1/1/2024 0 Comments Plutocracy meme“The greatest clamor for reform should come from those who support the market system.” “Little undermines the case for a market economy more than the perception that there is injustice in the rewards that it generates,” they argue in a recent paper. ![]() Their work is theoretical, but beyond the campus green what may be particularly interesting is the way they frame the wider debate. Timothy Besley and Maitreesh Ghatak, both of the London School of Economics, make a robust case for higher taxes on bankers’ bonuses. The impact and the structure of higher taxes for the rich are a more complicated and controversial issue. “That seems very right and very reasonable.” “Economics would suggest that when you have big increases in inequality, the top tax rate should rise,” Van Reenen said. You can say it is a triumph of the human capitalists over the physical capitalists.”Īmong economists who study the surge in pay at the top, it is pretty much a truth universally acknowledged that taxes should rise at the summit, too. “These incomes come from the labor market. “This isn’t the ‘Downton Abbey’ rentier class,” explained Van Reenen, who has found a similar trend in Britain. presidential election campaign had it, built it themselves: 69 percent. By 2011, the super-rich had gotten much richer - the combined wealth of the Forbes 400 was $92 billion in 1982 and had surged to $1.53 trillion by 2011 - and many more of them had, as the meme of the 2012 U.S. They found that in 1982 just 40 percent of these plutocrats had built their own businesses. Steven Kaplan of the University of Chicago and Joshua Rauh of Stanford University in California studied Forbes magazine’s annual list of the 400 richest Americans. One of the most striking findings will probably give comfort to the plutocrats: In contrast to previous generations, the super-rich today tend to have earned their fortunes rather than inherited them. Their efforts made it to the economic major leagues in January when Van Reenen convened a panel discussion on extreme wage inequality at the prestigious annual get-together of the American Economic Association. Van Reenen and some like-minded colleagues have been working to fill that gap. If anything, Van Reenen said, academics “have tended to focus on the bottom of the distribution, much more than the top.” ![]() “It shows you that the media’s focus on the very rich and on bankers’ bonuses wasn’t misplaced.”īut while much of the shift in income distribution has been at the apex of the pyramid, that is not where most academic research on rising income inequality has been focused. “A lot of the action has been at the very top end of the distribution, the top 1 percent or the top 0.1 percent,” Van Reenen, director of the Center for Economic Performance at the LSE, told me. In Britain, the trend was almost identical: The top 1 percent received 15.4 percent of the national income in 2007 compared with 5.9 percent in 1979. According to a study by John Van Reenen of the London School of Economics and Brian Bell of Oxford University, the share of national income earned by the top 1 percent in the United States surged to 18.3 percent in 2007, from 8 percent in 1979. But when it comes to the growth of the super-rich, the tabloids may have gotten it right. NEW YORK (Reuters) - Academics can be dismissive of the concerns of the popular media.
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