hi clo,
this wouldn't be concerning if it was just that the wealthy get wealthier.
an economy isn't a zero sum game. if it grows and everyone becomes wealthy, there isn't a problem.
some folks have argued that wealth trickles down. this used to be called horse and sparrow theory. but many have observed that the result of a thirty year experiment in reduced redistribution has resulted in the concentration of wealth along a pareto curve. the wealthier folks are, the better they have done. the bottom two or three quintiles have done remarkably poorly.
so rather than wealthy folks getting wealthier, the problem is more that a large chunk of everyone else isn't sharing the spoils of economic growth.
of course, the majority wants access to wealth. and those who have it will say to such folks, quit moaning and work harder. that conversation heads nowhere.
but there's also an argument which avoids the moral issue of wealth distribution and thinks about the economics of the thing. that's the one i find most persuasive.
a healthy society spreads productivity gains around, so that the largest possible number of folks feels comfortable to take their own risks. it is those risks that create the next generation of wealth.
it is an unhealthy economy that concentrates wealth (or that ensures no one can get ahead). wealth concentration engenders a sterile future in which only a small number of people are in the position to take risks. this is the issue we face.
it's not like wealthy people are going to have all of the good ideas. in many cases, like sam walton or nelson rockefeller, it may be a person just had one.
but to a person who has succeeded in becoming rich, preservation of value is likely as important as an increase. or more so. one shouldn't expect the future of the economy of ideas to emerge from this group of people.
entrepreneurialism arises where folks are willing to take a risk to improve their future. that sometimes arises from desperation, although desperation usually results in a person seeking a job than creating one. but more likely, it comes from someone feeling they have the financial security to pursue their idea.
this occurs when wealth is broadly rather than narrowly distributed. folks speak glibly about incentives. but the decision to launch a business also depends on risk factors.
the research also seems to indicate that inequality is itself a cause of harm. markets seem likely to be more unstable when wealth is concentrated. why? because the loam of an economy is healthier when it has many sorts of ecosystems living within it.
so the problem of wealth concentration ought not to be about envy. the key issue is that an economy that lacks distributive mechanisms is weaker for everyone, including the wealthy. it is a failure of the marketplace that it concentrates wealth. an economy in which the market shares productivity gains is also a healthier one.
redistribution shouldn't be the job of governments. it only is because there is no one else to do the job. and in the us economy, one party seems devoted to concentration and seeks to prevent the adoption of measures which are meant to avoid it.
hence, your chart.
we know that concentration occurs in markets that are increasingly free of redistribution and/or regulation. wealth doesn't trickle down. it trickles up. productivity gains don't get shared, they get seized. the sparrow gets to eat only what the horse produces.
in my view, inequality sows the seeds of america's decline as the dominant global economy.
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