Wealth by stealth

Celebrated French economist Thomas Piketty shot to fame for his writings on inequality. Could his arguments lead to wealth taxes in New Zealand?

- DANYL McLACHLAN

In August 2014, a two-year-old girl from South Auckland, Emma-Lita Bourne, died of a brain haemorrhage after being admitted to Starship Hospital. The coroner’s report determined that the damp, cold conditions of the girl’s home – owned by Housing New Zealand, the government housing agency now rebranded as Kāinga Ora –may have contributed to her death. In the wake of the tragedy, media attention focused on the terrible housing conditions experienced by hundreds of thousands of children growing up in poverty here.

Public health researchers had long warned that these could have dire health consequences. In a 2021 paper co-authored by epidemiologist Michael Baker, researchers found that damp and mouldy housing accounted for a “substantial proportion of the burden of disease in New Zealand”. They estimated that it caused 229 deaths annually, with a total cost to society of about a billion dollars.

These are deaths of inequality. Children from middle-class or wealthy families are unlikely to be hospitalised for rheumatic fever or bronchopneumonia, the illness that led to Emma-Lita’s death.

France’s “celebrity economist”, Thomas Piketty, has spent his career arguing that inequality is the central problem in economics. He believes that, instead of focusing on growth or wealth creation, free-market economies such as New Zealand must recognise that we don’t allocate our resources morally or efficiently. He argues that the wealthiest have so much money that it distorts our politics, while the very poor have so little that they can’t afford to keep their children warm, well fed and healthy, or, in extreme cases, alive.