From the climate crisis and widening inequality to unaffordable housing and the rapid expansion of artificial intelligence, a group of leading progressive economists is arguing that the response to today’s economic pressures requires more than adjustments to existing policies. In interviews with El País, Thomas Piketty, Branko Milanovic, Abhijit Banerjee, Mariana Mazzucato, Dani Rodrik, Daron Acemoglu and Ha-Joon Chang set out proposals ranging from higher taxation of the wealthy and international climate measures to stronger public investment, industrial policy and greater bargaining power for workers.
The proposals emerge as economic insecurity fuels political discontent. The source describes a world facing increasingly visible climate damage, workers worried about being replaced by artificial intelligence, young people unable to afford homes and a large population in the global South living in poverty. At the same time, the political right is gaining support. The economists interviewed by El País offer different explanations and remedies, but many of their arguments converge on the idea that governments need to intervene more actively rather than leaving major economic and social problems to markets alone.
Piketty’s approach combines inequality and climate change rather than treating them as separate problems. During the presentation of the Global Justice Project, a report co-authored by Piketty and 44 other academics, he warned that governments could repeat the mistakes behind France’s “yellow vest” protests if environmental taxation disproportionately affected middle- and working-class households. The report argues that limiting global warming to below two degrees by 2100 is possible while substantially increasing incomes for much of the world’s population.
Its proposals include reforming the international financial system, reducing meat consumption and imposing taxes of up to 20% on the wealthiest to finance a sovereign fund. The fund would support the energy transition and redirect part of global capital flows towards education and healthcare. The report also proposes potentially imposing corrective tariffs of up to 180% on countries that refuse to join an international coalition. Its wider ambition is to reduce working hours, increase global spending on education and health and raise incomes across much of the world’s population.
Milanovic sees the significance of the project less in whether every numerical target can be achieved than in its attempt to connect problems that are normally addressed separately. He argues that taxation of high incomes and wealth, global reparations, reductions in inequality, lower emissions and changes in the composition of economic output form part of a single system. He describes the report as a useful framework for thinking about the future because it integrates different dimensions of the problem rather than isolating them.
Banerjee focuses on climate policy that could be implemented without waiting for a global agreement. He argues that the European Union has sufficient economic weight to impose stronger carbon requirements on countries that do not adequately price emissions. In particular, he points to the EU’s large market for US technology products as a source of negotiating power. He also criticises a system in which European producers face substantial carbon costs while major trading partners face weaker requirements.
For Mazzucato, the central problem is the diminished role of the state after decades of neoliberal economic thinking. Rather than governments simply regulating markets or repairing damage after it occurs, she argues that they should establish missions that coordinate public institutions and shape private investment. She cites the US space programme of the 1960s, when NASA defined the objective of reaching the Moon and private companies competed to fulfil the contracts, as an example. She also points to Brazil’s effort to place ecological transition at the centre of government policy.
Rodrik similarly argues for a more active industrial policy, citing China’s green industrial strategy as an example. He says some of the most significant reductions in the cost of solar power, wind energy and batteries have resulted from China’s combination of national targets, local implementation, public procurement, state-backed investment and experimentation. For Rodrik, failed projects should not automatically discredit industrial policy; he compares the approach with the risk-taking embedded in US government research programmes such as DARPA.
Artificial intelligence presents a different challenge. Acemoglu argues that its current energy requirements can work against climate objectives and warns that rapid replacement of workers by machines may produce what he calls “mediocre automation”. His proposed response is to change tax systems that favour capital over labour. He cites research showing that US companies faced an effective average tax rate of 25% on employees compared with 5% on capital. He also says governments should consider higher taxes on income or wealth rather than creating a specific AI tax, while leaving open the possibility of governments taking stakes in AI companies, albeit with significant risks to competition and neutrality.
Rodrik adds that technological productivity gains do not automatically translate into better conditions for workers. He points to Uber, Amazon, online restaurant ordering and delivery services as examples in which technology has transformed industries while workers have not necessarily captured the resulting gains. He therefore favours collective and sectoral bargaining arrangements that give workers greater negotiating power and encourage companies to improve employment conditions.
Banerjee takes the argument further by considering what happens if AI dramatically reduces the amount of human labour required. Even if AI assists rather than replaces workers, he argues, demand for many services will not expand enough to employ everyone displaced from particular occupations. Governments may therefore need to redesign social provision, including expanding care for older people and children and training people for new sectors. The question, in his view, is not simply how to redistribute AI-generated wealth but how society should function if large numbers of people have substantially more free time and fewer conventional jobs.
The same concerns over inequality appear in the debate over immigration. Banerjee argues that much of the political resentment surrounding migration is based on the belief that immigrants impose large costs on public finances. He says evidence from his research shows that lower-skilled immigration does not reduce local wages because new workers also create demand and, in some cases, businesses and jobs. He also argues that ageing European economies increasingly depend on immigration and that better planning and geographical distribution can improve integration.
Housing provides another example of how inequality can affect everyday economic security. Chang argues that the spending power of billionaires in the luxury property market can push up prices more broadly. His preferred lesson comes from Singapore, where the government controls a large share of the housing market and land. He says the model demonstrates that public provision can constrain private developers while also requiring housing to meet acceptable standards, with parks, public facilities and other amenities preventing affordable housing from becoming synonymous with poor living conditions.
Taken together, the economists do not offer a single programme. Their proposals differ over taxation, industrial policy, climate measures, AI regulation, immigration, housing and the role of public ownership. What connects them is the argument that governments can do more than correct failures after they occur. They can shape investment, distribute economic gains, protect workers and coordinate responses to problems whose effects cross national borders.
The debate presented by El País therefore centres on a fundamental question about the future of economic policy: whether governments should remain primarily regulators of markets or become active participants in determining how economic change takes place and who benefits from it. The economists disagree on the mechanisms, but their proposals place inequality, climate change, technological disruption and public policy within the same discussion.
