WHEN: Today, Monday, June 2nd
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a FIRST ON CNBC interview with Thomas Piketty, author of "Capital in the Twenty-First Century" and Paris School of Economics Associate Chair, on CNBC's "Squawk Box" today. Video from the interview is available at CNBC.com.
All references must be sourced to CNBC.
PIKETTY ON CETNRAL BANKS
WE CANNOT SOLVE EVERY PROBLEM WITH THE CENTRAL BANK. AND I THINK ONE OF THE DIFFICULTIES WE HAVE IN RIGHT NOW IN THE U.S., BUT ALSO IN EUROPE IS THAT WE ARE ASKING TOO MUCH TO CENTRAL BANKS AND MONETARY POLICY. I THINK WE NEED TO ASK MORE TO FISCAL POLICY. YOU KNOW, OF COURSE, FISCAL POLICY IS MORE COMPLICATED THEN MONETARY POLICY BECAUSE, YOU KNOW, WITH THE CENTRAL BANKS, YOU CAN PRINT BILLIONS OF DOLLARS OR EUROS IN ONE SECOND. SO THAT IS VERY EASY, THAT IS VERY TEMPTING. THE PROBLEM IS THAT SOMETIMES YOU DON'T KNOW WHAT YOU DO WITH THE MONEY.
PIKETTY ON TAX CODE
WRITING A TAX CODE IS MORE COMPLICATED. YOU GET THE PARLIAMENT TO AGREE, YOU NEED TO HAVE A PUBLIC DEBATE. BUT AT LEAST IF YOU HAVE PROGRESSIVE TAX INCOME AND WEALTH, YOU HAVE A BETTER SENSE OF WHO IS PAYING. AND YOU HAVE A BETTER SENSE OF WHERE THE MONEY IS GOING AND WHETHER YOU HAVE EQUITABLE DISTRIBUTION OF THE BURDEN OF ADJUSTMENT. WHEREAS, AS YOU WERE SAYING, YOU KNOW, SOMETIMES WITH MONETARY POLICY, IN FACT THOSE WHO ARE GAINING FROM ALL THIS PRINTING OF MONEY, ARE NOT THE PEOPLE YOU WOULD LIKE TO GAIN.
PIKETTY ON INCOME INEQUALITY
INEQUALITY IS NOT BAD, PER SE. IT IS, ACTUALLY, IT CAN BE USEFUL AND IT IS USEFUL TO SOME EXTENT FOR GROWTH, INNOVATION AND THE KIND OF FANTASTIC INCREASE IN LIVING STANDARDS THAT WE HAVE SEEN OVER THE PAST TWO CENTURIES. NOW THE QUESTION IS UNTIL WHAT POINT IS IT USEFUL? AND YOU KNOW, WHAT I WORRY ABOUT IS EXTREME INEQUALITY. SO ABOVE A CERTAIN LEVEL, YOU KNOW, INEQUALITY IS NOT REALLY USEFUL ANYMORE FOR GROWTH. AND IT CAN EVEN BECOME BAD FOR GROWTH, BECAUSE IT CAN PREVENT MOBILITY FROM HAPPENING. IT CAN LEAD TO A PERPETRATION OF INEQUALITY ACROSS GENERATIONS.
PIKETTY ON INCENTIVES
JOE KERNEN: THE OTHER CRITICISM HAS BEEN THAT YOU'RE FLYING UP HERE, LOOKING DOWN – YOU'RE LOOKING DOWN AT THE WAY INCOME IS, BUT YOU'RE NOT LOOKING FROM THE GROUND UP. WHERE SEEING THAT PEOPLE – PEOPLE NEED INCENTIVES TO WORK HARD.
THOMAS PIKETTY: TRUE. BUT THEY ALSO NEED EDUCATION. THEY ALSO NEED HEALTH, THEY NEED PUBLIC INFRASTRUCTURE. SO YOU KNOW, IF YOU DON'T INVEST IN EDUCATION AND IF YOU HAVE A LARGE GROUP IN THE COUNTRY THAT'S NOT PROPERLY EDUCATED, THAT DOESN'T HAVE THE RIGHT – THAT'S NOT GOOD FOR GROWTH.
JOE KERNEN: NO ONE WOULD DISAGREE, NOW YOU ARE TALKING ABOUT EQUALIZING OPPORTUNITY. NOT EQUALIZING OUTCOME.
PIKETTY ON PAY
WHEN YOU PAY SOMEONE $10 MILLION INSTEAD OF 1, DO YOU GET THE EXTRA PERFORMANCE FOR THE ENTIRE ECONOMY AND FOR THE REST OF SOCIETY THAT SOME PEOPLE CLAIM WE GET? NOW, WHEN I LOOK AT THE DATA, YOU KNOW, I DON'T SEE IT. WHEN I COMPARE THE DIFFERENT COMPANIES AND I COMPARE THE GROSS PERFORMANCE OF DIFFERENT INDUSTRIES ACROSS COUNTRIES AND ACROSS TIME, I DON'T SEE THIS EXTRA PERFORMANCE. NOW, IF I WAS TO SEE IT, IF IT WAS IN THE DATA I WOULD BE HAPPY TO SAY IT. I HAVE NO STAKE IN THIS.
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