FacebookTwitterGoogle+RedditEmail

The Economics of Inequality

by ERIC ZUESSE

A book due out in March by economist Thomas Piketty, Capital in the Twenty-First Century, tracks both wealth-inequality and income-inequality, since around the year 1800.

It reports that wealth-inequality, during the 200 years 1810-2010, peaked just before World War I, and then plunged sharply until 1970, and thereafter rose just slightly.

For example, in 1810, shortly after the French Revolution (1789-1789), the top 1% in France held 46% of the wealth, but in 1910 that percentage peaked at 60%, and by 1970 it had plunged down to 21% and has stayed fairly flat, being 24% in 2010.

In Sweden it rose from 56% in 1810, to 61% in 1910, and then plunged to 17% in 1980, and was 21% in 2010.

In U.K. it was 55% in 1810, 69% in 1910, plunged to 22% in 1970, and was 28% in 2010.

In the U.S., it was 25% in 1810, 46% in 1910, 30% in 1940, 28% in 1970, and 34% in 2010.

All of Europe, as compared to the U.S., was less equal in wealth than the U.S. was before 1960, but more equal pikettythan the U.S. has been since 1960: the top 1% wealth-share in Europe was 52% in 1810 (compared to 25% U.S.), 63% in 1910 (45% U.S.), 44% in 1940 (30% U.S.), plunged to 20% in 1970 (vs. 28% U.S.), and was 24% in 2010 (vs. 34% U.S. — now the most unequal industrialized country).

So: wealth in the U.S. is now the most unequal of any Western country, whereas, prior to 1960, it was the most equal.

World Wars I & II hit Europe’s wealthiest very hard; and this hit-to-the-rich has greatly increased wealth-equality there.

By contrast, the richest Americans suffered only moderate wealth-loss from the Depression, and none from WWII, but have kept a fairly steady 30%-34% wealth-share since 1940.

This book also tracks income-inequality, which in the U.S. peaked in 1928, plunged during 1939-45 (WW II), then stayed flat, and then started soaring again in 1982, and reached an all-time high in 2007, and came down only slightly thereafter. Income-inequality was higher in Europe than in the U.S. until WW I, but has been higher here than in Europe since then.

Income-inequality in poor countries peaked during the 1940s, then plunged till 1980, and has been soaring since 1990 (as international corporations contract-out work to factories that are owned by local aristocrats there).

The inherited wealth-percentage was high almost everywhere until 1880, plunged from then till 1900, and gradually rose back up again and has been fairly steady at around pre-1880 aristocratic levels since 1970, when all sorts of taxes on the rich (especially inheritance-taxes) plunged in almost every country, as conservative economic theory took over in the wake of Ronald Reagan and Margaret Thatcher.

Thomas Piketty is one of the world’s leading empirical economists, and he specializes in empirical studies of inequality of wealth and of income.

His new book, which offers important hypotheses in economic theory to explain the economic changes that it reports, is already being praised as one of the most important works in decades within the field of economics.

Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

 

Weekend Edition
February 12-14, 2016
Andrew Levine
What Next in the War on Clintonism?
Jeffrey St. Clair
A Comedy of Terrors: When in Doubt, Bomb Syria
Ismael Hossein-Zadeh – Anthony A. Gabb
Financial Oligarchy vs. Feudal Aristocracy
Paul Street
When Plan A Meets Plan B: Talking Politics and Revolution with the Green Party’s Jill Stein
Rob Urie
The (Political) Season of Our Discontent
Pepe Escobar
It Takes a Greek to Save Europa
Gerald Sussman
Why Hillary Clinton Spells Democratic Party Defeat
Carol Norris
What Do Hillary’s Women Want? A Psychologist on the Clinton Campaign’s Women’s Club Strategy
Robert Fantina
The U.S. Election: Any Good News for Palestine?
Linda Pentz Gunter
Radioactive Handouts: the Nuclear Subsidies Buried Inside Obama’s “Clean” Energy Budget
Michael Welton
Lenin, Putin and Me
Manuel García, Jr.
Fire in the Hole: Bernie and the Cracks in the Neo-Liberal Lid
Thomas Stephens
The Flint River Lead Poisoning Catastrophe in Historical Perspective
David Rosen
When Trump Confronted a Transgender Beauty
Will Parrish
Cap and Clear-Cut
Victor Grossman
Coming Cutthroats and Parting Pirates
Ben Terrall
Raw Deals: Challenging the Sharing Economy
David Yearsley
Beyoncé’s Super Bowl Formation: Form-Fitting Uniforms of Revolution and Commerce
David Mattson
Divvying Up the Dead: Grizzly Bears in a Post-ESA World
Matthew Stevenson
Confessions of a Primary Insider
Jeff Mackler
Friedrichs v. U.S. Public Employee Unions
Franklin Lamb
Notes From Tehran: Trump, the Iranian Elections and the End of Sanctions
Pete Dolack
More Unemployment and Less Security
Christopher Brauchli
The Cruzifiction of Michael Wayne Haley
Bill Quigley
Law on the Margins: a Profile of Social Justice Lawyer Chaumtoli Huq
Uri Avnery
A Lady With a Smile
Katja Kipping
The Opposite of Transparency: What I Didn’t Read in the TIPP Reading Room
B. R. Gowani
Hellish Woman: ISIS’s Granny Endorses Hillary
Kent Paterson
The Futures of Whales and Humans in Mexico
James Heddle
Why the Current Nuclear Showdown in California Should Matter to You
Michael Howard
Hollywood’s Grotesque Animal Abuse
Steven Gorelick
Branding Tradition: a Bittersweet Tale of Capitalism at Work
Nozomi Hayase
Assange’s UN Victory and Redemption of the West
Patrick Bond
World Bank Punches South Africa’s Poor, by Ignoring the Rich
Mel Gurtov
Is US-Russia Engagement Still Possible?
Dan Bacher
Governor Jerry Brown Receives Cold, Dead Fish Award Four Years In A Row
Wolfgang Lieberknecht
Fighting and Protecting Refugees
Jennifer Matsui
Doglegs, An Unforgettable Film
Soud Sharabani
Israeli Myths: An Interview with Ramzy Baroud
Terry Simons
Bernie? Why Not?
Missy Comley Beattie
When Thoughtful People Think Illogically
Christy Rodgers
Everywhere is War: Luke Mogelson’s These Heroic, Happy Dead: Stories
Ron Jacobs
Springsteen: Rockin’ the House in Albany, NY
Barbara Nimri Aziz
“The Martian”: This Heroism is for Chinese Viewers Too
Charles R. Larson
No Brainers: When Hitler Took Cocaine and Lenin Lost His Brain
FacebookTwitterGoogle+RedditEmail