A Relentless Widening of Disparity in Wealth
▻http://nytimes.com/2014/03/12/business/economy/a-relentless-rise-in-unequal-wealth.html
What if inequality were to continue growing years or decades into the future? Say the richest 1 percent of the population amassed a quarter of the nation’s income, up from about a fifth today. What about half?
To believe Thomas Piketty of the Paris School of Economics, this future is not just possible. It is likely.
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Is there a politically feasible antidote? Professor Piketty notes that the standard recipe — education for all — is no match against the powerful forces driving inherited wealth ever higher.
Taxes are, of course, the most feasible counterweight. Progressive wealth taxes could reduce the after-tax return to capital so that it equaled the rate of economic growth.
But politically, “the fiscal institutions to redistribute incomes in a balanced and equitable way have been badly damaged,” Professor Piketty told me.
The holders of wealth, hardly a powerless bunch, will oppose any such move, even if that’s what is needed to preserve capitalism against the populist impulses of those left behind.
Professor Piketty offers early-20th-century France as an example. “France was a democracy and yet the system did not respond to an incredible concentration of wealth and an incredible level of inequality,” he said. “The elites just refused to see it. They kept claiming that the free market was going to solve everything.”
It didn’t.