This series will explore the widening Wealth Gap and its impact on class and race relations, excerpting heavily from Thomas Piketty, Professor at the Paris School of Economics, who has explored the structural cause of the wealth gap in his book Capital in the Twenty-First Century published in 2014. He created quite a stir, getting both rave reviews and harsh critiques. He brought the issue of a widening wealth gap to the limelight and has shown how war mitigated extreme wealth gaps in the past. And without a discussion and resolution, war may again mitigate the current wealth gap extreme.
Capital in the Twenty-First Century by Thomas Piketty, Professor Paris School of Economics, 2014, Excerpts
The central thesis of this book is that a small gap between the return on capital and the rate of income growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality.
The concentration of wealth and prospects for economic growth lie at the heart of political economy. The main driver of inequality – the tendency of returns on capital to exceed the rate of income growth – generates extreme inequalities that stir discontent and undermine democratic values.
There is no fundamental reason why we should believe that growth is automatically balanced. We should put the question of inequality back at the center of economic analysis and begin asking questions first raised in the nineteenth century. For far too long, economists have neglected the distribution of wealth.
Capital vs Income
Accumulation of Old Wealth
Racial Wealth Gap
Wealth Gap Correction - War
Wikipedia: Wealth inequality in the United States
The rich are accumulating more assets while the middle and working classes are just getting by. Currently, the richest 1% hold about 38% of all privately held wealth in the United States while the bottom 90% held 73% of all debt. According to the New York Times, the "richest 1 percent in the United States now own more wealth than the bottom 90 percent".
The distributive nature of tax policy has been suggested by some economists and politicians such as Emmanuel Saez, Thomas Piketty, and Barack Obama to perpetuate economic inequality in America by steering large sums of wealth into the hands of the wealthiest Americans. This claim has created much controversy and debate within the academic and political spheres.
Racial disparities: There are many causes, but inheritance might be the most important. Inheritance can directly link the disadvantaged economic position and prospects of today's blacks to the disadvantaged positions of their parents' and grandparents' generations.
In Capital in the Twenty-First Century, French economist Thomas Piketty argues that "extremely high levels" of wealth inequality are "incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies" and that "the risk of a drift towards oligarchy is real and gives little reason for optimism about where the United States is headed.