Author Piketty: 'Let's get fiscal'

'Extreme' inequality bad for growth: Piketty

Central banks may have averted the impending doom following the financial crash of 2008, but French philosopher Thomas Piketty has told CNBC it's now time for governments to step in and deliver the right progressive taxation on income and wealth to wipe out extreme inequality.

"I think we have been asking too much of central banks in the's easy for them to print money, but sometimes they don't know what they are going to do with it," he told CNBC Thursday.

"I think the right solution, the right response is to ask more to fiscal the end of the day you have a better sense of what you do with the money and how much you are asking to the different groups in society."

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Piketty's new book "Capital in the Twenty-First Century" has inspired an economic debate the likes of which hasn't been seen in at least four years. Topping bestseller lists and regularly selling out at online retail stores, the book has proven fodder for Keynesian economists while riling supply-side advocates who believe Piketty's prescription of massive tax increases for the wealthy is a sure-fire way to kill growth.

Thomas Piketty
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Speaking about the content of his book, Piketty once again took aim at economic policies in the U.S. over previous decades and the wealth gap that he believed top executives have accentuated themselves.

"There seems to be some evidence that some people at the top of the pay distribution in large corporations tend to have larger influence on setting their own pay," he said.

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"The big decline in income tax progressivity that has happened, in particular in the United States, in the 1980s and 1990s has probably increased the incentives for top managers to try to put the right people in the right compensation committee so as to increase their own pay."

His own research claims that real minimum wages - adjusted to remove the effects of inflation - in the U.S. are now at a lower level than they were half a century ago in the 1960s.

January data from the Congressional Research Service – the public policy research arm of the United States Congress – gave historical data for the statutory minimum wage running back to the 1940s. The figures show that the minimum wage in real terms (expressed in July 2013 dollar values) stood at $10.69 in 1968. This then fell of the following decades and stood at $7.25 in November 2013.

Read MoreInequality disaster prevention

Rather than allowing natural market forces to intervene, or letting central banks inflate what he says could be dangerous asset bubbles, Piketty's solution is taxation, education and a higher minimum wage for workers.

"All these solutions you don't want to choose between them, you want all of them. And it's really with the proper combination that we really will increase the share of national wealth going to the middle class and going to the bottom parts of society," he said.