Piketty’s Progress

A review of A Brief History of Equality by Thomas Piketty, Belknap Press, 288 pages (April 2022)

As I write this, the city of Rotterdam is considering a request to dismantle one of its historic bridges to grant Jeff Bezos’s super-yacht (too monstrous for normal ports) safe passage to the Atlantic. At the same time, Amazon workers around the world continue to fight to secure the living wages and safe working conditions they are currently denied. Such juxtapositions are fraught with appalling symbolism—the vulgar display of wealth, the mutilation of national monuments, the outsized influence the rich have over public policy, the gulf that exists between CEOs and their employees. Moreover, Bezos’s wealth doubled to $170,000 billion during the pandemic, when over 160 million people worldwide were threatened with poverty (meaning that he could have effectively given every person a $50,000 bonus and still have retained his previous earnings). This merely reaffirms what we already know: staggering inequality continues to thrive in advanced capitalist societies.

This kind of inequality is not news, of course, but we need to be regularly reminded of it. The great chronicler of inequality in our time is the French economist, Thomas Piketty. The author of several tomes, Piketty’s works are not for the weak of wrist: Capital in the Twenty-First Century (2013) clocks in at 816 pages, while its follow up, Capital & Ideology (2020), breaches 1,000. Heavily graphed and annotated, reading them from front to back is a labor in itself. Volume aside, Piketty’s books are massively popular and widely praised, though one suspects, as with all big and difficult books, that most people have not read them in full, and much of their praise comes in under the pressure of consensus. Fortunately, Piketty’s new book is mercifully brief. Indeed, A Brief History of Equality (at less than 300 pages) is a nice distillation of the “rockstar” economist’s ideas and a good entry point for the uninitiated.

Piketty’s research sits at the intersection of history and social science, and his great contribution has been to show that tax records are as important to understanding and learning from history as anything else. In tracking the distribution of wealth since the beginning of the modern era, Piketty’s thesis is elegantly intelligible and empirically obvious: if return on capital consistently outpaces growth, it will invariably lead to a concentration of wealth, thereby producing inequality. The stress here is on inequality of opportunity, as Piketty’s argument for a more robust welfare state is more a matter of degree. He is careful to remind us that a measure of inequality between social groups can be productive, and that there is no universal formula for eliminating it. But he also points out that an unequal concentration of wealth is bad for growth and corrosive to democracy, precisely because it limits social mobility and prevents people from accessing key institutions.

This argument is not new. Aristotle made the same case in his Politics, positing that since all systems bend towards the concentration of power, and power tends to concentrate in the hands of those that have wealth, the interests of the governing will naturally diverge from those of the governed unless some correction takes place. The point at which this divergence becomes unmanageable, a decision has to be made—either reduce democracy, or increase people’s access to institutions. In defense of the latter, Aristotle proposed that property be distributed more widely among the middle class, allowing it to participate more fully in the democratic process and aligning its interests with that of the ruling class. Thus we see, in fourth century Athens, the conception of the first welfare state, and the reasoning behind it remains at the heart of progressivist politics to this day: a large and prosperous middle class encourages mobility, strengthens democracy, restrains oligarchy, and stabilizes society.

Piketty points out that “Property is a historically situated notion,” largely dependent on “the way each society defines legitimate forms of ownership,” which has shifted over time. Rousseau, who argued that people are truly equal only in the state of nature, identified the hoarding of property as one of the origins of inequality: “The first man who, having enclosed a piece of land, thought of saying ‘This is mine’ and found people simple enough to believe him, was the true founder of civil society.” Marx could only imagine the abolition of property as the way to social equality, but Piketty falls within the tradition of Thomas Paine and Henry George who called for the taxation of property as a means of redistributing wealth.

Piketty echoes Paine specifically in the concept of “inheritance for all,” an idea that Paine advanced during the French Revolution in the form of a land tax. This could be used to finance social security not just for those at the end of their life, but for those at the beginning as well. This universal inheritance, which Piketty argues could be financed by a global wealth tax, would be accessible to everyone upon reaching the age of maturity. The goal is not simply to punish the rich for the comfort of the poor (a common mischaracterization of Piketty’s ideas), but to enhance the social mobility of young people by increasing their buying and bargaining power (impossible in a condition of insecurity), instead of saddling them with student debt equivalent to a mortgage before they reach the age of 25.

The tradition into which Piketty-economics fits goes by various names, but Piketty calls it “Participatory Socialism”—participatory precisely because it eschews the movement towards the bureaucracy and centralization that characterized Soviet-style socialism. It focuses on giving people greater access to institutions, with the goal of “allow[ing] all citizens to participate more fully in social and economic life.”

One participatory reform would be adopting a co-determinate structure for businesses, like the so-called Mitbestimmung model in Germany, where as many as one-third to half of the seats on boards of directors are given to worker representatives. This approach, Piketty reminds us, has certainly not weakened the productivity of the German economy since it was introduced nearly a century ago. In addition to being a more democratic compromise between management and workers, it would constitute a legitimate investment in the company by employees (who are already investors by virtue of their employment), and would give them a greater stake in its prosperity, while also increasing the transparency of bookkeeping.

The central pillar of the Piketty model is a global system of progressive taxation, with high corporate and income tax rates aimed at the wealthiest one percent. Exactly how high these rates should be, Piketty (a mild prescriptivist) leaves open, though he makes it clear that it should be much higher than it is now in most countries. In the United States, one might propose a top marginal tax rate of 81 percent. If that sounds like communism, it is worth remembering that this was in fact the American tax code between 1932 and 1980. So, the popular objection that progressive taxation of this kind might work in Europe, but that it would never be acceptable in the United States (because it would be “un-American”) is simply ahistorical.

A good deal of A Brief History of Equality consists of reminding readers that these policies, far from being unrealistic or utopian, either exist currently or have existed at some point in the past. In many ways, Piketty is asking us to return to the economic models that were put in place in Europe and North America between 1914–1980. Piketty calls this era “The Great Redistribution,” when income inequality decreased dramatically. To be sure, this redistribution would not have been possible without a series of catastrophes—disaster being the great leveler. Within the space of four decades, revolutions, two world wars, and an economic depression destroyed much of the inherited wealth of the European aristocracy (the gap was closed as much by the self-immolation of the rich as it was by raising up the poor).

The Great Redistribution, however, was also (and in large part) due to the rise of the welfare state, which could not have happened without changing people’s view of the role that governments play in markets. And here it is important to recognize that many of these initiatives, like the New Deal, were not merely acts of noblesse oblige, but compromises aimed at alleviating pressure from socialist and labor movements, and implemented partly to quell radicalism and avert the threat of revolution.

The movement towards greater equality among the classes accelerated tremendously during this period, and it is along this line that Piketty recommends we continue. He shows—with data readily accessible to all—that developing more progressive taxation and furthering the potential of the welfare state does not come at the expense of productive efficiency and growth. The US economy, which is perhaps the best example of this, grew at an unprecedented rate between 1945–1980, a time of high tax rates and generous social spending. This legacy, however, has largely been gutted in the last 40 years, with the rise of neoliberalism (inaugurated by the Powell Memo), the wave of conservatism that overtook the West in the 1980s, and the abandonment of class politics by labor and social-democratic parties after the end of the Cold War. Since then, we have seen growth rates slow, contrary to the predictions of Reaganites and Thatcherites who insisted that deregulation and low corporate tax would spur innovation, create jobs, and “trickle down” more wealth to the rest of society.

The march toward equality, like the rest of history, is fraught with ironies. It is also not fixed and safe from reversal. The United States, for example, had a far more even distribution of wealth than most European societies in the 19th century. Today it has flipped. The French Revolution succeeded in establishing the principle of égalité, but failed to alter the distribution of wealth in France (Piketty shows that, in 1900, the wealthiest controlled roughly the same amount of property as they had a century before). These are good reasons not to be whiggish. There is a temptation to imagine our progress towards equality as a straight line, along which we will continue to travel, as the high tide of capital markets raises all boats. But there is no reason for us to believe that this will continue. The 21st century may well be one in which a surfeit of techno-billionaires reach new heights of obscene wealth, while a third of the population in post-industrial societies fall into poverty as their jobs are automated out of existence. That is, unless corrections are made.

The cause of creating a more equal society depends heavily on the strength of its social democracy and its willingness to renew the question of inequality. It was largely due to the efforts of social movements that we have things like free public education, universal health care, maternity leave, social security, unemployment insurance, worker’s rights, fixed salaries, the eight-hour work day, etc. We have no right to take these things for granted, as many of them were fiercely opposed at the time they were advocated, and had to be fought for, sometimes violently.

It is also important to remember that our sensibilities—and the institutions on which they are based—are not hardcoded. Regimes change, as does the prevailing sense of what is just and fair. The acceptability of these regimes largely depends on the ideas that hold them in place, and to that extent all economic policies are matters of “Ideology”—a word that Piketty doesn’t use as a pejorative. Indeed, there is little historical evidence to support the notion that a particular set of policies cannot be adopted on the basis that they are incompatible with some vague sense of “national character.” The French Revolution showed, albeit with much blood, that a country’s political organization and attitudes regarding equality can change radically in a very short time.

Sweden, which is often held up in the West as a model of democratic socialism, did not begin moving towards egalitarian policies until socialist parties took power after WWI. Until 1911, Sweden had censitary suffrage, according to which only the richest 20 percent could vote in elections, and the number of votes given to each citizen was proportionate to their wealth (we can see echoes of this today in campaign finance laws and rulings like Citizens United in the United States). We’ve also seen astonishing transformations in countries like Japan and Germany between 1910–1960, which transitioned from military aristocracies to fascist dictatorships to democratized welfare states in just a few decades.

The rapidity of these changes was sometimes a response to catastrophic events that demanded a radical restructuring of intuitions. But therein lies the lesson: societies that ignore inequality do so at their peril. Indeed, it was the abandonment of social democracy in Germany in the 1920s that weakened European socialism and created the vacuum that allowed parties like the Nazis to rise to power (a development predicted by Trotsky and confirmed by Hannah Arendt in The Origins of Totalitarianism). More still, it was the abandonment of a truly internationalist movement that made people susceptible to nationalist and statist politics that more readily adapted themselves to the demands of the interwar years.

If the politics of Europe and America during the last decade have taught us anything, it is that the failure to address inequality is highly corrosive to the social contract. It fosters distrust and resentment, and makes people vulnerable to demagogy, populism, xenophobia, and reactionary politics of all kinds. Politicians who refuse to address the real source of inequality naturally have to search for other reasons to explain it, which usually involves finding scapegoats for people’s grievances—immigrants, foreign labor, foreign countries, etc. And if the problem of inequality is not addressed, the only way for the ruling class to protect its interests is to gradually erode democratic institutions.

This last point should be brought into sharper focus. Near the close of his argument, Piketty writes:

...if no democratic post-national project is formulated, then authoritarian constructions will take its place in order to propose more or less convincing solutions to the feelings of injustice engendered by the unrestrained economic and state forces operating on a world-wide scale.

One of the more honorable legacies of socialist movements in the 20th century was the recognition that the struggle for equality transcended all other identities (national, ethnic, religious) and that the project to improve the conditions of working people was essentially an international one. This, among other things, demanded an expansion of human solidarity. Sadly, we fail to see this same internationalism today, as societies across the West founder in nativist discourse, and tribalist thinking on the Left has displaced a debate once centered on a global critique of capital.

Perhaps rekindling a bit of this old internationalism is in order if we wish to crawl out of this rather ugly phase in our politics, and avoid the irony and humiliation of an authoritarian populism spearheaded by elites posing as saviors of “the forgotten.” This will require a return to certain principles, and a hardier debate within the Left. To that end, the march towards greater equality in the coming century may result from a debate between competing visions of socialism rather than a war between socialism and capitalism.

This is a companion discussion topic for the original entry at https://quillette.com/2022/04/28/pikettys-progress/

This is a weighty article. The substance of the socialist critique of society is too often unanswered by conservatives and the “right.” To the extent that author ends on a challenge to the “left” to reconsider its frame of reference, the same ought to be argued for the “right.” Conservatism will not survive if it is merely a series of hysterical reactions to whatever is the latest craze coming from the fringes of the left. Ideologies that offer nothing to satisfy the common needs of all mankind are doomed; as they ought to be.


That’s amazing. Bezo’s wealth is greater than the GDP of the world (by far). Global GDP is ‘only’ $85 trillion and Bezos has way more money than that.

If Bezos gave all 160 million people, $50,000 each that would ‘only’ cost $8 trillion. That’s a tiny fraction of the money he has.

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For most (almost all) of human history the returns on capital (historically quite high) has exceeded growth (historically near zero). However, wealth inequality has not consistently grown as a consequence. Why? Because the owners of capital tend to spend their money, not accumulate more.

See “A Farewell to Alms: A Brief Economic History of the World
](Amazon.com)” by Gregory Clark for some actual historical economic data.

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The US economy…grew at an unprecedented rate between 1945–1980, a time of high tax rates and generous social spending.

Have you ever seen Forrest Gump? Remember when Forrest and Lt. Dan were struggling to get a decent haul of shrimp while all the other shrimp boats were bringing in plenty? Then a hurricane destroyed all the competing shrimp boats leaving Bubba Gump Shrimp Company the only game in town? “After that, shrimping was easy.” We flourished after WWII because even productivity stifling punitive tax rates couldn’t stop a growth juggernaut like the US economy which had built immense industrial infrastructure during the war. As Europe was being laid to waste the continental US was being transformed into a colossus of industrial productivity. If you open a history book in a thousand years, you’ll see but one instance of those conditions coming together.


"if we wish to crawl out of this rather ugly phase in our politics, and avoid the irony and humiliation of an authoritarian populism spearheaded by elites posing as saviors of “the forgotten.”

The populists being elected by “the forgotten” (Trump, …) are not authoritarian (they give up office at the end of their term, …), but are a natural reaction to the electorate’s disgust with the liberals pushing much too far on immigration, wokeness, … The pendulum swung too far and the voters are correcting that.


This is what the true classical socialists (which the author seems to be or at least be very sympathetic to) don’t ever really seem to grasp. Yes, class struggle is real. But class struggle primarily takes place within the confines of the state, not on some international playing field. It is not, except in the most academic of pursuits, a tangible international conflict. Human solidarity is just an impossible goal. That’s why you see differing tolerances to socialist principles within different political cultures. And that’s a good thing. We get to see what works and what doesn’t. That’s a real marketplace of ideas. As opposed to the typical socialist approach of “we have all the answers.”

Marx and Engels didn’t live long enough to see this play out. But the Soviets found out quickly that the rest of the world wasn’t coming along for all sorts of reasons. And they then took a much different tack rhetorically once the revolutionary fire faded and task of actual governance began (and sadly/ironically, became just another iteration of a totalitarian, imperialistic state). China saw what was happening to the Soviet project and elected to go through the same growing pains somewhat voluntarily after Mao was out of the picture. And quite candidly tilts in the capitalistic direction in any event. So the “global critique of capital” is really just something to read about in one of Piketty’s books at this point.

And I’m sorry, but class does not transcend all other identities. Not even close. Sorry socialists, but you still haven’t killed God. And national borders still matter because preservation of shared culture still matters. People have other motivations and driving forces than pure materialistic gain.

Same old socialist arrogance . . .


Actually, this struggle did not transcend all other identities.

The elimination of the kulaks, “bourgeois elements”, the “privileged” and other class enemies added up to almost one hundred million dead in the Soviet Union, China, Cambodia and other socialist utopias.

One of the more dishonorable legacies of socialist movements in the 20th century was the piles of tens of millions of murdered people who had to be sacrificed to the respective marches towards equality.

Let’s hope that it will not. One should learn from mistakes.

And praising socialism without mentioning some of its major downsides seems a little, shall we say, partial?


Right? Like how could this guy write that paragraph with a straight face?


He wants a global wealth tax to solve problems like student loan debt which is a uniquely American problem and refers to international equality but only mentions western governments. He seems unaware that in order to be globally equal the standard of living in the west would go down not up because the majority of the planet lives in dire poverty. Also wealth accumulation doesn’t cause inequality or poverty, corruption does. A nation’s quality of life depends on the level of government corruption - the more the corrupt the poorer its citizens.


There are a more than couple of problems with Piketty’s critique of capitalism. First he fails in his dissection- he looks at the 1% when he should be looking at the 0.1% and what we see here is that wealth is almost always deployed productively and more often than not accrued through the creation of capital growth accumulated by forming businesses. Taxing these productive assets depletes them, and whilst their may be some value in worker cooperatives provided they adhere to the principles of the market, we are really choosing between two competing organisms. Do we want societies resources allocated by government or do we want these resources allocated by society itself through the market, with the most talented individuals responsible for delivery?

I would should suggest there is room for both, because there are goods and services which people need which the market will never furnish for any number of reasons. But generally, the market is better than government at allocating resources, and government is generally very wasteful. There are specific areas where this is less true, but overall one shouldn’t be surprised to find government consuming resources at a rate of 5 times that the market would use to accomplish the same. In some instances, such as with SpaceX, we see the private sector producing results with 1/36th of the resources government commissioning would entail.

But at another level, Piketty’s failure of specificity is even worse. He fails to account for the role of residential property in the creation of wealth and its division. One cannot help but wonder whether this is deliberate, because he wants to critique capitalism more generally. It’s unfortunate, because if he were to examine this very specific aspect of modern capitalism then he would see that we really are sleepwalking towards rentier economics. The problem is that demand in housing beyond a certain point actually stifles supply rather than furnishing it, for the simple reason that the scarcity costs which accrue are significantly higher than any increases in price. In effect, the provision of housing increasingly becomes an industry in which profits are rendered through the asset speculation of building land, with profits to be earned from actually building homes squeezed ever tighter.

The real problem is the Iron Triangle of Interest which prevails over the sector. On the one hand we have the banks and the land speculators, the financial interests, the former of whom are incentivised to see the mortgage debt which accumulates as an debt asset inflate per property, and the latter of which are increasingly hidden behind the veil of the offshore holding company and the private equity firm, so nobody and judge the size and scope of their asset speculation in building land and properties. Although, it may once have been true that private equity’s many customers were institutional, comprising pensions or insurance groups, an increasing trend has been a massive increase in the investments made by foreign Sovereign Wealth Funds, with profits rendered from this industry effectively a wealth transfer from the West to the Middle East.

The Second corner of the Iron Triangle of Interest is existing homeowners. Here it is possible to have a great deal of sympathy. Everybody wants to see the value of the investment in their home increase, but we have to recognise that as house prices continue to rise well above the rate of inflation, as they have done in most areas for the past few decades, their is an extent to which subsequent generations are spending more and more of their earnings as percentage of their income in either rents or through higher repayments. For many the goal of home ownership is increasingly out of reach, unless they have family who are either willing to lend them money or act as guarantor on their loan.

Finally, there is the worst element of the Iron Triangle of Interest, Government. In part because they want to ensure the future loyalty of the most committed voting demographic, the old- Government has decided to do nothing to tackle emerging housing crises throughout the West, instead preserving the status quo. In part, it’s also ideology. Around the world there has been a movement in government towards that housing should be concentrated more densely in urban areas, rather than in suburban ‘sprawl’ or rural housing. This despite the fact that almost no-one wants it live in cramped urban conditions, and people desperately want to move out to suburban or rural homes.

The fact that such urban housing fails to material in volume at the same time that suburban and rural development is blocked., only fuels the artificial scarcity that government itself is creating. There is ample land for building upon, even in areas with high population density such as the South of England. There are huge tracts of scrubland of no current economic or environmental value within 50 miles of London, yet the spurious notion of protecting the green belt is allowed to persist because it feeds the Iron Triangle of Interest.

The irony is that in the UK at least, we could increase house building by as much as 50% for twenty years and it would barely dent the upward growth in house prices. This a problem of undersupply which has existed for exactly 30 years, since 1992. In America, the situation is more complex and largely driven by location, but a shift to smaller three bedroom houses in suburban areas in demand, of the cul-de-sac neighbourhood layout, could actually insert an extra rung into the housing ladder, actually enhancing existing homeowners property values rather than threatening them (by creating a larger class of people able to move up five or ten year after buying). This would allay environmental fears, because it easier to plan and execute public transport routes in such designs, and well as providing a host of other benefits- children are much safer engaging in unstructured and unsupervised play in such neighbourhoods, which has proven benefits, in terms of cognitive development.

Anyway, that’s my two cents- as usual my essays are to be found on my Substack which is free to view and comment:

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Like Marx, Piketty is often an astute observer of society and politics. About economics he understands nothing at all.


Actually, Europe (and Japan) rebuilt rather quickly after WW2. Europe and Japan were essentially done rebuilding by around 1955 (the city of Rotterdam provides one example, locals thought it would take 100 years to rebuild after WW2. It actually took 7 years).

What makes the 1945-1970 period unique is the fast rate of technological advance (yielding higher profits and higher wages) back then. This is of course, the Gordon thesis. See Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds | NBER.

Another key factor impacting our period is the rise of China. China was not a significant factor from 1945 to 1970. Now it is.

Take a look at The Oil Drum | World Energy Consumption Since 1820 in Charts. Oil consumption (per-capita) rose astoundingly from 1945 to 1970. Since then it has declined. This isn’t the only reason for overall slower growth since 1970. But it probably is one factor.


All true. But the US didn’t have to rebuild, and didn’t have to resume operations after the loss of 50 million citizens. it had constructed an industrial powerhouse during the war, a powerhouse that would produce unprecedented innovation and wealth in the decades that followed.

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One which was purchased by the deal of the century with labour. People also fail to consider Hollywood and American music- American goods enjoyed the best PR and brand imaging in history, and people actually paid a premium for the message to encourage them to own or consume a small slice of the American dream.

Imagine that today- we will sell your adverts direct to the customer, make them pay for it and make huge profits. People would think you were made…

There are a lot of points here.

  1. How long it took Japan and Europe to rebuild is somewhat measurable. After WW1 and WW2 the US ran rather large trade surpluses supplying Europe with the means to rebuild. These surpluses lasted a few years and then went away.

  2. Europe and Japan did have to rebuild after WW2 (unlike the USA). However, this may have been a rather large advantage. Europe and Japan rebuilt with the newest technology while the US was stuck with older technology. Steel making is a case in point. The US employed the open hearth process for many years after the war. Europe and Japan moved on to the LD process.

  3. The human population losses from WW1 and WW2 are not that great. Check out “Population of Germany from 1800 to 2020” (• Population of Germany 1800-2020 | Statista). WW1 and WW2 show up, but are not overwhelming.


Piketty is Clue Less. On everything. But let’s just look at his belief that the modern economy is a result of “accumulation.”

As I wrote in 2014:

Piketty believes in the Marxian fallacy that wealth increases by saving and accumulation… No it doesn’t. Wealth comes from innovation and surprise. A guy invents a steam engine; pretty soon poor people can afford to cross the oceans in steamships. A bunch of guys develop horizontal drilling and hydraulic fracturing for oil and gas wells. Pretty soon they have transformed the global energy equation.

Plus: A guy invents the assembly line: in a couple of decades people are driving around in cars that cost 7 months of the average worker’s wages. A techie twerp invents the iPhone. Pretty soon kids in India with smartphones are coming up to tourists visiting rock temples and asking for a selfie.

Do you see the point? Inequality is beside the point. Because the next “innovation” or “surprise” will change the world. And “accumulation” had nothing to do with the case.

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Very perceptive comment. I would disagree about per-capita oil consumption. The falling number since 1973 is simply a result of greater efficiency in use. The amount of incremental GDP produced versus incremental energy input has declined by something like 30-40% since the 1970s.

The “bingo” explanation is slowing productivity growth. About that, there is no question. It reached its peak in the US in the 1940s (the late, cumulative effect of people moving from rural areas to urban industry and services), but was still significant until about 1975. At its peak, it was running above 4% per annum, a previously unimaginable rate. People did think it would go on forever. Starting in the 1960s, the political class starting making promises and creating expectations that it would go on forever, even it was it actually starting to slow.

Productivity growth actually went negative in the late 1970s and early 80s (depending on the exact definition). It picked up again in the mid- to late 80s, improving further in the late 1990s (the famous Greenspan idea of low-inflation growth spurred by IT). But it’s slowed again since the tech crash in the early 2000s. Much capital was wasted in the 2000s on building houses. More capital has been wasted since 2009 in manias and money-losing businesses like Uber. While households have improved their financial condition, governments and corporations have gorged on ultralow interest rates to go deeper and deeper in debt, to support lavish consumption, wars, etc., as well as parasitic activities like private equity and share buybacks unsupported by cash flow.