Piketty insists "it's time for Western countries to take the BRICS seriously" | Thomas Piketty

Western countries have ignored the BRICS for too long. As we witness the start of the 17th annual BRICS conference, what was once dismissed as a marketing term invented by Goldman Sachs now finds itself producing 32% of global GDP and with an ever-growing waitlist of countries seeking to join. Far from an opponent of the West, Thomas Piketty argues the West needs to seriously engage with the BRICS if we are to rein in multinational corporations and have any chance of controlling the global economy.

The war in Gaza threatens to widen the gap between North and South. For many countries in the South, and not only in the Muslim world, the thousands of civilian deaths caused by Israeli bombardments in the Palestinian enclave, 20 years after the tens of thousands of deaths caused by the United States in Iraq, will doubtless embody the West’s double standards for a long time to come.

All this is taking place against a backdrop in which the main alliance of so-called emerging countries, the BRICS, has just been strengthened at its Johannesburg summit a few months ago. Initially created in 2009, the BRICS have comprised five countries since 2011: Brazil, Russia, India, China, and South Africa.

Differences in average national income per capita remain considerable, of course: almost €3,000 per month in the G7, less than €1,000 per month in the BRICS, and less than €200 per month in sub-Saharan Africa, according to the latest data from the World Inequality Lab.

Expressed in terms of purchasing power parity, the combined GDP of these five countries will exceed €40,000 billion by 2022, compared with just €30,000 billion for the G7 countries (United States, Canada, Japan, Germany, France, United Kingdom, and Italy), and €120,000 billion on a global scale (an average of just over €1,000 per month for the world’s 8 billion people). Differences in average national income per capita remain considerable, of course: almost €3,000 per month in the G7, less than €1,000 per month in the BRICS, and less than €200 per month in sub-Saharan Africa, according to the latest data from the World Inequality Lab.

In a few words, the BRICS present themselves to the world as the planet’s middle class—those who have succeeded, through hard work, in improving their condition, and who have no intention of stopping there.

SUGGESTED VIEWING The rise of the rest With Malcolm Rifkind, Penny Mordaunt, Elizabeth Knup, Inna Sovsun, Isabel Hilton

In 2014, the BRICS created its own development bank. Based in Shanghai, it remains modest in size but could compete with the Bretton Woods institutions (International Monetary Fund and World Bank) in the future if they do not radically reform their voting rights systems to give greater prominence to the countries of the South. At the Johannesburg summit in August, the BRICS decided to welcome six new members (Saudi Arabia, Argentina, Egypt, United Arab Emirates, Ethiopia, and Iran) from January 1, 2024, reportedly chosen from among some 40 candidate countries.

China’s political model increasingly resembles a perfect digital dictatorship, and no one wants it any more than Russia’s military kleptocracy.

SUGGESTED VIEWING Russia, China, and the future of world power With Michael Clarke

Let’s face it: It’s time for Western countries to overcome their arrogance and take the BRICS seriously. It’s easy to point out the many inconsistencies and contradictions within what remains a loose, largely informal club. China’s political model increasingly resembles a perfect digital dictatorship, and no one wants it any more than Russia’s military kleptocracy. At least that guarantees the other leaders that the club won’t stick its nose in their business.

The BRICS also include some long-standing electoral democracies, which are certainly experiencing difficulties, but not necessarily more serious than those observed in the West. India has more voters than all the Western countries put together. Turnout was 67% at the last general election in 2019, compared with just 48% in France in 2022, where there has been a sharp drop (unprecedented for two centuries) in the turnout of the poorest communes relative to the riches US democracy has also shown all its fragilities in recent decades, from Guantanamo to the assault on Capitol Hill, and has even tended to set a bad example for Brazil’s Trumpists.

What can Western countries do to restore their credibility in the South and reduce global fractures? First of all, they must stop giving lessons in justice and democracy to the whole world, even though they are often ready to make pacts with the worst despots and the most dubious fortunes as long as they can make enough money out of it. More generally, Western countries need to formulate concrete proposals to show that they are finally determined to share power and wealth. This requires far-reaching changes to the global political and economic system, whether in terms of the governance of international organizations, the financial system, or the tax system.

Many countries in the South are extremely poor, particularly in Africa, and face such severe difficulties in running their schools, free clinics, and hospitals that such a system would make an enormous difference, even if it were applied to only a small fraction of the revenues collected from the world’s multinationals and multi-millionaires.

In concrete terms, we need to make it clear that the target is a minimum tax on the planet’s most prosperous players (multinationals, multimillionaires), with a redistribution of revenues between all countries, according to their population and exposure to climate change.

This is not at all what has been done to date: Minimum taxation concerns only a small number of multinationals; its rate is too low and easily circumvented; and above all, the profits benefit almost exclusively the major countries of the North. The key focus must be redistributing revenues according to the needs of each country, and not according to existing tax bases. Many countries in the South are extremely poor, particularly in Africa, and face such severe difficulties in running their schools, free clinics, and hospitals that such a system would make an enormous difference, even if it were applied to only a small fraction of the revenues collected from the world’s multinationals and multi-millionaires.

In The Ministry for the Future, US author Kim Stanley Robinson imagines a world in which the transformation of the economic system only occurs after major climatic catastrophes: A heat wave causing millions of deaths in India, and vengeful eco-terrorism from the South shooting down private jets and sinking container ships, all with the covert support of a UN agency despairing of the North’s inaction.

Let’s hope that competition from the BRICS will encourage the rich countries to grasp the scale of the challenges and share the wealth before it comes to that.

The following is an excerpt from Thomas Piketty’s Equality Is a Struggle: Bulletins from the Front Line 2021 - 2025, published by Yale University Press.