Piketty, T. & Saez, E. (2014) “Inequality in the long run“, Science, 23 May, Vol. 344 no. 6186 pp. 838-843.
This Review presents basic facts regarding the long-run evolution of income and wealth inequality in Europe and the United States. Income and wealth inequality was very high a century ago, particularly in Europe, but dropped dramatically in the first half of the 20th century. Income inequality has surged back in the United States since the 1970s so that the United States is much more unequal than Europe today. We discuss possible interpretations and lessons for the future.
The distribution of income and wealth is a widely discussed and controversial topic. Do the dynamics of private capital accumulation inevitably lead to the concentration of income and wealth in ever fewer hands, as Karl Marx believed in the 19th century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the 20th century? What do we know about how income and wealth have evolved since the 18th century, and what lessons can we derive from that knowledge for the century now under way? For a long time, social science research on the distribution of income and wealth was based on a relatively limited set of firmly established facts together with a wide variety of purely theoretical speculations. In this Review, we take stock of recent progress that has been made in this area. We present a number of basic facts regarding the long-run evolution of income and wealth inequality in advanced countries. We then discuss possible interpretations and lessons for the future.
Relevant posts:
- Teulings, C. (2014) “Why does inequality grow? Can we do something about it?“, VoxEU Organisation, 15 June.
- Merkel, W. (2014) “Failing Union Of Capitalism And Democracy Fuels Rise In Inequality“, Social Europe Journal, 03 June.
- Hoffer, F. (2014) “Inequality And Post-neoliberal Globalisation“, Social Europe Journal, 29 May.