Thomas Piketty, growth, distribution and the environment

Abstract

This chapter examines the distributional implications of Thomas Piketty’s Capital in the Twenty-First Century and relates them to the problem of achieving greater environmental sustainability. If Piketty’s arguments are correct, then slower economic growth will lead to much higher income and wealth inequality. On the other hand, rapid economic growth (as measured by gross domestic product) leads to immense biophysical strain from pollution, climate change, species extinction and other maladies. Reducing economic growth to a more steady state (low-growth or no-growth) level is desirable for ecological reasons; but the work of Piketty leads to the conclusion that it will be necessary to enact policies that combat rising inequality – otherwise, the burden of lower growth will fall on the poor and working class. This chapter discusses how Piketty’s tax policies and some other tax policies could help reduce income and wealth inequality and support the steady state at the same time. In addition, programs promoting green jobs, education and infrastructure can contribute to greater environmental sustainability as well as income and wealth equality.