A NEW paper by Emmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics suggests that, in America at least, inequality in wealth is approaching record levels. The authors examine the share of total wealth held by the bottom 90% of families relative to those at the very top. In the late 1920s the bottom 90% held just 16% of America’s wealth—considerably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929. From the beginning of the Depression until well after the end of the second world war, the middle class’s share of total wealth rose steadily, thanks to collapsing wealth among richer households, broader equity ownership, middle-class income growth and rising rates of home-ownership. From the early 1980s, however, these trends have reversed. The top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of America’s wealth, just shy of the 1929 peak—and almost the same share as the bottom 90% of the population.Apparently their data is considered good, at least by The Economist. My preference is to live in a country with a more equal distribution of wealth. I sympathize with the people at the bottom who have no wealth at all, and I am bothered by the 160,000 families who are worth so much money per family on average.
I suspect that the distribution is not good for the country. I suspect that it reduces the opportunity for young people from poor and middle income families for upward mobility. I suspect that the rich will be more interested in conserving their wealth than in investing in new ideas and growing the economy. I wonder it the rich will be willing to use their wealth to provide educational opportunities for children and youths from minority groups. I wonder whether the wealthy will use their economic power to buy political influence, which they will use for conservative rather than progressive purposes.
I suppose younger people will find out.
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