TL;DR
The advice to tax the rich to boost growth and reduce inequality dates back to the 18th century, but it may be a one-size-fits-all cure for every economic ailment.
Ten years ago, economists Lawrence Summers and Thomas Piketty each floated a big idea: 'secular stagnation' and 'rising inequality'. Put together, they forecast a future of slow growth and widening gaps. A recent journal issue looks back at this decade and finds the argument is actually very old.
Someone proposed it two centuries ago
In the 18th century, French economist François Quesnay said it: the rich save too much and don't spend, so the economy crawls. The fix? Tax the rich, then spend the money — that both narrows inequality and juiced demand.
Keynes and Hansen echoed this later. Even Paul Samuelson calculated that taxing heavy savers and transferring to heavy spenders speeds up growth without adding to deficits.
A cure too universal to be credible
China has had high savings and rising inequality for half a century — and rapid growth all along. High savings don't necessarily drag an economy down.
Modern growth slowdowns have many causes: aging populations, weak investment, a sense that the best ideas are taken, high government debt. Would taxing the rich fix any of these directly? Clearly not.
And what if AI suddenly speeds the economy up? Redistribution would still be the answer? Prescribing the same medicine for slow growth and fast growth is suspicious. Maybe some redistribution is simply good in itself, without needing an economic excuse.
Curated from high-quality sources, with concise summaries and key takeaways.
