In this episode, Eric Kades, Thomas Jefferson Professor of Law and Cabell Research Professor of Law at William and Mary Law School, discusses his article "Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (And Beyond)," published in the Boston College Law Review. Kades begins by discussing the implications of Thomas Piketty's work related to his seminal text Capital in the Twenty-First Century, which argues that the rate of return on capital is returning to its historical status of outpacing the rate of economic growth (r>g). He shows that this reversion to the historical norm will lead to the growth of dynastic wealth in trusts and estates, creating a "new feudalism." Policy tools in place to prevent such capital accumulation, mainly the common law Rule Against Perpetuities to prevent "dead hand" control over property and the estate tax, have been weakened through state and federal political developments. Kades notes that these developments are antithetical to the social, economic, and revolutionary legacy of American history. He suggests, as a potential solution to the growth of dynastic wealth, of a Tax on Perpetuities to prevent the over-accumulation of saved income and dis-incentivize the formation of excessive inter-generational trusts. And he discusses what people and policymakers should take away from these socioeconomic developments.
Ipse Dixit (June 21, 2019)
Nguyen, Luce and Kades, Eric, "Eric Kades on Inequality & the Rule Against Perpetuities" (2019). Popular Media. 513.