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PIKETTY: Britain's economic policy is a 'complete contradiction'

Apr 7, 2016, 14:19 IST

French economist and academic Thomas Piketty attends a symposium &quotLes Entretiens du Tresor" at the Bercy Finance Ministry in Paris January 23, 2015.REUTERS/Charles Platiau

Economist Thomas Piketty has called the British government's economic policies a "complete contradiction" when it comes to its programme of deficit reduction.

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In an interview with the BBC, Piketty - best known for his book Capital in the 21st Century in 2013 - questioned the attitude of Britain's government to cutting the deficit when it is also giving tax cuts to those with higher incomes.

"What I find particularly incredible in this policy is that, OK, we need to cut the deficit, we don't have money, we need a surplus," he said. "But we have money to cut the tax of the higher income groups, so I think it's a complete contradiction and I think that's very hard to understand for the general public.

Britain's Chancellor George Osborne has embarked on an extensive programme of cuts to lower Britain's fiscal deficit since taking the post in 2010, but has faced criticism, particularly since his last budget in March, for cutting disability benefits, while also giving wealthier individuals tax breaks. That led to the resignation of work and pensions secretary Iain Duncan Smith.

Piketty carried on: "I think you have some people in this country who have benefited from growth much more than others in the past decade and you cannot just give more and more to those who already have more."

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His attacks on deficit reduction programmes wasn't just directed at the UK though, and Piketty effectively argued that public deficit cuts in the eurozone caused the European recession of 2011, 2012, and 2013. Here's what he had to say (emphasis ours):

"I think there has been an attempt, particularly in the eurozone, to reduce the public deficit too fast. When you look at the growth trajectory of Europe as compared to the United States, I think it's very clear that we started a new recession in 2011, 2012, 2013 because we have tried to reduce the public deficit too fast.

"If we had taken our budgetary decision in a eurozone parliament in a democratic manner rather than through these automatic rules about budget deficit we could have avoided excessive austerity and the rise in unemployment and xenophobia right at the time when there was a true need for Europe to be more open with respect to the rest of the world, in particular regarding the refugee crisis."

In his interview with the BBC, Piketty also argued that Europe should allow at least one million immigrants across its borders every year, something he says happened between 2000 and 2010, and worked "in the sense that unemployment was being reduced."

Piketty found global fame in 2013 with his 700-page book Capital in the 21st Century, which hit number one on the New York Times and Amazon bestseller lists.

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In it, he proposed a system of progressive taxes to limit inequality and stop the majority of the world's wealth falling in to the hands of a minority.

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