Thomas Piketty: New thoughts on capital in the twenty-first century

https://www.ted.com/talks/thomas_piketty_new_thoughts_on_capital_in_the_twenty_first_century

Thomas Piketty is a contemporary economist. He analyzed history and provided his priceless insights in this speech. First, he showed some diagrams to support his further arguments. He gave us two observations. One is good news the other one is not. The good news is that wealth inequality is not as deep as a century ago, although it is still very serve now. The bad news is that wealth inequality is always higher than income inequality. He believes this tendency will eventually lead to high concentration of wealth because rich people could invest some part of their fortune and pass the rest to their descendant.

He then proposed probably the most important formula in his research, which is  "r > g".
The meaning of this formula is that, in the long run, the return of capital(r) will exceed the growth rate of economy(g).
(Note: In  his talk, the speaker did not explain about the relationship between wealth and capital, but he spent some sections in his book to explain wealth and capital is equivalent)

When r is bigger than g, wealth grows faster than the national income. Wealth inequalities will be increased sharply. Therefore, the income inequalities from wealth would also be pushed up.  Piketty expected that in the 21st century, the rate of growth in the developed countries will slow down because of a slowing down of demographic dividend. Because of the reduction of population growth, the reduction in the return on capital will be much less, too. The difference between r - g will increase in the decades which will make wealth and income inequalities even worse.

The conclusion was that the small gap between 'r' and 'g' post-World War II was only a special case in human history. Piketty explained that is because of the two world wars. Without other forces to balance rising wealth inequality, capitalism will drive its engine toward extremely wealth inequality. When inequality becomes too extreme, it is useless for growth due to its low mobility in society. In the end of the talk, Piketty proposed solutions to fix this great issue, such as more financial transparency, wealth taxation. But he also admits that re-writing tax code is difficult to achieve.