Complaints about inequality have taken the West by storm, and that accounts for the success of the book “Capital in the Twenty-First Century” by economist Thomas Piketty. Inequality is not a new topic for developing nations, notes author Chandran Nair. “Piketty, like every other economist, seeks to explain the world with reference to economic capital alone while ignoring the mother of all capitals – natural capital,” Nair writes. “Our economic model not only allows for but thrives on what is essentially a collective free ride on the back of natural capital.” Natural capital, including freshwater, clean air and rich soil, is underpriced and subject to massive overconsumption. Focus on economic inequality without proper management of natural capital will result in ongoing disasters including climate change. While Piketty recommends a global wealth tax, Nair suggests taxing access to natural resources. Nair concludes that addressing inequality in developing countries is the defining challenge of the 21st century. – YaleGlobal
http://yaleglobal.yale.edu/content/inequality-and-nature-capital-reminder-economists
