Thomas Piketty in The Guardian:
How can we interpret the incredible success of the “socialist” candidate Bernie Sanders in the US primaries? The Vermont senator is now ahead of Hillary Clinton among Democratic-leaning voters below the age of 50, and it’s only thanks to the older generation that Clinton has managed to stay ahead in the polls.
Because he is facing the Clinton machine, as well as the conservatism of mainstream media, Sanders might not win the race. But it has now been demonstrated that another Sanders – possibly younger and less white – could one day soon win the US presidential elections and change the face of the country. In many respects, we are witnessing the end of the politico-ideological cycle opened by the victory of Ronald Reagan at the 1980 elections.
Let’s glance back for an instant. From the 1930s until the 1970s, the US were at the forefront of an ambitious set of policies aiming to reduce social inequalities. Partly to avoid any resemblance with Old Europe, seen then as extremely unequal and contrary to the American democratic spirit, in the inter-war years the country invented a highly progressive income and estate tax and set up levels of fiscal progressiveness never used on our side of the Atlantic. From 1930 to 1980 – for half a century – the rate for the highest US income (over $1m per year) was on average 82%, with peaks of 91% from the 1940s to 1960s (from Roosevelt to Kennedy), and still as high as 70% during Reagan’s election in 1980.
This policy in no way affected the strong growth of the post-war American economy, doubtless because there is not much point in paying super-managers $10m when $1m will do.