Chapter 5: Interrogating the legitimacy of extreme wealth: a moral economic perspective
Thanks in particular to the work of Thomas Piketty and Emmanuel Saez, it has become clear that the rich and super-rich have made an extraordinary comeback since the 1970s (Atkinson et al., 2011; Piketty, 2014). This phenomenon is most clear in English-speaking countries in which neoliberalism, and with it, financialization, have been strongest. As their data show, the proportion of national income received by the top 1 per cent and fractions thereof in these countries over the last 100 years follows a U-shaped curve, bottoming out in the post-war boom; in the UK it fell from over 18 per cent in the 1920s to 6 per cent in the 1970s, from which it recovered to over 15 per cent by 2007, followed by a temporary dip and then recovery. Sweden and Norway have shallower U-shaped curves. Italy, Spain, New Zealand and Argentina have also seen a return of the rich, albeit with more fluctuations. China, of course, has seen a dramatic rise in top incomes in recent years. The return of the rich is much more limited in France, Denmark and Japan, which have more L-shaped curves. In Germany, the share of national income taken by the 1 per cent has stayed fairly flat but at a relatively high level since the war. In the Netherlands and Switzerland the income shares of the top 1 per cent have fallen since the post-war boom.
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