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74 TheEconomistOctober 26th 2019

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F

ormostofitshistory,Americahasbeen

a more egalitarian place than Eu-

rope—atleast,solongasyouexcludethe

abominationofslavery.Whitemigrantsto

theNewWorldfounditlessclass-bound

thantheold.Inheritedwealthcasta shor-

tershadow.In1810,accordingtoThomas

Piketty, aFrencheconomist, therichest

10%ofAmericanscontrolledlessthan60%

ofnationalwealth,comparedwithmore

than80%inEurope.Whenindustrialisa-

tionthreatenedtoestablishanaristocracy

like those across the Atlantic, the social

backlash was prompt and decisive. Re-

forms extended the vote to women and

protected workers’ rights, busted powerful

monopolies and introduced an income tax.

Franklin Roosevelt’s New Deal finished the

work begun in the late 19th century. By the

1950s, the American economy was not only

the most advanced in the world, but was

oncemorea bastionofegalitarianism.

The evolution of inequality since that

time thus represents a significant depar-

ture from American history. The incomes

of the rich have grown much faster than

those of the poor. From 1979 to 2016, the in-

come of the top 1% of Americans grew by a

cumulative 225%, compared with just 41%

for the middle-class. Wealth inequality,

too, has risen. Over the same period, the

shareofthecountry’swealth controlled by

thetop0.1%morethandoubled, to 20%. In

continental Europe,meanwhile, the gap

betweenrichandpoorhas widened only

slightly.Theshareoftotal national income

earnedbytherichest1%of Europeans has

increasedbytwopercentage points over

thepast 40 years,compared with ten per-

centagepointsinAmerica.

Politicalmomentumis building for a

response; severalDemocratic candidates

forthepresidencypromise to introduce

newwealthtaxes(seeBriefing). Even now,

though, the origins of the malaise are

poorlyunderstood.Analysis tends to focus

onproximatecauses,such as globalisation

ortheimpactoftechnology on the job mar-

ket.Thesematter,buthave also affected

otherrichcountries.Thesource of Ameri-

ca’stroublesliesdeeper.

Partoftheproblemis that American

policyhasexacerbated the effect of eco-

nomic pressures. In their new book, “The

Triumph of Injustice”, Emmanuel Saez and

Gabriel Zucman pin the blame for rising in-

equality squarely on the American tax sys-

tem. The authors—both economists at the

University of California, Berkeley—argue

that taxation in America has become less

progressive over the past four decades. In

the 1970s the rich paid twice as much in tax,

Inequality

Thebrokenladder

Inthepast,Americawasnotasunequalasithasbecome—andasitmight

beinthefuture

The Triumph of Injustice.By Emmanuel

Saez and Gabriel Zucman. W.W. Norton;

232 pages; $27.95 and £21.99.

The Meritocracy Trap.By Daniel Markovits.

Penguin Press; 448 pages; $30.

Allen Lane; £25.

Unbound. By Heather Boushey.

Harvard University Press; 272 pages;

$27.95 and £22.95

Books & arts

75 Aneverydayepic

76 Europeanculturalhistory

77 Plautilla Nelli’s “Last Supper”

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