kind of information that "forbes"

magazine has been publishing starting in 1987, you have the top of the world distribution of wealth -- you know, usually people take this information and say you have more billionaires today, this is a growing world economy. what you need to do is more complicated. you need to look at the average wealth and see how fast this has been growing since 1987, which is when forbes started the ranking. so, of course, it's not exactly the same people. some go out, some go in. but if we're in a stable distribution of wealth, they should go up in the same speed as the size of the world. now what we see according to forbes is they're going up at 6%, 7% a year, inflation, whereas average wealth in the world is going up at 2%. so this is three times faster

than the size of the world. nobody knows how fast this will go. but this is evidence we are at the shockingly rising concentration of wealth and, you know, there's no natural force that should bring this down to, you know, a reasonable proportion. capitalism will not self-correct? >> not self-correct. i think we need democratic institutions and democratic transparency to better measure how well these groups are doing. let me say right away the forbes ranking may be wrong. we could be overestimating what's going on. the thing is we don't have wealth tax because we don't have

automatic exchange of bank information. we've made progress with the swiss banks but we still need information about who owns what. then, you know, we don't really know, in fact. >> charlie: but your central point, to repeat what you just said, is that the global wealth of the very few is growing much faster than the growth rate of the global economy. >> my central point is that we don't really know, but from the evidence we have so far, which is imperfect evidence, it seems to me that it's about three times faster. >> charlie: three times faster. >> yes. from a theoretical perspective, there's no reason it should stop anytime soon. it will stop at some point. you can't have the top rising three times faster than the

economy of the world, at some point it has to stabilize and we don't know writ whether and it's frightening -- >> charlie: and if it doesn't stablstabilize? >> it should stop much before that. i'm not saying we're necessarily going to return to the kind of extreme concentration of wealth we had in the 19th century. as i said before, education can reduce inequality. so i don't believe in forces cessarily going in one direction, but this is a possibility and, you know, i think we need to be concerned about it. >> charlie: the time in history you pointed to was a time that it wasn't so. that was world war ii, and the aftermath of world war ii. that is a time in which the growth was not what sit today. >> the growth rate was a lot

larger in comparison to -- >> charlie: in comparison to the growth of the tiny 1%. >> right, but this is really due to unusual circumsnces. the tendency as i point out in my book is the rate of return in capital tends to be larger than the growth in the long run. this is what we have in the past before world war i. and what happens in the 20t 20th century is an unusual combinations of forces. you have world war i, world war ii, and reduction in the private rate of return in capital because of inflation, taxation to finance the world. in the post-war period you had unusual growth rate partly because of war reconstruction

and particle because of unusually large population growth. it's important to remember the demographic forces play quite a big role in my book and it's a very long run. that's important in the dynamic of inequality because you can see that in a country where everybody has ten children, limited wealth is not going to matter too much because you're going to have to divide everything by ten in the new generation. but in a country where the population stabilizes or in a country where it's about to go down, which is the case in a number of countries right now, then wealth inequality is naturally important.

the concentration of inequality of the wealth tends to be larger than the inequality of the labor income that we used to be accustomed to in the post-war period. >> charlie: there have been two principal arguments that comes from the financial times and the data, we'll talk about that in just a moment. >> we will. >> charlie: we will, exactly. and there are some who says your argument is too simplistic, that the reason to believe the rate of return on capital will not continue to outpace growth, that wealth and inequality will -- that wealth inequality will decrease. some argue when you look at the creation of wealth today, it's not so much inherited wealth as it is people starting businesses and making great wealth. it's not royalty. it's not inherited wealth that is so propelling the number of people who are getting so very rich.

>> right. so two responses. first, the share of the inherited wealth is rising again. you can see trust funds. you can see, you know, large pieces of inherited wealth. you know, sometimes you don't see them in wealth rankings as much as you should simply because it's easier to spot self-made wealth. it's hard to spot them in rankings. if you use all the data sources, you can see the return -- >> charlie: all the sources of wealth analysis. >> point number two, whether it is entrepreneurial or inherited wealth, the issue of an economy where the top of the wealth distribution, where does it come from? rise three times faster than the size of the economy. you know, you can see that you have a problem. where does the wealth come from? this means that the concentration of wealth at the top is rising very fast.

again, this will have to stop somewhere. >> charlie: will it create social tension? >> that's the mathematical law saying, okay, this is the point where as the world is going to fall apart. but history teaches us inequality is useful only up to a point. when it gets to an extreme, you know, then it's bad for growth because it limits the ability of new groups to enter economic gain and tends to have consequences for the political process. inequal access to political voice can be a serious issue. >> charlie: one of the loud cries of the political issues over the last ten years has been about tax cuts at a time in which there was rising inequality. >> and at a time when you have rising public debt and at a time where i think at the end of the day we are asking too much for

money creation and there are limits to what you can get from central banks. yo>> charlie: let me step back with you and your research. what were you interested in? some have said you were interested in researching inequality to better understand globalization, to better understand world events. i mean, that was the central curiosity you had. if there was rising inequality, what will be its impact on the way the world organizes itself? >> yeah, you know. first off, i was interested to set the facts right. there was data out there that had been collected and i did not know what i was going to find. >> charlie: it had to be in search of a question. it had to be a question. >> the big question is simple. you know, how does growth distributed between social groups, and there have been big fights over this issue in the 19th and 20th centuries, in

a way big fight about communityism and capitalism, with very little evidence. you know, people were fighting, people were making claims, but they did not know what they were fighting about. so the first objective is to put -- >> charlie: whose minds do you want to change? >> you know, i want to -- >> charlie: oh, come on... here's what you've said in the past. i want to change the amount of people who read books because they influence policy. you want to change policy. of course, you do. >> you know, i want to change the mind of people who read books. >> charlie: because they influence policy. >> yes, because knowledge is good in itself. it's good to know more about the society we live in and, of course, to contribute to make a better society, of course, there's that. but i think social knowledge is important. inequality is not really an

issue about taxation and political decisions in the political system. the inequality is also there in the life of people. in 19th century, you have wealth everywhere, not only because it matters for taxation but first of all because it matters for the life of people. it has an impact on who you marry and who you mate with, where you will go to school. sometime today you can bury your inhibitions with money. >> charlie: exactly. it's important for our social life in general and this is what i have been interested in. >> charlie: there are those who say that you're the first economist looking to make a significant point who also cites jane austin and other sources. >> yeah, you know, this was part of the way i asked the question to myself. so, you know, in jane austin,

you know, wealth is everywhere, and really ask questions about the consequences of the life of these people. so you have this famous discourse where a man says to this young man, your wage as a lawyer is not going to be sufficient, you have to marry this young lady out there, although she's not very beautiful, but that's the way you're going to make it. you know, for a long time, i have been asking to myself, you know, is this really how society worked at that time or is it only he was obsessed to pay back his debt? it was really part of our society was working. most societies of the past were based on a matmonial logic and situation of wealth.

we all see today's society is very different, of course. the question is why. what in the structure of modern economic growth has made labor income more important than inheriting wealth and is this forever? are we sure about that? what are the forces that makes the importance of wealth and labor in society? it's important in the life of people and the way they view society. let me say, you know, i think i've made progress in trying to solve these questions but we still need more data, we still need to have more countries. >> charlie: so what do you need more than data? >> i think we need to seek

knowledge. we need more ideas and suggestions about the processes that can explain what we -- >> charlie: you're being celebrated around the world, number one, on amazon, to cite one example. when you come to america, billionaires want to see you, government officials want to see you. they say you've given more attention to income inequality than the pope or president obama, you know, who it's part of their own mantra as to what is important to them to change in the world today. but here you come in a book that many say people are going to buy but not read. >> that would be sad. >> charlie: you've heard that before, have you not? >> yeah, i've heard it before. the problem is you see people who write about books without ever opening them. >> charlie: reviewers don't read it, they just write about it. >> some read it but some don't. yeah, i would be sad if people were just to put the book on their shelves. i think it's readable.

>> charlie: it's all about capital. >> let me say it's really a readable book. it's a story about the social groups that are behind the different income and wealth. it's a bit long. i apologize for it. it's about 20 countries over two centuries. so it's 100 pages long. you would be surprised. the fact that it's long, it's readable. >> charlie: i assume everything that's good that's happening is happening to you. what would you change? because there are critics that are beginning to say, well, the data doesn't match what he says and he may have modified the data this way or another -- i'm specifically thinking about the financial times. you say? >> well, i'm glad the books stimulate debate and -- >> charlie: well you say more than that. they're questioning your methods. >> well, everything is on the

line because i want to promote transparency in data. and when we collect more data in the future, we will -- >> charlie: well, but you made mistakes, would you say yes, i was wrong, it does not say what i said it said because i read it the wrong way or i looked at the data and it didn't say what i thought it said? >> no, it was the best possible theories i think we could have given this stage. the problem with the financial times claim is they are really making a lot of noise out of very little, to put it this way. you know, at the end of the day, you know, they make little corrections, which i didn't agree with for some of my these are, but most of the time -- >> charlie: sometimes they say -- >> now, the only country where they claim they have a different conclusion is for britnan the past 10 or 20 years. first of all, it's about 20

countries over two centuries. so the only problem is with one country in the past ten years and, you know, that would be already -- that would not be that much. now for the recent return, apparently sometimes people believe that wealth and equality is reduced in britnan the past 20 years, which is quite an incredible statement for a newspaper that's supposed to be specialized in financial matters because if you look at the prices in london and any ranking billionaire across the world, i think everybody can see that the top of the wealth distribution has been rising faster than average wealth in britain. if they don't see that, i think it's a bit sad for them, given what they're supposed to be good at. so, again, i think what we don't know, what we see at the very top of the wealth distribution

for billionaires also applies for people who are rich but are not billionaires. and we have very bad information. so if i want to take something from this controversy is indeed we know too little about wealth dynamics from the very recent period, and in a way we know more about wealth one century ago when there was no tax even and the data we have is actually better than what we have today. today we have a big problem with knowing too little about assets, you know, who owns what. the good news is that we can make progress. five years ago, everybody was

saying banks would be with -- swiss banks would be with us forever and there have been sanctions against some and we have more transparency now. the reason i am in favor of wealth tax and i agree with it, you know, it can be national wealth tax and corporations -- >> charlie: each country would apply it according to its own circumstances. >> of course, but there would be automatic exchange of information. remember, we have problems at the u.s. taxpayers -- we would not have the information about the u.s. taxpayers. so the banks will have to send the information. so this is kind of an intergovernmental cooperation. i don't have in mind a global tax. what i have in mind is better international coordination so that, you know, we have better knowledge of where the wealth is. again -- >> charlie: so you want more

transparency in where the wealth lies and how it was created. >> and what the groups are doing. we know too little about this. i don't claim the data we have is sufficient, certainly. >> charlie: and you also believe tax reform and all other kinds of things are insufficient to change? what we really have to have is significant new ideas of how we measure wealth with and how we tax wealth? tinkering with rates will not do it. >> right, we need to improve the existing system and promote new wealth. we need to improve our existing system of corporate taxation. right now you have nut nationals out there who are paying smaller tax than small businesses and it's crazy.

i think there could be a lot more in terms of fiscal cooperation, social and environmental norms. if you don't manage to make sure large corporations pay as much as small businesses, it's not going to work. so exchange of information on wealth, this is the issue, we need more international cooperation. >> charlie: is it fair? in all your modesty and the way you look at this week, you wanted to create a new conversation about global inequality, you wanted us to have a new way of thinking about figured out what you had to do was find a new kind of data that supported an idea you believed in. yes? i didn't start with an idea. >> charlie: you didn't? no. >> charlie: what did you think about inequality when you

started? that it might not be there? >> you have inequality. the question is does it increase or reduce over time. this question, i had no idea when i started. the result of this research is not that it's always rising, sometimes it goes down. >> charlie: but only in certain circumstances it goes down. >> with government policies -- >> charlie: with the way they came out of the great depression with governmental policies and war, sometimes they go down then. >> it's not only war and depression. for instance, education, free schools, that's very important. so, you know, it's not a story where it goes in only one direction, you know. it took me to the very end of this research when i came with the history and the returns, at the end of the data correction, i saw, well, this is a way to explain what we have. >> charlie: are you saying to

me that you and your two colleagues who worked hard with you in looking at the data a, correct. >> well, more. >> charlie: but two have gotten a lot of attention because of you, that you guys went in search of this and, all of a sudden, you said, oh, my god! look at what this shows! was that the response? >> of course. >> charlie: did you believe it? or did you say to your colleagues, i can't imagine it would be like this? >> well, you just have to look at the sequence of, you know, scientific papers and technical papers by all the people who have contributed to this in the past 20 years. i started working on this in france and then in the u.s. and. a tina and in india. you know, initially, we just didn't know what we were going to find. when i wrote the first paper on france, i didn't know what we

would find. >> charlie: then you found a pattern in every country? >> there are different patterns. you don't have the same evolution in every country. in one there's a rise of managers -- >> charlie: some more in tocks options. >> some things you see in the united states more than europe. there is importance on income and labor return, not same in different countries. the u.s. as a country used to be more than europe. in world war i, it was a fact that the concentration of wealth was a lot higher in europe than in the united states. today it is the opposite. so it's not as things are the same forever. you have big changes, which are due to policy, which are also due to demographic forces.

the key reason why historically it has been less important in the united states than europe is because of huge demographic growth. is it going to last forever? we don't know. the population of the united states used to be 100 million, 100 years ago. 3 million, two hundred years ago. now it's 300 million. you know, are you going to with 900- one century from now? maybe no, maybe yes. but what happens on the demographic forces will have a huge impact on inherited wealth and labor income. so the comparison between europe and the united states, when it comes to the relative importance of inheritance and labor income, it's influenced by this large differences in demographic. >> charlie: i don't know how to answer this question, but had no one -- why this book? why you? back to that point.

was it your method of analysis did no one ever think to look at the question you were in pursuit of and support it with data in the history of economics? simon keznitz? >> he did work in the 1950s. but what's really new is what we have been doing, with science and information technology, we have been able to collect much larger volumes of data on income and wealth than everyone before us and that's largely thanks to technology. sion had to do everything by hand. one difference is now that the cold war is over and, you know, it's been over 20 years, but when i started working, you know, i belonged to the generation who turned 18 in 1999, and i am the first

post-cold war generation and for my generation, it's easier to reopen the debate of, you know, inequality dynamics. in the cold war, you know, maybe it was more difficult to have a quiet conversation, when today i'm not sure we could have a quiet conversation. the financial times is accusing me of many things but they're not accusing me of supporting the soviet union. >> charlie: that's true. yes, so that one a problem. >> charlie: they're accusing you of playing with your data. >> you know, i've responded to that. >> charlie: i know you have. fair enough. and what's also interesting to me is if you look at the future, you believe that monetary policy and the federal reserve that that's not the solution, that what you have to have is a dramatic change in fiscal policy? >> right.

>> charlie: which means government action. yes? >> we have been asking too much of monetary policies in the past five years. it's much easier to create billions of dollars in one day than to write a tax code. but the problem is that sometimes you print all this money and you actually don't know what you're going to do with it. and sometimes you don't put it in the right place, and sometimes you actually contribute to some people get rich very fast but maybe not the right people. so fiscal policy, you know, it's more complicated. you get congress members, parliament in europe, it's very difficult to get these people to agree on a tax base. but at least when you have tax rates for different income groups you have a better sense of who will pay what and a better distribution of the

burden of the tax to serve the enterprises. >> charlie: whose economic model has served its people better, france or the united states? >> you know, i think there's a lot to learn. >> charlie: oh, come on! there's a lot to learn from every country and there's a lot to learn from the united states, there's a lot to learn from europe. let me give you two examples. i think the united states would have a lot to learn from europe when it comes to the healthcare system. it costs less, provides better health. >> charlie: institutions of higher education? >> yes, at least the united states has been more efficient at producing very tough schools. >> charlie: the 20 greatest universities in the world are here. >> that's what i'm saying. but it's interesting when you

look at the top two 2 * hundred or the top 500, the number of universities in europe is higher. but in the united states, you have 800 universities. the top extremely good, much better than europe, but the average is not so good. and this is creating a problem because i think you want to invest in skills in education in large groups of people, not just small ones. but i think in terms of the education system, i think europe has more to learn from the united states especially in the top institutions. when it comes to progressive taxation, it's important to remember progression taxation of income and integrated wealth was really invented in america. the united states is the first country that experiences, you know, large progress. at the time the united states

did not want to be as equal as in europe. it's a complicated story between united states and europe. both sides of the atlantic have a passion to address inequality and there's a lot to learn by looking at both sides. >> charlie: you're saying you're worried about patmonial capitalism controlled by family dynasties, that's an extension of what's happening today? >> that's a possibility not depending only on the policies but demographics. it depends on many things. >> charlie: do you recognize it's happened in our own history that people step forward and say if taxation is confiscatory, you eliminate incentive to create wealth and jobs, even though

your book suggests trickle down doesn't work and suggests it's being controlled more and more in a few hands rather than creating wealth that affects the income of large numbers of the middle class. >> you know, it's a matter of degree. the question is, for instance, when you pay the manager $10 million instead of 1-, do you get extra performance that justifies the $10 million. >> charlie: and you say? you have to look at the data. >> charlie: it's not about income and equality, it's also about c.e.o. compensation structure. >> it is, and the big part of the rise of inequality in america over the past 30 years has been the rise of top managerial compensation, and what i'm saying is that, you know, in the data, when you compare companies and you

compare industries and countries and you try to extract the performance, we've not seen it. of course, we need to pay managers well, but above a certain point, when you pay $10 million instead of $4 million and $50 million instead of $10 million, it's not clear if you get better performance in. this country, about two-third income growth has gone to the top 10% and most to the top 1%, now the gross performance of the country has not been that good. so if you have thee-quartz of that going to the top and it's not clear that it's a good deal for the middle class and for the rest of the population. >> charlie: and what about -- what's the best economic model you know, national economic model?

>> thsomewhere in the mid-atlantic -- >> charlie: somewhere between the u.s. and the european experience creates the perfect -- >> mm-hmm. sometime in the future we may have something to learn from china, sometime in the next 20 years. right now, they don't have it. right now we do it on a case-by-case basis. i think they're starting to realize this is not the proper way to regulate wealth and equality. actually, they're thinking of introducing a system of wealth taxation and maybe they do it before we do. >> charlie: here's an interesting question, too, for me. with income and equality being the focus of lots of conversation, lots of political rhetoric and coming from people who have captured the world's

attention like the pope, as you travel around and measure response to your book, not just by the paul krugmans of the world who we admire and sits at this table a lot, but a broad cross section of people, i mean, tell me what have you learned from that? is the level of concern bigger than you imagined? is this book a success, a measure of the level of concern? that people are looking for a formula to deal with something they know is not wrong -- is not right, or something that, over the long term, it is unhealthy if the broad middle class is not seeing the kind of growth in their own income to match or at least approach the kind of level of increase. >> yeah, what i can see, you

know, when i talk about it and, again, not only the universities -- >> charlie: especially not in universities. >> you know, i have been giving talks in many places, in little book shops with lots of people that you would not expect would read such a book, and what i could feel is that there's a strong need to, you know -- people know that the issues are important to everyone, to all of us and, you know, we don't -- these are not technical issues. for too long, you know, economists have tried to pretend these are technical issues, you should leave them to us and that, you know, you won't understand. i think what i'm trying to do with this book and the reason why people respond is that, you know, people want to understand these issues about income and wealth, these issues are too important to be left to economists, they belong to everyone and, you know, i can see that in the u.s. but i can

also see it in europe and latin america and, you know, yeah, i'm very glad that this book is, you know, attracting all these readers. >> charlie: knowing that you were coming, a friend of mine said today, you know, cane wrote his book about five or six years after the great depression and this book comes about five or six years after the great recession, the global recession brought about by sub-prime. >> no, i think, in the united states in particular, there is really a feeling right now that, you know, inequality has gone too far, that it has contributed to financial fragility, that it has contributed to the rise of odette because to have the tag nation of income and, in the past five years, again, the federal reserve has been able to at least get us out of bankruptcy and -- sphoo all of

>> charlie: all of which you admire? >> yes, but it's not enough. in the 1960s, they told us all we need is a good federal reserve. you don't need taxation or welfare, if you have a good federal reserve, that's fine. what this book is saying is it's good to have a good central bank, but that's not enough. you need a proper education system, proper welfare state, a proper taxation both on income and wealth and if we don't think that's true, then we will have a crisis again and we cannot ask too much just to have central banks to solve these problems. >> charlie: there are other economists like milton freedman who suggest it is "poisonous" to look at the distribution system. >> to me, it's a lack of confidence in democracy. it's not poisonous to have transparency and know more about

income and wealth and how the different groups are doing. let me say right away, to me, showing our wealth to different groups is not to conclude we'll solve every program just by taxing the top. but if we want to avoid national debate and hatred between social groups we just need more transparency about how the different groups are doing. >> charlie: and more taxation of the wealth of the -- >> depending on what we have. depending on what we see. if what we see in the data is that the different income and wealth groups are doing equally well and that they're all rising at the same rate, then why would you need more -- >> charlie: and when have you seen that since the 1980s? >> well, i can tell you rising inequality is much less of a concern in europe than the

united states. >> charlie: much less of a concern? >> much less of a concern, yes, because you don't have the strongly rising inequality in the netherlands, the sweden, in germany. you know, these countries have seen the information technology. it's not only in the united states. apparently, it did not generate the same kind of -- >> charlie: but one of the arguments -- >> yes. >> charlie: you finish. one of the arguments is what you have seen may change in its own evolution because of the rise of technology, may provide a way so that there will be a lessening of income inequality. >> the rise of technology will lead to a lessening of income inequality? >> charlie: yes. maybe, maybe not. you know, it depends. >> charlie: how could it lead to lessening of income inequality? >> lessening of income inequality?

well, the technology benefits and allows everyone to be more productive and even more so for the lowest productivity groups, then you would have a lessening of inequality. i think positive outcome is possible. we want to put technological and marketing forces in common interests and to make sure they always act in a common interest and every group benefits from growth and globalization in a balanced manner, then, you know, we need an adequate democratic institution to make sure this actually happens. >> charlie: how many copies have sold so far? >> i think about 400,000 in the english language, and a about 100,000 in -- >> charlie: so half a million

copies? >> at this stage. >> charlie: at this stage. how will it change your life? >> i don't know. i'm not sure it will change my life all that much, but, you know, i'm certainly doing more tv shows with you and other great people, so it's a nice opportunity to talk and, you know, i'm very glad to do that. >> charlie: but do you feel some incentive or a responsibility because you believe in the conclusions you've discovered and you believe that they're detrimental to a society? do you feel some incentive to do more? >> yes. yes, we expand, together with my colleagues, we're going to expand our database to emerging countries, to more and more countries. we are going to try and produce

a better and more systematic series on income and wealth inequality in the future. we're going to put everything on the line as we've always done and take into account the constructive remarks made by others, as long as they are constructive, you know, and we will try to move on in that direction. so, yes, we feel a responsibility because producing more on the income distribution and wealth, will infuse a more democratic debate. >> charlie: thank you for coming. it's a pleasure to have you here and an interesting conversation you contributed to and i suspect there will be more not only in the financial and political capital of the world but across the continents. so i thank you. >> thank you. >> charlie: the book is called "capital in the twenty-first century." thank you for joining us.

see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

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