,SOAK ! ,RI* 
,AN EX*ANGE ON CAPITAL1 DEBT1 & ! FUTURE 

,PEOPLE 3 

,AU?OR 3 ,DAVID ,GRAEB] 

,AU?OR 3 ,?OMAS ,PIKETTY 

,TEXT 3 

,?IS EX*ANGE IS FROM A CONV]SATION 9 ,P>IS BETWE5 ,DAVID ,GRAEB] & ,?OMAS ,PIKETTY1 DISC\RS+ ON ! DEEP %IT WE'RE ALL 9 & :AT WE MI<T DO AB\T CLIMB+ \T4 ,IT WAS HELD AT ! ,ECOLE ,NORMALE ,SUP]IEURE2 MOD]AT$ BY ,JOSEPH ,CONFAVREUX & ,JADE ,L9DGA>D2 $IT$ BY ,$WY ,PL5EL2 FIR/ PUBLI%$ BY ! ,FR5* MAGAZ9E ,M$IAP>T LA/ ,OCTOB]2 & TRANSLAT$ FROM ! ,FR5* = ,! ,BAFFL] BY ,DONALD ,NI*OLSON-,SMI?4 

,MOD]ATORS3 ,Y\ BO? APPE> TO ?9K ?AT ! PREVAIL+ ECONOMIC & F9ANCIAL SY/EM HAS RUN ITS C\RSE1 & CANNOT 5DURE MU* LONG] 9 ITS PRES5T =M4 ,I W\LD LIKE TO ASK EA* ( Y\ TO EXPLA9 :Y4 

,?OMAS ,PIKETTY3 ,I AM NOT SURE ?AT WE >E ON ! EVE ( A COLLAPSE ( ! SY/EM1 AT LEA/ NOT FROM A PURELY ECONOMIC VIEWPO9T4 ,A LOT DEP5DS ON POLITICAL REACTIONS & ON ! ABILITY ( ! ELITES TO P]SUADE ! RE/ ( ! POPULATION ?AT ! PRES5T SITUATION IS ACCEPTABLE4 ,IF AN EFFECTIVE APP>ATUS ( P]SUASION IS 9 PLACE1 !RE IS NO REASON :Y ! SY/EM %\LD NOT CONT9UE TO EXI/ AS IT IS4 ,I DO NOT BELIEVE ?AT /RICTLY ECONOMIC FACTORS CAN PRECIPITATE ITS FALL4 

,K>L ,M>X ?\<T ?AT ! FALL+ RATE ( PR(IT W\LD 9EVITABLY BR+ AB\T ! FALL ( ! CAPITALI/ SY/EM4 ,9 A S5SE1 ,I AM MORE PESSIMI/IC ?AN ,M>X1 BECAUSE EV5 GIV5 A /ABLE RATE ( RETURN ON CAPITAL1 SAY >\ND #e P]C5T ON AV]AGE1 & /EADY GR[?1 WEAL? W\LD CONT9UE TO CONC5TRATE1 & ! RATE ( ACCUMULATION ( 9H]IT$ WEAL? W\LD GO ON 9CREAS+4 

,BUT1 9 ITSELF1 ?IS DOES NOT MEAN AN ECONOMIC COLLAPSE WILL OCCUR4 ,MY !SIS IS ?US DIFF]5T FROM ,M>X'S1 & ALSO FROM ,DAVID ,GRAEB]'S4 ,AN EXPLOSION ( DEBT1 ESPECIALLY ,AM]ICAN DEBT1 IS C]TA9LY HAPP5+1 AS WE HAVE ALL OBS]V$1 BUT AT ! SAME TIME !RE IS A VA/ 9CREASE 9 CAPITAL--AN 9CREASE F> GREAT] ?AN ?AT ( TOTAL DEBT4 

,! CREATION ( NET WEAL? IS ?US POSITIVE1 BECAUSE CAPITAL GR[? SURPASSES EV5 ! 9CREASE 9 DEBT4 ,I AM NOT SAY+ ?AT ?IS IS NECESS>ILY A GOOD ?+4 ,I AM SAY+ ?AT !RE IS NO PURELY ECONOMIC JU/IFICATION = CLAIM+ ?AT ?IS PH5OM5ON 5TAILS ! COLLAPSE ( ! SY/EM4 

,MOD]ATORS3 ,BUT Y\ /ILL SAY ! LEVEL ( 9EQUALITY HAS BECOME 9TOL]ABLE8 

,PIKETTY3 ,YES4 ,BUT !RE AGA91 ! APP>ATUS ( P]SUASION--OR ( REPRESSION1 OR A COMB9ATION ( ! TWO1 DEP5D+ ON :AT C\NTRY Y\ >E CONSID]+--MAY ALL[ ! PRES5T SITUATION TO P]SI/4 ,A C5TURY AGO1 DESPITE UNIV]SAL SUFFRAGE1 ! ELITES ( ! 9DU/RIALIZ$ C\NTRIES SUCCE$$ 9 PREV5T+ ANY PROGRESSIVE TAXES4 ,IT TOOK ,WORLD ,W> ,I TO BR+ AB\T A PROGRESSIVE 9COME TAX4 

,DAVID ,GRAEB]3 ,BUT ! 9DEBT$NESS ( ONE P]SON HAS TO IMPLY ! 5RI*M5T ( ANO!R1 DON'T Y\ ?9K8 

,PIKETTY3 ,?AT IS AN 9T]E/+ QUE/ION4 ,I LOV$ Y\R BOOK1 BY ! WAY4 ,! ONLY CRITICISM ,I W\LD HAVE IS ?AT CAPITAL CANNOT BE R$UC$ TO DEBT4 ,IT IS TRUE ?AT MORE DEBT = SOME1 PUBLIC OR PRIVATE1 IS B\ND TO 9CREASE ! RES\RCES ( O!RS4 ,BUT Y\ DO NOT DIRECTLY ADDRESS POSSIBLE DIFF]5CES BETWE5 DEBT & CAPITAL4 ,Y\ >GUE AS IF ! HI/ORY ( CAPITAL W]E 9DI/+UI%ABLE FROM ?AT ( DEBT4 ,I ?9K Y\ >E RI<T TO SAY ?AT DEBT PLAYS A MU* MORE SIGNIFICANT HI/ORICAL P>T ?AN HAS BE5 ASSUM$--ESPECIALLY :5 Y\ DISMISS ! FAIRY TALES RETAIL$ BY ECONOMI/S CONC]N+ CAPITAL ACCUMULATION1 B>T]1 ! 9V5TION ( MONEY1 OR MONET>Y EX*ANGE4 ,! WAY Y\ R$IRECT \R ATT5TION BY /RESS+ ! RELATION%IPS ( P[] & DOM9ATION ?AT UND]LIE RELATION%IPS ( 9DEBT$NESS IS ADMIRABLE4 ,! FACT REMA9S ?AT CAPITAL IS USEFUL 9 ITSELF4 ,! 9EQUALITIES ASSOCIAT$ ) IT >E PROBLEMATIC1 BUT NOT CAPITAL P] SE4 ,& !RE IS MU* MORE CAPITAL TODAY ?AN =M]LY4 

,GRAEB]3 ,I DO NOT MEAN TO SAY ?AT CAPITAL IS R$UCIBLE TO DEBT4 ,BUT ! ABSOLUTE OPPOSITE IS :AT EV]YBODY IS TOLD1 & IT IS \R TASK TO FILL 9 ! BLANKS LEFT BY ?AT ACC\NT ) RESPECT TO ! HI/ORY ( WAGE LABOR1 9DU/RIAL CAPITALISM1 & E>LY =MS ( CAPITAL4 ,:Y DO Y\ SAY ?AT RES\RCES 9CREASE EV5 AS DEBT 9CREASES8 

,PIKETTY3 ,NET WEAL? HAS 9CREAS$--0WEAL?0 MEAN+ RES\RCES 9ASMU* AS WE CAN CALCULATE !M4 ,& ?IS IS TRUE EV5 :5 DEBT IS TAK5 9TO ACC\NT4 

,GRAEB]3 ,Y\ MEAN TO SAY ?AT !RE IS N[ MORE WEAL? P] CAPITA ?AN BE=E8 

,PIKETTY3 ,CLE>LY1 YES4 ,TAKE H\S+4 ,NOT ONLY IS !RE MORE H\S+ N[ ?AN FIFTY OR A HUNDR$ YE>S AGO1 BUT1 BY YE> ( PRODUCTION1 H\S+1 NET ( DEBT1 IS 9CREAS+4 ,ON ! BASIS ( ANNUAL ,G,N,P1 IF Y\ CALCULATE NATIONAL CAPITAL 7DEF9$ AS ALL REV5UE 5G5D]$ BY ECONOMIC ACTIVITY7 & !N ! TOTAL 9DEBT$NESS ( ALL PUBLIC & PRIVATE ACTORS 9 ! C\NTRY1 ! =M] WILL BE SE5 TO HAVE 9CREAS$ RELATIVE TO ! LATT] 9 ALL ! RI* C\NTRIES4 ,?IS 9CREASE IS SOME:AT LESS SPECTACUL> 9 ! ,UNIT$ ,/ATES ?AN 9 ,EUROPE & ,JAPAN1 BUT IT EXI/S NEV]!LESS4 ,RES\RCES >E 9CREAS+ MU* FA/] ?AN DEBT4 

,GRAEB]3 ,GETT+ BACK TO ! ORIG9AL QUE/ION1 ! POSSIBLE COLLAPSE ( ! SY/EM1 ,I ?9K ?AT HI/ORICAL =ECA/S ( ?IS K9D >E A TRAP4 ,:AT IS C]TA9 IS ?AT ALL SY/EMS MU/ 5D1 BUT IT IS V]Y H>D TO PR$ICT :5 ! 5D MI<T COME4 ,SIGNS ( A SL[+ D[N ( ! CAPITALI/ SY/EM >E VISIBLE4 ,SO F> AS TE*NOLOGY IS CONC]N$1 WE NO LONG] HAVE ! S5SE1 AS WE DID 9 ! #a#i#fS & #a#i#gS1 ?AT WE >E AB\T TO SEE GREAT 9NOVATIONS4 ,9 T]MS ( POLITICAL VISIONS1 WE SEEM TO BE V]Y F> FROM ! GR& PROJECTS ( ! PO/W> P]IOD1 SU* AS ! ,UNIT$ ,NATIONS OR ! 9ITIATION ( A SPACE PROGRAM4 ,U4,S4 ELITES CAN'T ACT ON CLIMATE *ANGE1 EV5 ?\< IT PUTS \R ECOSY/EM & HUMAN LIFE ITSELF 9 JEOP>DY4 ,\R FEEL+S ( HELPLESSNESS /EM FROM ! FACT ?AT = ?IRTY YE>S ! TOOLS ( P]SUASION & CO]CION HAVE BE5 MOBILIZ$ TO WAGE AN IDEOLOGICAL W> = CAPITALISM1 RA!R ?AN TO CREATE CONDITIONS = CAPITALISM TO REMA9 VIABLE4 ,NEOLIB]ALISM PLACES POLITICAL & IDEOLOGICAL CONSID]ATIONS ABOVE ECONOMIC ONES4 ,! RESULT HAS BE5 A CAMPAIGN ( FANTASY MANIPULATION1 A CAMPAIGN SO EFFECTIVE ?AT PEOPLE ) DEAD-5D JOBS N[ BELIEVE ?AT !RE IS NO ALT]NATIVE4 

,IT IS QUITE CLE> ?AT ?IS IDEOLOGICAL HEGEMONY HAS N[ REA*$ ITS LIMIT4 ,DOES ?IS MEAN ?AT ! SY/EM IS ON ! PO9T ( COLLAPSE8 ,IT'S H>D TO SAY4 ,BUT CAPITALISM IS NOT OLD4 ,IT HASN'T BE5 >\ND =EV]1 & IT SEEMS JU/ AS REASONABLE TO IMAG9E IT CAN BE TRANS=M$ 9TO SOME?+ COMPLETELY DIFF]5T AS TO IMAG9E IT WILL NECESS>ILY CONT9UE EXI/+ UNTIL ! SUN BL[S UP1 OR UNTIL IT ANNIHILATES US ?R\< SOME ECOLOGICAL CATA/ROPHE4 

,MOD]ATORS3 ,IS CAPITALISM ITSELF ! CAUSE ( ! PROBLEM1 OR CAN IT BE RE=M$8 

,PIKETTY3 ,ONE ( ! PO9TS ?AT ,I MO/ APPRECIATE 9 ,DAVID ,GRAEB]'S BOOK IS ! L9K HE %[S BETWE5 SLAV]Y & PUBLIC DEBT4 ,! MO/ EXTREME =M ( DEBT1 HE SAYS1 IS SLAV]Y3 SLAVES BELONG =EV] TO SOMEBODY ELSE1 & SO1 POT5TIALLY1 DO !IR *ILDR54 ,9 PR9CIPLE1 ONE ( ! GREAT ADVANCES ( CIVILIZATION HAS BE5 ! ABOLITION ( SLAV]Y4 

,AS ,GRAEB] EXPLA9S1 ! 9T]G5]ATIONAL TRANSMISSION ( DEBT ?AT SLAV]Y EMBODI$ HAS F\ND A MOD]N =M 9 ! GR[+ PUBLIC DEBT1 :I* ALL[S = ! TRANSF] ( ONE G5]ATION'S 9DEBT$NESS TO ! NEXT4 ,IT IS POSSIBLE TO PICTURE AN EXTREME 9/ANCE ( ?IS1 ) AN 9F9ITE QUANTITY ( PUBLIC DEBT AM\NT+ TO NOT JU/ ONE1 BUT T5 OR TW5TY YE>S ( ,G,N,P1 & 9 EFFECT CREAT+ :AT IS1 = ALL 9T5TS & PURPOSES1 A SLAVE SOCIETY1 9 :I* ALL PRODUCTION & ALL WEAL? CREATION IS D$ICAT$ TO ! REPAYM5T ( DEBT4 ,9 ?AT WAY1 ! GREAT MAJORITY W\LD BE SLAVES TO A M9ORITY1 IMPLY+ A REV]SION TO ! BEG9N+S ( \R HI/ORY4 

,9 ACTUALITY1 WE >E NOT YET AT ?AT PO9T4 ,!RE IS /ILL PL5TY ( CAPITAL TO C\NT]ACT DEBT4 ,BUT ?IS WAY ( LOOK+ AT ?+S HELPS US UND]/& \R /RANGE SITUATION1 9 :I* DEBTORS >E HELD CULPABLE & WE >E CONT9UALLY ASSAIL$ BY ! CLAIM ?AT EA* ( US 0[NS0 BETWE5 ?IRTY & =TY ?\S& EUROS ( ! NATION'S PUBLIC DEBT4 

,?IS IS P>TICUL>LY CRAZY BECAUSE1 AS ,I SAY1 \R RES\RCES SURPASS \R DEBT4 ,A L>GE PORTION ( ! POPULATION [NS V]Y LITTLE CAPITAL 9DIVIDUALLY1 S9CE CAPITAL IS SO HI<LY CONC5TRAT$4 ,UNTIL ! N9ETE5? C5TURY1 #i P]C5T ( ACCUMULAT$ CAPITAL BELONG$ TO #a P]C5T ( ! POPULATION4 ,TODAY ?+S >E A LITTLE DIFF]5T4 ,9 ! ,UNIT$ ,/ATES1 #gc P]C5T ( CAPITAL BELONGS TO ! RI*E/ #a P]C5T4 ,?IS DEGREE ( CONC5TRATION /ILL MEANS ?AT HALF ! POPULATION [NS NO?+ BUT DEBT4 ,= ?IS HALF1 ! P] CAPITA PUBLIC DEBT ?US EXCE$S :AT !Y POSSESS4 ,BUT ! O!R HALF ( ! POPULATION [NS MORE CAPITAL ?AN DEBT1 SO IT IS AN ABSURDITY TO LAY ! BLAME ON POPULATIONS 9 ORD] TO JU/IFY AU/]ITY MEASURES4 

,BUT = ALL ?AT1 IS ! ELIM9ATION ( DEBT ! SOLUTION1 AS ,GRAEB] WRITES8 ,I HAVE NO?+ AGA9/ ?IS1 BUT ,I AM MORE FAVORABLE TO A PROGRESSIVE TAX ON 9H]IT$ WEAL? ALONG ) HI< TAX RATES = ! UPP] BRACKETS4 ,:Y8 ,! QUE/ION IS3 ,:AT AB\T ! DAY AFT]8 ,:AT DO WE DO ONCE DEBT HAS BE5 ELIM9AT$8 ,:AT IS ! PLAN8 ,ELIM9AT+ DEBT IMPLIES TREAT+ ! LA/ CR$ITOR1 ! ULTIMATE HOLD] ( DEBT1 AS ! RESPONSIBLE P>TY4 ,BUT ! SY/EM ( F9ANCIAL TRANSACTIONS AS IT ACTUALLY OP]ATES ALL[S ! MO/ IMPORTANT PLAY]S TO DISPOSE ( LETT]S ( CR$IT WELL BE=E DEBT IS =GIV54 ,! ULTIMATE CR$ITOR1 ?ANKS TO ! SY/EM ( 9T]M$I>IES1 MAY NOT BE ESPECIALLY RI*4 ,?US CANCEL+ DEBT DOES NOT NECESS>ILY MEAN ?AT ! RI*E/ WILL LOSE MONEY 9 ! PROCESS4 

,GRAEB]3 ,NO ONE IS SAY+ ?AT DEBT ABOLITION IS ! ONLY SOLUTION4 ,9 MY VIEW1 IT IS SIMPLY AN ESS5TIAL COMPON5T 9 A :OLE SET ( SOLUTIONS4 ,I DO NOT BELIEVE ?AT ELIM9AT+ DEBT CAN SOLVE ALL \R PROBLEMS4 ,I AM ?9K+ RA!R 9 T]MS ( A CONCEPTUAL BREAK4 ,TO BE QUITE HONE/1 ,I REALLY ?9K ?AT MASSIVE DEBT ABOLITION IS GO+ TO OCCUR NO MATT] :AT4 ,= ME ! MA9 ISSUE IS JU/ H[ ?IS IS GO+ TO HAPP53 OP5LY1 BY VIRTUE ( A TOP-D[N DECISION DESIGN$ TO PROTECT ! 9T]E/S ( EXI/+ 9/ITUTIONS1 OR UND] PRESSURE FROM SOCIAL MOVEM5TS4 ,MO/ ( ! POLITICAL & ECONOMIC LEAD]S TO :OM ,I HAVE SPOK5 ACKN[L$GE ?AT SOME SORT ( DEBT ABOLITION IS REQUIR$4 

,PIKETTY3 ,?AT IS PRECISELY MY PROBLEM3 ! BANK]S AGREE ) Y\6 

,GRAEB]3 ,ONCE WE GRANT ?AT DEBT CANCELLATION IS GO+ TO TAKE PLACE1 ! QUE/ION BECOMES H[ WE CAN CONTROL ?IS PROCESS & 5SURE ?AT ITS \TCOME IS DESIRABLE4 ,HI/ORY (F]S MANY EXAMPLES ( DEBT ELIM9ATION S]V+ M]ELY TO PRES]VE 9IQUIT\S SOCIAL /RUCTURES4 

,BUT DEBT ABOLITION HAS ALSO AT TIMES PRODUC$ POSITIVE SOCIAL *ANGE4 ,TAKE ! ,A!NIAN & ,ROMAN CON/ITUTIONS4 ,AT ! ORIG9 ( EA* WAS A DEBT CRISIS RESOLV$ 9 SU* A WAY ?AT /RUCTURAL POLITICAL RE=M 5SU$4 ,! ,ROMAN REPUBLIC & ,A!NIAN DEMOCRACY W]E ! (FSPR+ ( DEBT CRISES4 ,9DE$1 !RE IS A S5SE 9 :I* ALL GREAT MOM5TS ( POLITICAL TRANS=MATION HAVE BE5 PRECIPITAT$ BY SU* CRISES4 ,DUR+ ! ,AM]ICAN ,REVOLUTION1 ! ANNULM5T ( DEBT BY ,GREAT ,BRITA9 WAS ONE ( ! REVOLUTION>IES' DEM&S4 ,I FEEL ?AT WE >E N[ CONFRONT$ BY A SIMIL> SITUATION & ?AT IT CALLS = POLITICAL 9V5TIV5ESS4 

,CANCELLATION IS NOT A SOLUTION 9 ITSELF BECAUSE HI/ORY RECORDS SO MANY HOPELESSLY REGRESSIVE CASES ( IT4 ,RESE>*]S AT ! ,BO/ON ,CONSULT+ ,GR\P HAVE WRITT5 A PAP] 5TITL$ 0,BACK TO ,MESOPOTAMIA80 ON ?IS ISSUE4 ,!Y ROLL \T V>I\S MODELS TO SEE :AT MI<T HAPP5 9 ! EV5T ( MASSIVE DEBT CANCELLATION4 ,!IR CONCLUSION IS ?AT GREAT ECONOMIC TURBUL5CE W\LD RESULT1 BUT ?AT FAIL+ TO TAKE SU* A C\RSE ( ACTION W\LD CREATE EV5 MORE SEV]E PROBLEMS4 ,9 O!R WORDS1 ! PROTECTION ( PREVAIL+ ECONOMIC /RUCTURES REQUIRES DEBT CANCELLATION4 ,?IS IS A TYPICAL CASE ( REACTION>Y CALLS = DEBT ANNULM5T4 

,AS = CAPITALISM1 ,I HAVE TR\BLE IMAG9+ ?AT IT CAN LA/ MORE ?AN ANO!R FIFTY YE>S1 ESPECIALLY GIV5 ! ECOLOGICAL ISSUE4 ,:5 ! ,OCCUPY ,WALL ,/REET MOVEM5T WAS REPROA*$ = FAIL+ TO FRAME CONCRETE DEM&S 7EV5 ?\< IT HAD 9 FACT DONE SO71 ,I SUGGE/$--SOME:AT PROVOCATIVELY--?AT DEBTS %\LD BE =GIV5 & ! WORKDAY R$UC$ TO F\R H\RS4 ,?IS W\LD BE B5EFICIAL FROM ! ECOLOGICAL VIEWPO9T & AT ! SAME TIME RESPOND TO \R HYP]TROPHI$ WORK TIME4 7,?IS MEANS ?AT WE WORK A GREAT DEAL AT JOBS :OSE SOLE PURPOSE IS TO KEEP PEOPLE OCCUPI$47 ,! PRES5T MODE ( PRODUCTION IS BAS$ MORE ON MORAL PR9CIPLES ?AN ON ECONOMIC ONES4 ,! EXPANSION ( DEBT1 ( WORK+ H\RS1 & ( WORK DISCIPL9E--ALL ( !M SEEM TO BE ( A PIECE4 ,IF MONEY IS 9DE$ A SOCIAL RELATION%IP1 F\ND$ ON ! ASSUMPTION ?AT EV]YONE WILL ASSIGN ! SAME VALUE TO ! BANKNOTE ?AT !Y HAVE 9 !IR POSSESSION1 %\LDN'T WE ?9K AB\T :AT K9D ( ASSUMPTIONS WE WI% TO EMBRACE REG>D+ FUTURE PRODUCTIVITY & COMMITM5T TO WORK8 

,?AT'S :Y ,I SAY ?AT ! ABOLITION ( DEBT IMPLIES A CONCEPTUAL BREAK4 ,MY APPROA* IS 9T5D$ TO HELP US IMAG9E O!R =MS ( SOCIAL CONTRACT ?AT C\LD BE DEMOCRATICALLY NEGOTIAT$4 

,MOD]ATORS3 ,READ+ Y\R WORK1 ,?OMAS ,PIKETTY1 ONE GETS ! IMPRESSION ?AT = Y\ ! ]ADICATION ( DEBT IS NOT A 0CIVILIZ$0 SOLUTION4 ,:AT DO Y\ MEAN BY ?IS8 

,PIKETTY3 ,! FACT IS1 AS ,I SAY1 ?AT ! LA/ CR$ITORS >E NOT NECESS>ILY ! ONES :O %\LD BE MADE TO PAY4 ,:AT DO Y\ ?9K1 ,DAVID1 ( ! PROPOSAL ?AT A PROGRESSIVE TAX BE IMPOS$ ON WEAL?1 :I* SEEMS TO ME A MORE CIVILIZ$ WAY TO >RIVE AT ! SAME RESULT8 ,I MU/ REPEAT H[ P]PLEX$ ,I AM BY ! FACT ?AT ! MO/ 5?USIA/IC SUPPORT]S ( DEBT ABOLITION1 AP>T FROM Y\1 >E ! P>TISANS ( 0HAIRCUTS10 TO USE AN EXPRESSION FAVOR$ BY ! ,9T]NATIONAL ,MONET>Y ,FUND 7,I,M,F7 & ! ,BUNDESBANK4 ,?AT PROPOSAL COMES D[N TO ! IDEA ?AT ! HOLD]S ( PUBLIC DEBT TOOK RISKS SO N[ !Y MU/ PAY4 ,SO R$UCE ! ,GREEK DEBT BY #e P]C5T OR ! ,CYPRIOT DEBT BY #f P]C5T--H>DLY A PROGRESSIVE MEASURE6 

,=GIVE ME1 BUT ,I AM V]Y SURPRIS$ ?AT Y\ ATTA* SO LITTLE IMPORTANCE TO ! QUE/ION ( :AT TOOLS WE %\LD EMPLOY1 :AT COLLECTIVE 9/ITUTIONS WE %\LD CREATE1 ! BETT] TO T>GET ?OSE :OM WE WI% TO T>GET4 ,P>T ( \R ROLE AS 9TELLECTUALS IS TO SAY :AT COLLECTIVE 9/ITUTIONS WE WANT TO CON/RUCT4 ,TAXATION IS P>T ( ?IS4 

,GRAEB]3 ,PROGRESSIVE TAXATION SEEMS TO ME TO EPITOMIZE ! ,KEYNESIAN ]A & R$I/RIBUTIVE ME*ANISMS BAS$ ON EXPECTATIONS ( GR[? RATES ?AT NO LONG] SEEM VALID4 ,?IS SORT ( R$I/RIBUTIVE ME*ANISM RELIES ON PROJECTIONS ( ! 9CREAS$ PRODUCTIVITY1 L9K$ TO RIS+ WAGES1 :I* HI/ORICALLY ACCOMPANI$ ! APPLICATION ( R$I/RIBUTIVE TAX POLICIES4 ,BUT >E SU* POLICIES WORKABLE 9 ! CONTEXT ( WEAK GR[?8 ,& ) :AT SOCIAL IMPACT8 

,PIKETTY3 ,WELL1 WEAK GR[? ACTUALLY MAKES ?OSE FISCAL TOOLS EV5 MORE DESIRABLE4 ,I AM ?9K+ NOT ONLY ( TRADITIONAL 9COME TAXES1 BUT ALSO ( A PROGRESSIVE TAX ON WEAL? & CAPITAL4 ,PEOPLE POSSESS A C]TA9 QUANTITY ( CAPITAL1 NET ( DEBT4 ,IF Y\ IMPOSE A PROGRESSIVE TAX RATE ON ?IS1 = ?OSE :O POSSESS V]Y LITTLE ?AT RATE MAY BE NEGATIVE1 :I* AM\NTS TO =GIV+ SOME ( !IR DEBTS4 ,SO ?IS IS A F> CRY FROM ,KEYNESIAN 9COME-TAX POLICIES4 

,MOREOV]1 A WEAK GR[? RATE MAKES BO? 9COME TAXES & WEAL? TAXES EV5 MORE DESIRABLE BECAUSE IT WID5S ! GAP BETWE5 ! RATE ( RETURN ON CAPITAL & ! GR[? RATE4 ,= MO/ ( HI/ORY1 ! GR[? RATE WAS ALMO/ Z]O1 :]EAS ! RETURN ON CAPITAL WAS >\ND #e P]C5T4 ,SO :5 ! GR[? RATE IS >\ND #e P]C5T1 AS IT WAS 9 ,EUROPE AFT] ,WORLD ,W> ,I,I1 ! GAP BETWE5 ! TWO RATES IS M9IMAL4 ,BUT :5 ! GR[? RATE IS #a P]C5T1 OR EV5 NEGATIVE1 AS 9 SOME ,EUROPEAN C\NTRIES TODAY1 ?AT GAP IS 5ORM\S4 ,?IS IS NOT A PROBLEM FROM A /RICTLY ECONOMIC PO9T ( VIEW1 BUT IT C]TA9LY IS 9 SOCIAL T]MS1 BECAUSE IT BR+S AB\T GREAT CONC5TRATIONS ( WEAL?4 ,9 RESPONSE TO :I*1 PROGRESSIVE WEAL? & 9H]ITANCE TAXES >E ( GREAT UTILITY4 

,GRAEB]3 ,BUT %\LDN'T SU* A PROGRESSIVE TAX ON CAPITAL BE 9T]NATIONAL 9 SCOPE8 

,PIKETTY3 ,YES1 ( C\RSE4 ,I AM AN 9T]NATIONALI/1 & SO >E Y\1 SO WE HAVE NO DIFF]5CES ON ?AT SCORE4 

,GRAEB]3 ,ALL ! SAME1 IT IS AN 9T]E/+ QUE/ION1 BECAUSE HI/ORICALLY :5EV] AN ]A ( EXP5SIVE CR$IT BEG9S1 SOME K9D ( OV]>*+ MEANS IS G5]ALLY F\ND = PROTECT+ DEBTORS & GIV+ CR$ITORS FREE RE9--EV5 GO+ SO F> ON OCCASION AS TO ACTIVELY FAVOR DEBTORS4 ,SU* ME*ANISMS = CON/RA9+ CR$ITORS' P[] OV] DEBTORS HAVE TAK5 MANY =MS1 9CLUD+ A MON>*Y BAS$ ON DIV9E RI<T 9 ,MESOPOTAMIA1 ! BIBLICAL ,LAW ( ,JUBILEE1 M$IEVAL CANON LAW1 ,BUDDHISM1 ,CONFUCIANISM1 & SO ON4 ,9 %ORT1 SOCIETIES ADOPT+ SU* PR9CIPLES HAD 9/ITUTIONAL OR MORAL /RUCTURES DESIGN$ TO MA9TA9 SOME =M ( CONTROL OV] L5D+ PRACTICES4 

,TODAY WE >E 9 A P]IOD 9 :I* L5D+ IS DECISIVE1 BUT WE DO ?+S ! O!R WAY >\ND4 ,WE ALREADY HAVE ! OV]>*+ 9/ITUTIONS1 :I* >E ALMO/ RELIGI\S 9 *>ACT] 9ASMU* AS NEOLIB]ALISM MAY BE SE5 AS A K9D ( FAI?4 ,BUT 9/EAD ( PROTECT+ DEBTORS FROM CR$ITORS1 !SE 9/ITUTIONS DO JU/ ! OPPOSITE4 

,= ?IRTY YE>S A COMB9ATION ( ! ,I,M,F1 ! ,WORLD ,TRADE ,ORGANIZATION 7,W,T,O71 ! F9ANCIAL 9/ITUTIONS ?AT CAME \T ( ,BRETTON ,WOODS1 ! 9VE/M5T BANKS1 ! MULT9ATIONALS1 & ! 9T]NATIONAL ,N,G,OS HAS CON/ITUT$ AN 9T]NATIONAL BUREAUCRACY ( GLOBAL SCOPE4 ,& UNLIKE ! ,UNIT$ ,NATIONS1 ?IS BUREAUCRACY HAS ! MEANS TO 5=CE ITS DECISIONS4 ,S9CE ?IS :OLE /RUCTURE WAS EXPLICITLY PUT 9 PLACE 9 ORD] TO DEF5D ! 9T]E/S ( F9ANCI]S & CR$ITORS1 H[ MI<T IT BE POLITICALLY POSSIBLE TO TRANS=M IT 9 SU* A WAY AS TO HAVE IT DO ! EXACT OPPOSITE ( :AT IT WAS DESIGN$ TO DO8 

,PIKETTY3 ,ALL ,I CAN SAY IS ?AT A LOT ( PEOPLE W\LD NE$ TO BE CONV9C$6 ,BUT IT IS IMPORTANT TO KN[ EXACTLY :]E WE WANT TO GET TO4 ,:AT BO!RS ME H]E IS ! FACT ?AT = ! L>GE 9/ITUTIONS Y\ >E TALK+ AB\T1 IT IS F> MORE NATURAL ?AN Y\ ?9K TO =GIVE DEBT4 ,:Y DO Y\ ?9K !Y LIKE ! WORD 0HAIRCUT0 SO MU*8 ,Y\R PRESCRIPTION IS TRAPP$ 9 ! MORAL UNIV]SE ( ! M>KET4 ,! CULPRIT IS ! P>TY ?AT [NS ! DEBT4 ,! DANG] ,I SEE IS ?AT ! F9ANCIAL 9/ITUTIONS MOVE 9 EXACTLY ! DIRECTION Y\ DESCRIBE4 

,TYPICALLY 5\<1 9 ! CASE ( ! ,CYPRIOT CRISIS1 AFT] 5T]TA9+ ! IDEA ( A 7SLI<TLY7 PROGRESSIVE TAX ON CAPITAL ASSETS1 ! ,I,M,F & ! ,EUROPEAN ,C5TRAL ,BANK EV5TUALLY OPT$ = 0HAIRCUTS10 ALONG ) A FLAT-LEVEL TAX4 

,9 ! ,FRANCE ( #a#i#d#e-#d#f1 ! PUBLIC DEBT WAS 5ORM\S4 ,TWO MEANS W]E US$ TO DEAL ) ! PROBLEM4 ,! FIR/ WAS HI< 9FLATION1 :I* IS ! MA9 WAY1 HI/ORICALLY1 ( GETT+ RID ( DEBT4 ,BUT ?IS R$UC$ ! WOR? ( ?OSE :O HAD V]Y LITTLE3 POOR OLD PEOPLE1 = EXAMPLE1 :O LO/ EV]Y?+4 ,AS A RESULT1 9 #a#i#e#f1 A NATIONAL CONS5SUS SUPPORT$ ! 9TRODUCTION ( AN OLD-AGE P5SION1 A =M ( GU>ANTE$ M9IMUM 9COME = RETIREES SO AFFECT$4 

,! RI*1 MEAN:ILE1 HAD BE5 UNT\*$ BY ! 9FLATION4 ,9FLATION DID NOT R$UCE !IR WEAL? BECAUSE !IR 9VE/M5TS W]E 9 REAL CAPITAL1 :I* %ELT]$ !M4 ,:AT DID LOSE !M MONEY WAS ! SECOND MEASURE1 ADOPT$ 9 #a#i#d#e--NAMELY1 AN UNCU/OM>Y PROGRESSIVE TAX IMPOS$ ON WEAL? & CAPITAL4 ,TODAY1 SEV5TY YE>S LAT]1 ! ,I,M,F W\LD HAVE US BELIEVE ?AT IT IS TE*NICALLY IMPOSSIBLE TO E/ABLI% A GRADUAT$ TAX ON CAPITAL4 ,I REALLY AM AFRAID ?AT ! 9/ITUTIONS Y\ M5TION HAVE P[]FUL IDEOLOGICAL REASONS = FAVOR+ HAIRCUTS4 

,MOD]ATORS3 ,:AT AB\T ! RISK ( TAX EVASION8 ,ISN'T IT EASI] = ! [N]S ( CAPITAL TO AVOID TAXES ?AN TO AVOID ! IMPACT ( DEBT CANCELLATION8 

,PIKETTY3 ,NO1 IT IS V]Y EASY TO AVOID ! EFFECTS ( DEBT =GIV5ESS1 JU/ AS IT IS EASY TO PROTECT ONESELF AGA9/ 9FLATION4 ,! BIG PORTFOLIOS DO NOT HOLD LETT]S ( CR$IT--!Y >E COMPOS$ ( REAL CAPITAL4 ,IS IT POSSIBLE TO FI<T TAX EVASION8 ,YES1 IF Y\ WANT TO1 Y\ CAN4 ,:5 MOD]N GOV]NM5TS REALLY WANT !IR DECISIONS TO BE RESPECT$1 !Y SUCCE$ 9 GETT+ !M RESPECT$4 

,:5 ,WE/]N GOV]NM5TS WANT TO S5D A MILLION SOLDI]S TO ,KUWAIT TO PREV5T ,KUWAITI OIL FROM BE+ SEIZ$ BY ,IRAQ1 !Y DO IT4 ,LET'S BE S]I\S3 ,IF !Y >E NOT AFRAID ( AN ,IRAQ1 !Y HAVE NO REASON TO FE> ! ,BAHAMAS OR ,NEW ,J]SEY4 ,LEVY+ PROGRESSIVE TAXES ON WEAL? & CAPITAL POSES NO TE*NICAL PROBLEMS4 ,IT IS A MATT] ( POLITICAL WILL4 

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,JANU>Y #d1 #bbb 3 ,SOAK ! ,RI* -- ,UPDAT$4 

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