24 February, 2011

The consolidation of power and wealth

Just how much has the world changed?

From 1939 to 1973, during the 24 years from the start of WW2 to the first oil crisis the US’s average income grew by $30,500. 72% of this economic growth in incomes went to the poorest 90%, and 28 % went to the richest 10%.

Over the following 24 years, between 1974 and 2008, the US’s average income grew by $11,000 – average income of the poorest 90% declined, and all the growth went to the richest 10%, mostly to the richest 1%.

Why? One plausible explanation points to the "winner-take-all" nature of American politics, and the use of wealth to purchase political power, which in turn is used to protect and transfer wealth to the top one percent.

A tip of the hat to Resilience Science and economist Emmanuel Saez.

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