Latest news with #ThomasPiketty
Mint
3 days ago
- Business
- Mint
Retirement unease: Is it getting better or worse?
In India, employees who are not on government payrolls have long been familiar with retirement unease. Recently, though, a new benchmark popped into view. The Centre's Unified Pension Scheme (UPS) option, which was thrown open to central workers on 1 April, offers half of one's average basic salary drawn in the last year of work as pension (if one puts in 25 years of service). The very mention of half one's last pay prompts a basic question: Are those with no UPS access putting enough away for their silver years? Maybe not. A survey of pension planning by Grant Thornton Bharat (GTB), a professional services firm, has flagged a big gap between the money people expect they'll have to live on as they age and the reality of their financial situation. Also Read: Pension alert: Even the unified scheme could acquire a sell-by date over time This is among a significant slice of our workforce. Folks employed by the private sector made up nearly nine-tenths of the survey's sample, with 30% earning above ₹40 lakh annually and the vast bulk taking home more than twice of India's GDP per head. As the GTB study puts it, over 55% of respondents expect monthly pensions exceeding ₹1 lakh, 'but only 11% are confident in their current savings." The survey was done over August and September 2024. The UPS, which was approved by New Delhi in the midst of that span, may or may not have inflected responses. But the survey also points to low satisfaction with the National Pension System (NPS) that's open to all Indian 18-70-year-olds. Have retiral back-ups like NPS begun to look pale in contrast with the UPS deal? Plausibly. If this isn't a source of unease, it should be—since so many of us seem to be falling short on stuffing our nest eggs. Either way, the point is not to interpret the worldly context of a survey finding, but to explore viable avenues of relief. According to the GTB report, future needs and means being out of whack 'signals a pressing need for realistic retirement planning and financial education." Also Read: Unified Pension Scheme: Is good psychology also sound economics? Indeed. Even in this age of agentic AI bots headed our way to help out, with 'Fire' calculators at the disposal of youth in pursuit of 'financial independence' to 'retire early,' lifelong plans remain sketchy. Clearly, many of us need to get our act together. This is also the market pitch made by various investment vehicles. The 'Mutual fund sahi hai' (it's right) campaign, for example, has played an undeniable role in drawing money into long-held mutual funds. That equity has been a big draw is no surprise, given the appeal of its returns. Some of our retail rush for shares could be explained by how capitalism has caught on. As Thomas Piketty said, if the rate of return on capital exceeds the rate of economic growth, wealth will enlarge faster than income. To amass the money needed for a cushy life, every salaried person has the risky but rewarding option of buying into the country's capital pie. Also Read: EPFO reforms: Getting PF dues shouldn't require special services Of course, advice to invest wisely usually assumes that if one needs a helping hand with old-age security, it's best to look for one at the end of one's arm. In a market economy with a weak welfare net for all but the poor, the onus is on us to take charge of our financial lives. However, there is a favour that the Reserve Bank of India (RBI) can do us that must not escape notice. No multi-decade plan can be firmed up without clarity on the rupee's path of purchasing power into one's old age. But if RBI shows both the will and ability to keep inflation capped at 4% over the long haul, it'll enable truly realistic plans. In assuring us retirement relief, RBI has a major role to play.
The Guardian
15-05-2025
- Business
- The Guardian
The Guardian view on Europe's growing wealth divide: back to the world of Balzac
In a recent study picked up in the French press, the academic Mélanie Plouviez cites one of her country's best-loved novelists to make a damning point. The power of inherited and unearned wealth in the France of 2025, she argues, replicates the social injustices found in Honoré de Balzac's 19th-century chronicles of ambition and despair. As in the 1820s, she writes, 'Who now could buy a place in Paris relying only on their wage and without family help? With the resurgence of inherited wealth, a gulf between what work allows and inheritance allows has also returned.' The problem is a sadly familiar one across Europe, and the same observation could be made of Britain, Germany or Italy. The economist Thomas Piketty has laid bare the extent to which booming stock markets and property prices have turbocharged asset wealth in western liberal democracies, at the expense of those reliant solely on a wage. Since the 1980s, regressive tax changes have empowered the wealthy to keep more of their money and pass more of it on to their sons and daughters. In advanced economies, the amount of inherited wealth has more or less doubled as a proportion of GDP, compared with the middle of the last century. The collapse of trust in politics can, in part, be attributed to this emergence of a two-tier society that offers only limited opportunities to the assetless young and undermines the basis of the social contract. France is at the sharp end of this loss of faith. On Wednesday evening, during a marathon primetime television interrogation, Emmanuel Macron was accused of having become a 'president for the rentier class'. Mr Macron, who made the reduction of taxes on wealth a priority of his first term, batted away the question with airy talk of promoting equal opportunities. Yet as the French president refuses to contemplate a more redistributive approach, his unpopular prime minister, François Bayrou, is seeking backing for an austerity budget that would impose €40bn in spending cuts. This, Mr Bayrou has blithely stated, 'will demand efforts from everybody, and given its scale, it cannot succeed unless the French people support it'. Across the Rhine in Germany, the new chancellor, Friedrich Merz, is pushing a similar message of collective sacrifice. Germans, Mr Merz said this week, must 'work more, and above all more efficiently' to get a stagnating economy back on track. Prof Plouviez's work is the latest to highlight why such exhortations to solidarity and hard work ring so hollow for so many. As populist parties surf on social discontent, governments are shamelessly echoing their rhetoric and approach towards immigration. But confronting the manner in which a self-reproducing wealth divide is corroding social bonds and undermining a politics of the common good remains taboo. Presidential elections in Romania and Poland this weekend are likely to showcase voters' deepening disillusionment with the political mainstream, and the continuing rise of the far right. As Balzac was writing the final volumes of his La Comédie Humaine in the 1840s, the future British prime minister Benjamin Disraeli published Sybil, his fictional indictment of the great wealth divide in Victorian England. Two centuries on, facing a darkening political horizon, Europe's current crop of leaders could usefully dust down a copy and learn from its insights before it is too late.
South China Morning Post
08-04-2025
- Business
- South China Morning Post
‘Trump burned it all down': economists rip into US tariffs, warn of more inflation
A wide range of economists are voicing alarm over President Donald Trump's steep tariffs on imports into the United States, sparking a trade war that experts say could tip many countries into recession. Here are comments by some leading economists: Advertisement For Thomas Piketty, French author of the bestselling Capital in the Twenty-First Century, 'Trumpism is first of all a reaction to the failure of Reaganism' – the liberalisation of president Ronald Reagan in the 1980s. 'Republicans realise that economic liberalism and globalisation have not benefited the middle class as they said they would,' the left-leaning economist said. 'So now they're using the rest of the world as a scapegoat,' he said. 'But it's not going to work: the Trump cocktail is simply going to generate more inflation and more inequalities.' In response, 'Europe needs to define its own priorities and prepare for the global recession that's coming' with a massive investment plan in 'energy and transport infrastructure, education, research and health'. Advertisement Paul Krugman, the Nobel economics prize laureate, said the US was essentially the founder of the modern trade system that had led to lower tariffs over the past decades.
The Guardian
17-03-2025
- Business
- The Guardian
The Guardian view on Labour's semantic shift: it's the party of work, not workers
It is a principle long observed in British politics that the Labour party, when uncertain of its convictions and in search of a popular identity, will reassure itself that the answer lies in a new slogan. That it has chosen to declare itself the 'party of work' rather than the 'party of workers' is not, on the face of it, a significant semantic shift. But in politics, words matter. And this subtle rebranding effort says a lot – perhaps more than Labour intended – about where the party now stands in relation to class, social justice and its historical roots. Labour was never merely a party that supported people in work. It was a party of workers – an important distinction. It was not just about wage labour as an abstract good but about those who perform it, their dignity, security and place in society. To be a party of workers was to recognise the structures that exploit them and seek redress. It is a position tied to broader ideals of equality, family life and community identity. To be the party of work, on the other hand, is to endorse a different worldview: one where economic productivity is an end in itself, where a person's worth is measured by their output, where those who cannot work – through disability, ill health or old age – are considered burdens rather than individuals with rights. This is the logic in which Labour now finds itself entangled, justifying benefit cuts as fiscal discipline and balancing the books on the backs of sick and disabled people. This shift signals economic responsibility to business elites, justifies spending cuts as moral imperatives and reassures traditional supporters that the party still values 'hard work' – but in a way that rewards business more than workers. It is a rebrand that offers a palatable message to those who own the means of production rather than those who work under them. This new self-definition conveniently excludes many who once relied on Labour. The party leadership argues that it is reforming the state to broaden its appeal. If this alienates the base, it may backfire – Labour won more than six in seven constituencies in Britain's poorest half. The Tories, meanwhile, have lost ground in more middle‑class areas, especially after Brexit, but that shift hasn't been fully captured by either Labour or the Liberal Democrats. Labour's transformation can be seen as a quiet coup by the professional-managerial class who prize economic orthodoxy over radical redistribution. After all, they too are 'working people' – albeit in the sense that corporate lawyers, tax auditors and City analysts are also workers. Rebadging itself as for 'working people' allows Labour to prioritise a managerial elite while purporting to maintain class solidarity. This shift echoes Thomas Piketty's analysis of western democracy coalescing around a 'brahmin left' and a 'merchant right', where both factions compete for the votes of a modern working class – restaurant staff, drivers and cleaners – whom they neither represent nor truly serve. Labour's embrace of 'work' rather than 'workers' is a tacit admission of this: it has become a party that chases middle-class respectability while assuming that working-class voters will fall in line. The irony is that, in making this pivot, Labour risks alienating the people who once formed its bedrock. For all its efforts to appear fiscally responsible and electable, it may find that a party of work, rather than workers, is one that inspires very little passion at all.
The Guardian
05-02-2025
- Business
- The Guardian
The Guardian view on class politics: it has faded as culture wars have risen
Early in the 2010s, class politics was everywhere. Bankers were bailed out, and the price Europeans apparently had to pay was austerity. Protests erupted from Greece to Wall Street. Thomas Piketty's book on inequality, Capital in the Twenty-First Century, took the world by storm, and Britain seemed poised for a shift – first with Ed Miliband's critique of 'predatory capital', then when Labour members chose to back Jeremy Corbyn's attack on a rigged economy. A decade later, it might seem that time's arrow has finally hit its mark. Britain has a Labour government with a whopping majority and, after years in which British prime ministers hopped off the conveyor belt from Eton or Winchester, the country is now led by the son of a toolmaker. Even the leader of the Tories, Kemi Badenoch, claims she 'became working class' as a teen, while doing a few shifts at McDonald's. A working-class background has become the badge politicians try to flaunt. But what about the politics of class? Well, that's a different matter. The manifesto that propelled Sir Keir Starmer to power last summer mentions 'working people' 21 times, but 'inequality' just once. What does the prime minister mean by 'working people'? It was a question that he struggled to answer ahead of last October's budget, eventually suggesting the term denoted those 'who do not always have the means to write a cheque'. The average adult wrote just two cheques all of last year. Today's political leaders treat class as a matter of culture rather than economics, about tastes and traditions rather than where you sit in relation to power. With a piquant irony, class war has got bundled up into a culture war. The Labour government hopes to make employment law a little more progressive, but to lift up working-class kids it proposes lessons in oracy, or speaking skills. As an up-and-coming MP, Rachel Reeves would attack David Cameron for making tax cuts for the wealthy; now she is chancellor, she listens hard to what she calls the 'non-dom community'. But she was right first time: Britain stands out for how much wealth goes to those who are already wealthy, while the rest of the country has got by on stagnant real wages. Placating the Davos crowd may make good headlines, but it does nothing for the public finances, let alone your voters. There is a danger to stripping class of its associations with inequality, and its name is Nigel Farage. It is the radical right who pose with increasing confidence as the defenders of the working class. No matter how regressive the actual policies of Reform, on the economics that hits the headlines – Thames Water or Port Talbot – Mr Farage and Richard Tice will take up positions now discarded by the centre left. It is the same formula that got Donald Trump into power. The richest man ever to be president of the US touts himself at elections as the champion of blue-collar workers; once in power he surrounds himself with tech billionaires. Across Europe, the radical right have studied his example. The centre-left have been somewhat slower on the uptake, but they must urgently learn the lesson that politics abhors a vacuum and that class politics can be taken up by reactionaries as well as progressives. The results of that switch may prove disastrous. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
