The scariest line in Piketty

To sum up, petroleum rents might well enable the oil states to buy the rest of the planet (or much of it) and to live on the rents of their accumulated capital.

Piketty, Thomas. Capital in the Twenty-First Century. (Translated by Arthur Goldhammer) 2014. p. 462 (hardcover)

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

3 thoughts on “The scariest line in Piketty”

  1. Piketty: We may have a common currency for 19 countries, but each of these countries has a different tax system, and fiscal policy was never harmonized in Europe. It can’t work. In creating the euro zone, we have created a monster. Before there was a common currency, the countries could simply devalue their currencies to become more competitive. As a member of the euro zone, Greece was barred from using this established and effective concept.

    SPIEGEL: You’re sounding a little like Alexis Tsipras, who argues that because others are at fault, Greece doesn’t have to pay back its own debts.

    Piketty: I am neither a member of Syriza nor do I support the party. I am merely trying to analyze the situation in which we find ourselves. And it has become clear that countries cannot reduce their deficits unless the economy grows. It simply doesn’t work. We mustn’t forget that neither Germany nor France, which were both deeply in debt in 1945, ever fully repaid those debts. Yet precisely these two countries are now telling the Southern Europeans that they have to repay their debts down to the euro. It’s historic amnesia! But with dire consequences.

    SPIEGEL: So others should now pay for the decades of mismanagement by governments in Athens?

    Piketty: It’s time for us to think about the young generation of Europeans. For many of them, it is extremely difficult to find work at all. Should we tell them: “Sorry, but your parents and grandparents are the reason you can’t find a job?” Do we really want a European model of cross-generational collective punishment? It is this egotism motivated by nationalism that disconcerts me more than anything else today.

  2. In the headquarters of the world’s most profitable company, past its heavily guarded perimeter, down a road, through another security gate, out of the blazing sun and into a cool office building sit box after box of rocks. They are samples of anhydrite, shale, dolomite and grainstone, retrieved from kilometres below ground. A block of grainstone looks perfectly ordinary, its dark surface dotted with pores. But nestled in this rock were the remains of the tiny marine animals and plants which blanketed the Arabian peninsula before there was such a thing, over 100m years ago, and which still give the rock a faint, familiar scent: oil. “Smells like money,” says one executive—$111bn, to be precise.

    That was the net income earned last year by Saudi Aramco, the kingdom’s state-owned oil company. It is nearly twice that of Apple, the world’s most profitable listed firm, and more than the combined earnings of the five biggest international oil companies—ExxonMobil, Royal Dutch Shell, bp, Chevron and Total. For decades, the riches from Saudi Arabia’s vast reserves have been the exclusive property of Saudi Arabia. Muhammad bin Salman, the kingdom’s crown prince, wants that to change.

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