Monday, October 12, 2015

Deaton, Zucman, and what can you do

The award of the Nobel Prize in Economics to Angus Deaton is a big endorsement to research on inequality, not only by him, but by many others such as Piketty, Atkinson, Bowles and Milanovic. All these great economists have argued that inequality is important in addition to a concern about poverty, mainly because of the political consequences of inequality and the dangers it poses to democracy. An example of this is in the difficulties of fighting against fiscal havens, as explained by Gabriel Zucman in a recent article and book. In the article in The Guardian, this economist gives a good reason to give a conditional yes to free trade agreements. These agreements should be endorsed as long as they are accompanied by mechanisms to fight fiscal fraud at the international level. There was a time where talking about inequality was not polite, but now thanks to all these scholars and to the Nobel Prize, what is not polite is not to talk about inequality. It would be a shame if the example of these economists was not followed by the voters in democracies. Voters should listen to these voices and be able to understand, through the fog of nationalism and populism, that powerful people do not want them to listen. It is just embarrassing that in countries where inequalitites have increased during the last crisis, like Spain, some popular media still sees a witch hunt when famous footballers (or their agents or their clubs) are investigated by the fiscal authorities, guess why. Because they have allegedly tried to avoid paying millions of euros in taxes using fiscal havens. What can you do? To start with, vote for reasonable left wing parties, and denounce the hypocritical behaviour of our sports stars.

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