Wednesday, August 19, 2009

Income and Wealth Inequality

From Emmanuel Saez, a chart representing share of national income that the top .01 % hold.

It's interesting to look at political events that accompany trends within the chart.

In 1979 for instance, Paul Volcker, representing the very definite interests of the ruling class, stated that "The standard of living of the average American has to decline". Thus controlling inflation - not promoting full employment - became the overt goal of the Federal Reserve.

Another rapid rise in inequality occurred after the liquidation of the Soviet Union, and the increasingly capitalist development of China after Tiananmen. The collapse of the Soviet Union meant "the end of history", and removed the political restraints - especially the example and threat of expropriation - that decayed Communism placed on the capitalist world. The opening of China, and the stabilization of its internal politics, meant a vast pool of labor in the formerly non-capitalist world was now available for exploitation.

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