First the development described in the article “Our Broken Economy, in One Simple Chart” by David Leonhardt are not exclusive for the American context. As Thomas Piketty has shown with a multitude of statistics this development of raising inequality are roughly similar in Europe and Sweden, even if the levels and detailed trends differ among the different European nations.
Pikettys answers are the following. The massive historical data are used to describe the evolution of inequality since the beginning of the industrial revolution. In the 18th and 19th centuries western European society was highly unequal. Private wealth dwarfed national income and was concentrated in the hands of the rich families who sat atop a relatively rigid class structure. This system persisted even as industrialization slowly contributed to rising wages for workers. Only the chaos of the first and second world wars and the Depression disrupted this pattern. High taxes, inflation, bankruptcies and the growth of sprawling welfare states caused wealth to shrink dramatically, and ushered in a period in which both income and wealth were distributed in relatively egalitarian fashion. But the shocks of the early 20th century have faded and wealth is now reasserting itself. On many measures, Piketty reckons, the importance of wealth in modern economies is approaching levels last seen before the first world war.
In short, what we have seen and experienced in the last thirty odd years is a return to a long term historical levels of inequality. Personally I am not fully in agreement with that conclusion, but at this moment I have nothing better to present!
Piketty has met both criticism (his political solutions) and positive reviews from among others Nobel Prize winner Paul Krugman and others. What almost everybody seems to be agreed upon is the impressive and massive data detailing changes in the concentration of income and wealth.
The Economist hailed Piketty as “the modern Marx (Karl , that is)”. Note the ironic blink!
The development and figures raised in the article and the similar development in Europe is a causal explanation (even if far from the only causal factor) to the raise of nationalistic popular movements in the US ( Donald Trump) and in Europe (Brexit, and the new populist and increasingly popular parties including SD ( in the Swedish context the welfare mass migration is a strong driving force behind SD).
What Marx (Karl) would have called the proletarization of the middle class could be a useful term to label what the charts in the article shows. In connection with the Globalization and the resulting strong impetus in the political actions from European Governments. I would also guess that strong impact of the neo-liberal values and political arguments/reforms in the different national contexts also can be part of an explanation of the development of a strong different income distribution. The consequences seen in the US and Europe are not inspiring for the future whether we look at the economic income distribution or from the national political point of view. As the income inequality distribution could be expected to continue to increase we can also – in connection with other causal factors – expect further political upheavals down the road.
I would have expected a stronger focus on distributional questions in the national political debate. Though Pikettys book came in English 2014 I must conclude that we have not seen much of that debate in Sweden. Why is that so? The complete domination of neo-liberal values in big politics? Another factor could be that the social and political problems and strain on public budgets caused by the welfare mass migration have overshadowed the increase in inequality and income distribution. But that is just a guess. I have not analyzed it in any depth!
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