Following the previous post ‘How Neoliberal Economics Could Become Obsolete‘, it is interesting to put things back into perspective a la Piketty and his famous book ‘Capital in the twenty-first century‘.
Piketty shows that capital inequality has dramatically shrunk in the first half of the 20th century, mainly due to the world wars. The capital he mentions there however was mainly the Agricultural Age capital, previously inherited through generations. The Industrial Age capital represented by industrial millionaires such as famously John Rockefeller got less concentrated through taxation and anti-trust regulation that applied after a while; but also through the visionary intuition of capitalists like Henry Ford who did increase the wages of workers to reduce turn-over and make them able to buy his own products..
Are we not currently seeing the same evolution than in the early Industrial Age. Capital gets concentrated with a limited number of capitalists, monopolies develop in new activities. However regulations combined with the pressing need to provide society enough income to sustain consumption will progressively lead to another more stable situation with a stronger middle class?
Hopefully we won’t need a few world wars to accelerate that trend. The good thing is that we can see already some calls for increased regulation and breaking up of data monopolies, the only thing is to see this through.
I am not too pessimistic observing that whenever there is a new value source it seems to be a natural trend that a few innovators benefit from it first, concentrating wealth, but that on the longer term the need to find solvable clients will leads to more redistributive approaches. The speed of change and the resistance of the ones that currently benefit from the system are the unknown.
