A primer on inequality

Economist Paul Krugman started what has become a 7-part overview of inequality in the United States: how it started, how it's going, and how it has corrupted our politics to an extent not seen since the 1890s:

Between World War II and the 1970s income disparities in America were relatively narrow. Some people were rich and many were poor, but overall inequality among Americans in terms of wealth, income and status was low enough that the country had a sense of shared prosperity. Things are very different today, as American society is beset by extreme inequality, economic fragmentation and class warfare.

What happened? The economic data show a huge widening of disparities in income and wealth starting around 1980, eventually undermining the relatively equal distribution of income we had from the 40s to the 70s. Moreover, growing disparities in income have led to growing disparities in political influence and the reemergence of what feels more and more like an oppressive class system.

But it hadn’t always been stable. People often call the period we’re living in a “New Gilded Age,” in recognition of an earlier era of extreme income and wealthy inequality. For the purpose of comparison, can we document that earlier era statistically?

[T]he 90-10 ratio (and other measures of wage inequality) suddenly declined in the 1940s, then stayed low for several decades before widening again. This is consistent with what we see in data on the share of income going to the top 1 percent. The relatively equal income distribution of postwar America didn’t evolve gradually. Instead it emerged quite suddenly, roughly during World War II, and didn’t disappear until decades after World War II ended.

Krugman planned a 2-part primer; as of yesterday, it has 7 parts. Spend the $6 on a Substack subscription and then an hour reading the series. It's worth it.