When inequality gets too extreme, then it becomes useless for growth, and it can even become bad because it tends to lead to high perpetuation of inequality over time and low mobility.
Interpretation
Extreme inequality can hinder growth and perpetuate further inequality, limiting social mobility.
This quote by Thomas Piketty illustrates the detrimental impact of severe inequality on economic growth and social mobility. When wealth and resources are disproportionately distributed, it not only stifles development but also creates a cycle that makes it increasingly difficult for individuals to improve their socio-economic status, leading to a stagnation of opportunity and potential.
In practice
In a keynote speech on economic policy, consider using this quote to highlight the risks of ignoring inequality.
Contrary to a tenacious myth, France is not owned by California pension funds or the Bank of China, any more than the United States belongs to Japanese and German investors. The fear of getting into such a predicament is so strong today that fantasy often outstrips reality. The reality is that inequality with respect to capital is a far greater domestic issue than it is an international one.
The main force pushing toward reduction in inequality has always been the diffusion of knowledge and the diffusion of education.
Over a long period of time, the main force in favor of greater equality has been the diffusion of knowledge and skills.
There is one great advantage to being an academic economist in France: here, economists are not highly respected in the academic and intellectual world or by political and financial elites. Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.
When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.
Having a decent share of the national wealth for the middle class is not bad for growth. It is actually useful both for equity and efficiency reasons.
The truth of good economic doctoring is to know the general principles, and to really know the specifics. To understand the context, and also, to understand that an economy may need some tender loving care, not just the so-called hard truths, if it's going to get by.
The real source of market promise is not the wealthy few in the developing world, or even the3 emerging middle-income consumers. It is the billions of aspiring poor who are joining the market economy for the first time.
People who think a tax boost will cure inflation are the same ones who believe another drink will cure a hangover.
If workers are more insecure, that's very 'healthy' for the society, because if workers are insecure, they won't ask for wages, they won't go on strike, they won't call for benefits; they'll serve the masters gladly and passively. And that's optimal for corporations' economic health.
The free market is not only a more efficient decision maker than even the wisest central planning body, but even more important, the free market keeps economic power widely dispersed.
When corporations refuse to practice due diligence by not establishing grievance mechanisms for remedy of abuses against the hidden 94% of their workforce in their global supply chains, they perpetuate a depraved model of profit-making that has driven inequality to a level now seen as a global risk in itself.
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