I think wealth actually is being redistributed, but not in the sort of nefarious way that some people are claiming.
Last year incomes went up for the lowest earners. When less wealthy people get more money they tend to buy material, mass market goods. Large corporations tend to be the main suppliers of those goods. Thus, increasing buying power at the lower end of the income distribution results in companies earning more money.
In other words the rich getting richer and the poor getting poorer (this time without starving). Sounds like a great mechanism for those who are wealthy.
Does it? The explanation was just to show what gradual increase in income inequality would look like (reducing the income of the lower bottom), which would eventually cause wealth inequality.
See [1] for a good summary. Then pair it with [2]. The full picture is, as usual, more complex than a catchy title can summarize, but the trends are pretty clear. If you're in the top 20% of earners, things are improving. If you're not, things are generally stagnant or getting worse. So we're heading for something that's kind of plutocracy and kind of a class-based system of "haves" and "have nots".
Your post is a pretty thoughtful one, so thanks :-)
I don't think your analysis is right, though. Here's why.
You're equating
wealth accumulation at the top reduces wealth accumulation at the bottom
which is formulated as a principle (i.e., a "universal"), with
If, however, a wealthy person pays himself a fat bonus from his company, while cutting jobs in order to instill fear, increase production, and drive salaries down, has clearly increased his accumulation of wealth at the expense of those beneath him.,
which is just a particular instance.
Yes, of course you can imagine scenarios in which a particular wealthy person does something that causes a particular group of less-wealthy people to have less wealth at the time - like lowering their salaries.
In fact, I think that
wealth accumulation at the top reduces wealth accumulation at the bottom,
stated as a generalization, is the same as the statement "the economy is zero sum."
Exactly, wealth is being concentrated at the top to such extremes that there is no more excess money in the lower/middle classes to tap. So somehow or other the increase in wages will have to come from the wealthy, whether through intentional redistribution, market forces, or peasant uprisings. Likely some combination of all three.
Eventually it just becomes a physics problem. If $100 exist in the world, and one guy has $99, and you need to fund something that takes $2, you have to get $1 out of the rich guy somehow.
I'm not sure what the mechanism would be for this- it seems like the last 100 years have been solidly trending toward greater and greater wealth inequality, with a brief hiatus caused by new deal policies and the great depression. Even worse, since the 50s wealth generated by increased production from automation has accelerated this trend, breaking the rough correlation between productivity and real median family income.
In short, there is no way we can fix this (as far as I can tell) without major radical restructuring of how we distribute wealth. I'd say the odds of that happening are pretty slim.
Can you show that the inequality changes lead to the median wealth changes? I could just as easily argue that the causality flows in the opposite direction you are implying. When median wealth increases, people stop policing inequality as fervently and when median wealth decreases, they recommit to addressing inequality.
The title is a bit misleading. This is mostly about inequality, using the "three levels of wealth" are a jumping off point to explore how income inequality has changed over time. The conclusion is nothing new: inequality is rising.
The study seems to be looking at the relative distribution of wealth, in which case the conclusion is just another way of saying that more and more income is being captured by the wealthy. Older people in any generation are going to tend to be in the higher percentiles of wealth, so a general trend in wealth distribution from the poor to the rich will tend to favor them and disfavor the young. No need for rationalizing based on millenials' character, or even their micro-economics. The simple mathematical fact is that capitalism, absent some correctional force like progressive taxation, trends inevitably toward greater wealth and income disparity between rich and poor. It's built into the system; not a bug, but a feature.
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