But in many countries, including the United States, such initiatives have been blocked by “economic elites” because they inevitably challenge the interests of certain individuals and groups, the report says, affecting the balance of power in nations that pursue greater economic redistribution.
The broad contours of income and wealth inequality in the United States are, at this point, well-known. The top 1 percent of households have roughly doubled their share of the nation’s wealth since 1980, leaving less behind for everyone else. The 400 richest Americans now have significantly more moneythan the 150 million Americans in the bottom 60 percent of the distribution.
In the past several decades, paychecks of rank-and-file workers have stagnated even as they have delivered on the growing profits demanded by their bosses and shareholders. As the U.N. report notes, the average compensation for a chief executive at a Standard & Poor’s 500 company was $14.5 million in 2018, while the average production and nonsupervisory worker took in about $40,000.
Defenders of the economic status quo have argued, at times, that inequality is probably not rising all that much. But even if it is, it may well be theinevitable byproduct of a capitalist society and, in fact, it might actually be good. Economic inequality, in this view, is simply the price of paying a fair remuneration to the people who produce the iPhones and the cool apps and the free shipping that all of us — even the less fortunate — are now able to enjoy.
The U.N. report notes, however, that rampant inequality is harmful even to people at the top of income and wealth distributions. Unequal societies “grow more slowly and are less successful at sustaining economic growth,” as numerous studies have shown. As economic conditions deteriorate in lower and middle classes, we may get to a point where a critical mass of the population can no longer afford the iPhones and cool apps and free shipping that are driving our economy, causing a recession. In the end, the trouble with capitalism may be that eventually you run out of other people’s money.