Lunchtime Must-Read: Ryan Avent: Forget the 1%. It’s the Top 0.01% Who Are Really Getting Ahead in America
>…Saez and… Zucman… uses a richer variety of sources…. The share of wealth held by the bottom 90% is an effective measure of ‘middle class’ wealth…. In the late 1920s the bottom 90% held just 16% of America’s wealth—-considerably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929…. By the early 1980s the share of household wealth held by the middle class rose to 36%—roughly four times the share controlled by the top 0.1%…. From the early 1980s… these trends have reversed…. The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealth—-back to the 1916 share, which is the highest on record…. The top 0.1%… hold 22% of America’s wealth…. The outsize fortunes of the few would not be too worrying were they largely the product of entrepreneurial activity…. The club of young rich includes not only Mark Zuckerbergs… but also Paris Hiltons…. The share of labour income earned by the top 0.1% appears to have peaked… held in the form of shares… levelled off… held in bonds has risen… hint[ing] that America’s biggest fortunes may be starting to have less to do with building businesses…
1. Most wealth will be deployed, at least at the relevant margin, not in productive entrepreneurial or labor-complementary activities but in at best parasitic rent-seeking activities.
2. Democratic politics will not save us–that only exceptional circumstances in the twentieth century allowed for a democratic politics of progressive social insurance to level society and so promote social welfare in the face of the Gramscian hegemony of the *bourgeoisie*.
Both of these seem to me to be quite plausible, and perhaps true. But I think Piketty would have been very well-advised to have spent a lot more time backing them up in his book than he in fact did…