Thomas Piketty, whose treatise on economic equality has taken the international economic community by storm, raised the need for property renewal in South Korea where massive wealth is often inherited among a few, select conglomerate clans.
"You cannot have the same families forever. There is a serious issue of how you renew the property structure," the French economist said in an interview Friday with Yonhap News Agency in Seoul. "It's important to avoid extreme reproduction of inequality in the same family," he said.
"As Warren Buffett once said, you don't want to have your Olympics team of 2013 with the children of team of 2000. You need some renewal in the team of Korea like in every country," said the best-selling author of "Capital in the Twenty-First Century."
The book, based on the theory that capital growth outpaces economic growth, has nurtured fans searching for clear-cut explanations to rising economic inequality as well as outright critics from the corporate world.
In a recent seminar hosted by a right-wing think tank in Seoul, conservative economists denigrated Piketty's work as "an assertion that triggers the popular 1:99 sentiment" and "a theory by a son-like academic born in 1971."
Piketty's remarks come as chaebols, family-run business conglomerates with closely-knit webs of affiliates, for years have built up wealth while skirting inheritance tax and laws to cut costs.
Having such conglomerates that are doing well in global markets is an "asset" for the country, Piketty said, but he emphasized the need to support property mobility by boosting transparency, especially as distribution will become more important with slowing economic growth.
"Sometimes conservatives just refuse transparency; this is bad. If you refuse transparency, what do you do with income inequality and distribution? Denial is not really the right strategy," he said, suggesting that governments adopt progressive taxation, which can be later used to track down information of wealth when data builds up.
The economist, whose experience as a teenager during the fall of the Berlin Wall triggered his interest in capitalism and communism, said the development in technology may become an important facet of economic history.
"There are forces that go in the direction of reducing income inequality if more have access to knowledge and information. This can spread the diffusion of knowledge, skill and information," she said.
"At the same time, this can create extreme inequality. One of the big issues is we can have more and more machines and robots replacing human labor... In the long run, it is possible that we may have more and more capital-intensive technology," he said, noting how global retail giant Amazon is testing drone delivery service.
Piketty said that while such technological developments is "a huge opportunity" to replace routine jobs with more creative jobs, it raises the challenge in terms of access to skills and
distribution of property unless an education system is available for people to hunt new jobs.
Piketty, who himself teaches as an economics professor at the Paris School of Economics, emphasized the importance of education throughout the interview as a means to ease income disparity and foster opportunities.
"The diffusion of skills and education is the most powerful means to reduce income inequality. It's important to invest not only in education of a small number of elites but broad segments of the population," he said.
"It seems to me that within the OECD, households in Korea are paying the most for education. It's a big source of spending for households. Probably there could be more investments in public education," he added.
The French professor, who has now earned the nickname "rock-star economist," meanwhile shrugged off lamentations of his right-wing critics.
"I think people should be afraid of inequality, not afraid of my book. I'm not creating inequality; I'm just trying to analyze it." (Yonhap)
