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Is Rising Income Inequality Inevitable? A Critique of the Transatlantic Consensus

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Wider Perspectives on Global Development

Part of the book series: Studies in Development Economics and Policy ((SDEP))

Abstract

This chapter addresses one of the most important economic issues facing our societies and the world as a whole: rising income inequality. There is a widely held belief that rising inequality is inevitable. Increased inequality is the result of forces, such as technological change, over which we have no control, or the globalization of trade, which people believe, despite historical evidence to the contrary, to be irreversible. Kuznets (1955) suggested that income inequality might be expected to follow an inverse-U shape, first rising with industrialization and then declining. Today, the Kuznets curve is commonly believed to have doubled back on itself: the period of falling inequality has been succeeded by a reversal of the trend. Seen in this way, the third quarter of the twentieth century was a Golden Age not just for growth and employment, but also for its achievement in lowering economic inequality. On this basis, the marked rise in wage and income inequality observed in the United States and the United Kingdom in recent decades will unavoidably be followed by rises in other countries, and indeed worldwide. Policy can make little difference.

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Authors
  1. Anthony B. Atkinson
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© 2005 United Nations University

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Atkinson, A.B. (2005). Is Rising Income Inequality Inevitable? A Critique of the Transatlantic Consensus. In: Wider Perspectives on Global Development. Studies in Development Economics and Policy. Palgrave Macmillan, London. https://doi.org/10.1057/9780230501850_3

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