Paul Mason — Thomas Piketty's real challenge was to the FT's Rolex types

In the end, Picketty did not claim there had been a vast increase in wealth disparities since the 1970s. Picketty's prediction is that the moderate rise in inequality under neoliberalism is set to gather pace in the 21st century, taking us back to Victorian levels by 2050. His prediction is based on simple maths: if growth is low, and the bargaining power of labour low, and the returns on capital high, then it is more logical to sit on assets and speculate rather than accumulate wealth by work, invention or entrepreneurial risk.

Piketty asks the question that mainstream economics doesn't want to answer: do we want a society based on work and ingenuity or on rent?

It's not an academic question. Figures from Lloyds Private Bank show UK asset wealth grew from £4.7tn to £7.8tn in the decade to 2013, with most of that generated by the rising value of financial portfolios, and all wealth growing faster than incomes and inflation. If Piketty's figures are wrong, the probable cause – beyond the odd transcription error – is a mild overestimation of a clear trend, generated in an attempt to uncover modern capitalism's guilty secret. If the FT's figures are wrong, it is because they rely on those of governments that have become – as Peter Mandelson once put it – "intensely relaxed about people becoming filthy rich".

But the most important question is the future: if Piketty is right then we have to "euthanase" the rentier class all over again. Only taxes on current wealth – and an end to opaque "wealth management" trails that end up in Switzerland or Cyprus – will prevent capitalism generating levels of social inequality that destroy it.

The Guardian (UK)
Thomas Piketty's real challenge was to the FT's Rolex types
Paul Mason | economics editor at Channel 4 News
(h/t Brad DeLong)