Tipping The Scale On Wealth Inequality Essay

Tipping The Scale On Wealth Inequality Essay

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Tipping the Scale on Wealth Inequality
On November 8th, 2014, The Economist published an online version of its printed article titled “Forget the 1%”, that compared some of the views found in Thomas Picketty’s highly acclaimed book, Capital in the Twenty-First Century (2013), to other recent studies. For example, the article mentioned a 2004 study that focused on estate-tax data performed by Wojciech Kopczuk of Columbia University and Emmanuel Saez of the University of California, Berkley. It also took notice of the results rendered by New York University student, Edward Wolff’s study of Federal Reserve data as it related to consumer finance, and finally the Economist included an up close look at the research that Emmanuel Saez and Gabriel Zucman of the London School of Economics jointly performed on the topic. The article claimed that Picketty’s stance on wealth inequality is that wealth is controlled by the rich and will eventually turn back the hands of time to “an 18th century heritage society” (The Economist). That was to say that presently it is more lucrative for someone to marry an heir to riches than for one to launch a business. Is Piketty correct?
The Economist brought to the attention Financial Times editor Chris Giles, who suspected that Picketty’s research was unreliable, however, the editorial points out that recent studies, such as that performed by Saez and Zucman, do suggest that the wealth gap in America is reaching an all-time high as opposed to some of the earlier research in the likes of the collaborative research efforts of Kopczuk and Saez, which resulted in a similar outcome to both Wolff’s and Piketty’s study in that wealth inequality was rising at a slow rate. For instance, according to the earli...

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...s findings, they suggested that wealthy families are younger than they were generations ago and earn a bigger piece of the pie. For example, in 2012, their labor income was 3.1%, but was only 0.5% before 1970. The article went on to reincorporate Piketty’s view noted as ‘“patrimonial capitalism’”. Thereafter, making a brief mention of Mark Zuckerberg and Paris Hilton recognizing them as part of the young rich club, and likened to Hilton as being an heir to fortune. Recently, the wealthy’s assets in stocks have smoothed out, whereas their assets in bonds have increased said The Economist, so in the end, the article expressed that ultimately, the treasures of most moguls are in stocks of their own firms which suggests that the prosperities of America may soon have less to do with starting one’s own business, which agrees with Piketty’s position on this issue.

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