Piketty and Saez Want to Slash American Living Standards to Enforce Equality

“Economists” Thomas Piketty and Emmanuel Saez are pushing a lunatic plan that would deliberately slash American living standards to try to enforce a counterproductive equality of outcome.

Although they are considered by some to be serious academic economists, everything they write shows a basic lack of understanding of basic economics — plus a habit of misstating their numeric analysis of economic results. For years they have pushed wealth taxes and massive redistribution. Now they have gone further with their Global Justice Report. They want to cap U.S. GDP per capita at about $69,000 — below current levels — while limiting annual growth in rich nations to roughly 0.1 percent. Their scheme includes pushing average working hours down toward 1,000 per year (a three-day work week equivalent), big cuts in construction and manufacturing output, and a new Global Justice Fund run by an international bureaucracy. This fund would spend more than 10 percent of world GDP every year, paid for by global wealth taxes as high as 20 percent on billionaires and top income tax rates up to 90 percent.

It is very clear — and agreed upon by mainstream economists — that economic growth is what pulls people out of poverty. Free markets have done exactly that, lifting billions and driving global between-country inequality to near 150-year lows. Yet Piketty and Saez ignore this reality. They confuse inequality with poverty and prescribe making everyone poorer to close the gap. Their data work routinely looks at gross pre-tax numbers without subtracting taxes the rich actually pay, making it appear that they have more income than they actually have. They also do not include transfer payments to lower income individuals that make them much better off than Piketty and Saez indicate. This approach intentionally distorts economic reality.

It is also clear that inequality is not a bad thing. Consider a simple example: a low income person earning $10,000 a year and one wealthy innovator earning $100,000. If growth and innovation triple everyone’s income, the lower earner now makes $30,000 and the top earner $300,000. Inequality increased, but the poor are far better off. Piketty and Saez’s method would make everyone poorer to reduce the gap — a disastrous trade-off nobody wants. Their punitive global levies would trigger capital flight and destroy the investment that creates real opportunity.

History shows enforced equality always requires coercion on a massive scale. Free people naturally create different outcomes through talent, effort, and risk-taking. Reagan-era tax cuts proved the right approach: lower marginal rates, stronger growth, and rising living standards across income groups. Recent analyses show the U.S. middle class has shrunk largely because many families moved into the upper-middle class thanks to innovation and wealth created at the top.

Piketty and Saez focus on top income shares but refuse to acknowledge how those high earners have driven broad progress. Their ideas treat individual liberty and private property as obstacles instead of the foundations of progress. Economic freedom is a core constitutional protection that should never be sacrificed to socialist fantasies. The Stanford Center on Poverty and Inequality should stop giving these flawed notions any prestige. Platforming such economically unsound work is indefensible.

Policymakers and serious institutions must reject this managed decline. Americans need to demand real growth policies based on free markets, fiscal responsibility, and limited government. Equality of outcome always comes at the deadly cost of freedom. Shared prosperity comes through liberty, not through levelers and their global bureaucracies.