DEVELOPMENT MODULE 3 Main

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AchAl Mistry

3. POVErty, iNEQUAlity AND DEVElOPMENt

1. SN on measurement of income inequality with the help of suitable data and


diagram

Economists usually distinguish between two principal measures of income distribution for
analytical and quantitative purposes:

1. The personal or size distribution of income, and

2. The functional or distributive factor shares the distribution of income.

1. Size Distribution of Income

(a) Kuznets Ratio: The personal income distribution method focuses on individual incomes,
regardless of source, and divides the population into distinct groups or sizes. This method is
used to measure income inequality, with the Kuznets ratio, a measure of the degree of income
inequality between high- and low-income groups in a country, often used to determine the
proportion of total national income received by each income group.

(b) Lorenz Curve: Another way to analyse personal income statistics is to construct the Lorenz
curve. It is a graph depicting the variance of the size distribution of income from perfect
equality.

To construct the Lorenz curve the numbers of income recipients are plotted on the horizontal
axis, in cumulative percentages.

For example, in Fig. 14.1, at point 20, we have the lowest (poorest) 20% of the population; at
point 60, we have the bottom 60%; and at the end of the horizontal axis, all 100% of the
population has been accounted for.

The vertical axis shows the share of total income received by each percentage of the population.
It is also cumulative up to 100%, meaning that both axes are the same length.

The entire figure is enclosed in a square, and a diagonal line is drawn from the lower left corner
(the origin) of the square to the upper right corner. At every point on that diagonal, the
percentage of income received is exactly equal to the percentage of income recipients, for
example, the point halfway along the length of the diagonal represents 50% of the income being

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distributed to exactly 50% of the population. At the three-quarters point on the diagonal, 75%
of the income would be distributed to 75% of the population other words, the diagonal line in
Fig, 14.1 is representative of "perfect equality: in size distribution of income. Each percentage
group of income recipients is receiving the same percentage of total income. So, the bottom
40% will receive 40% of the income and the top 5% will receive only 5% of the total income.

Percentage of Income Recipients

Fig. 14.1: The Lorenz Curve

The Lorenz curve shows the actual quantitative relationship between the percentage of income
recipients and the percentage of the total income they did receive during a given period, say a
year. In Fig. 14.1, we have divided both the horizontal and vertical axes into ten equal segments
corresponding to each of the ten decile groups. Point A shows that the bottom 10% of the
population receives say, only 1.8% of the total income, point B shows that the bottom 20%
receives 5% of the total income, and so on for each of the other eight cumulative decile groups.

Note that at the halfway point, 50% of the population is receiving only 19.8% of the total
income.

The more the Lorenz line curves away from the diagonal (line of perfect equality), the greater
the degree of inequality represented. The extreme case of perfect inequality (i.e., a situation in
which one person receives all of the national income while everybody else receives nothing)
would be represented by the congruence of the Lorenz curve with the bottom horizontal and
right-hand vertical axes.

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No country exhibits either perfect equality or perfect equality or perfect inequality in its
distribution of income. Therefore, the Lorenz curves for different countries will lie somewhere
to the right of the diagonal in Fig. 14.1. The greater the degree of inequality, the greater the
bend and the closer to the bottom horizontal axis the Lorenz curve will be. Two representative
distributions are shown in Fig. 14.2 one for a relatively equal distribution Fig. 14.2 (a)] and the
other for a relatively unequal distribution [Fig.14.2 (b)]. Lorenz curves can also be used to
study inequality in the distribution of land, education health, and other assets.

Fig. 14.2 (a) Fig. 14.2 (b)

A Relatively Equal Distribution A Relatively Unequal Distribution

Fig. 14.2: Degree of Inequality in Income Distribution

Four possible Lorenz curves such as might be found in international data are drawn in Fig.
14.3. In the "Lorenz criterion" of the income distribution, whenever one Lorenz curve lies
above another Lorenz curve the economy corresponding to the upper Lorenz curve is more
equal than that of the equal than that of the lower curve. Thus, economy A may unambiguously
be said to be more equal than economy D.

Figure 14.3 Four possible Lorenz Curves

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Whenever two Lorenz curves cross, such as curves B and C, the Lorenz criterion states that we
"need more information" or additional assumptions before we can determine which of the
economies is more equal. For example, we might argue on the grounds of the priority of
addressing problems of poverty that curve B represents a more equal economy since the poorest
are richer, even though the richest are also richer and hence the middle class is " squeezed").
But others might start with the assumption that an economy with a stronger middle class is
inherently more equal, and those observers might select economy C. One could also use the
Gini coefficient to decide the matter.

(c) Gini Coefficient: A summary measure of the relative degree of income inequality in a
country can be obtained by calculating the ratio of the area between the diagonal and the Lorenz
curve. divided by the total area of the half-square in which the curve lies. In Fig. 2, this is the
ratio of the shaded area A to the total area of the triangle BCD. This ratio is known as the Gini
concentration ratio or Gini coefficient,

Gini coefficients are aggregate inequality measures and can vary anywhere from 0 (perfect
equality) to 1 (perfect inequality). The Gini coefficient for countries with highly unequal
income distributions typically lies between 0.50 and 0.70, while for countries with relatively
equal distributions, it is between 0.20 and 0.35.

Figure 2 Estimating of the Gini Coefficient

A Gini coefficient of 1 means that all the income went to a single person and no one else got
anything. In contrast, the Gini coefficient of 0 indicates minimum inequality, which means that
the income is equally shared in society. The lower the Gini coefficient, the lower, is the

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inequality. Unless specified otherwise, Gini income inequality refers to disposable income or
consumption and thus already reflects any redistribution through taxes and transfers. A
diagrammatic representation of the values of the Gini coefficient can be seen in Fig. 14.5.

Fig. 14.5: Gini Coefficient of Inequality

The Gini coefficient is among a class of measures that satisfy four highly desirable properties:
anonymity, scale independence, population independence and transfer principles.

The anonymity principle means that our measure of inequality should not depend on who has
the higher income; e.g., it should not depend on whether we believe the rich or the poor to be
good or bad people.

The scale independence principle ensures that inequality measures should not depend on the
size of the economy or income measurement, as it focuses on the dispersion of income rather
than its magnitude. Population independence also prevents inequality measures from being
based on the number of income recipients. The transfer principle states that transferring income
from a richer person to a poorer person result in a more equal income distribution. The
coefficient of variation (CV) and Gini coefficient are also used in income and wealth
distribution studies.

(d.) The Palma Ratio: The Palma ratio is the ratio of the richest 10% of the population's share
of GDP to the poorest 40%. It indicates inequality. In societies with lower inequality, it's less
than 1, while in high inequality, it can reach 7. The Palma ratio was proposed by Alex Cobham
and Andy Sumner in 2013 and is now reported by income distribution databases and national
statistics offices.

2. Functional Distribution of Income


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Functional income distribution is a measure that explains the share of total national income
each factor of production (land, labour, and capital) receives. It compares the percentage of
labour received as a whole with the percentages of total income distributed in rent, interest, and
profit. The theory assumes supply and demand curves determine unit prices, and when
multiplied by quantities employed, the total payment to each factor is obtained.

Fig.14.6: Functional Income Distribution

Fig. 14.6 provides a simple illustration of the traditional theory of functional income
distribution. We assume that there are only two factors of production: capital, which is a fixed
(given) factor and labour, which is the only variable factor. Under competitive market
assumptions, the demand for labour will be determined by labour's marginal product (i.e.,
additional workers will be hired up to the point where the value of their marginal product equals
their real wage) this demand for labour will be a declining function marginal product, this
demand labour will be a declining function of the members employed. Such a negatively sloped
labour demand curve te shown by line DL in Fig. 14.6. With a traditional, neoclassical, upward-
sloping labour supply curve Sy, the equilibrium wage will be equal to We and the equilibrium
level of employment will be Ly Total national output national income) will be represented by
the area ORELE. This national income will be distributed in two shares:

OWeEle going to workers in the form of wages, and were remaining as capitalist profits (the
return to owners of capital). Hence, in a competitive market economy with constant-returns-
to-scale production functions factor prices are determined by factor supply and demand curves,
and factor shares always combine to exhaust the total national product.

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Income is distributed by function - labourers are paid wages, owners of land receive rents, and
capitalists obtain profits. It is a neat and logical theory in that every factor gets paid only by
what it contributes to national output, no more and no less.

Unfortunately, the relevance of the functional theory is greatly diminished by its failure to take
into account the important role and influence of non-market forces such as power in
determining these factor prices for example, the role of collective bargaining between
employers and trade unions in the setting of modern-sector wage rates, and the power of
monopolists and wealthy landowners to manipulate prices on capital, land, and output to their
advantage

2. Discuss the situation of absolute poverty in the late 20th century in the world

The United Nations defines absolute poverty as a condition characterized by severe deprivation
of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter,
education, and information.
In the late 20th century, the world witnessed significant changes in the situation of absolute
poverty. The proportion of the world’s population living in extreme poverty declined from
about three-quarters in 1820 to one-fifth by the late 20th century. This decline, although not
uniform throughout the period, represents a substantial reduction in global poverty.
Absolute poverty was particularly widespread in sub-Saharan Africa and South Asia. In 1990,
an estimated 51% of the population in sub-Saharan Africa and 44% of the population in South
Asia lived in extreme poverty.
According to estimates, extreme poverty across the globe fell from 76% in 1820 to 10% by
2018, which is the lowest level ever achieved. The pace of reduction varied over time, with a
slightly faster decline observed in the first half of the 20th century. These figures indicate a
remarkable achievement in combating extreme poverty.
It’s important to note that this progress was not evenly distributed across all regions and
countries
Several factors contributed to absolute poverty in the late 20th century. These included:

Economic stagnation: Many developing countries experienced slow or even negative


economic growth in the late 20th century. This made it difficult for people to lift themselves
out of poverty.

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Political instability: Many developing countries also experienced political instability and
conflict in the late 20th century. This disrupted economic activity and made it difficult for
people to access basic services.
Natural disasters: Natural disasters such as droughts, floods, and earthquakes also contributed
to absolute poverty in the late 20th century. These disasters destroyed crops, homes, and
infrastructure, making it difficult for people to survive.
However, challenges remain, and poverty continues to persist in various parts of the world.

3. Outline the range of major policy options for a developing country to alter its size
distribution of national income
a) Altering the Functional Distribution of Income through Relative Factor Prices

The traditional economic approach to reducing poverty is to alter the functional distribution of
labour, arguing that institutional constraints and faulty government policies lead to higher
relative prices of labour in the formal, modern, urban sector. This is often attributed to trade
unions raising minimum wages to artificially high levels, even in the face of widespread
unemployment. Measures designed to reduce labour relative to capital, such as market-
determined wages or public wage subsidies, cause employers to substitute labour for capital in
their production activities, increasing employment and incomes for the poor. However, this can
also reduce the rate of modern-sector enlargement growth, harming the poor. Some scholars
and practitioners, particularly from the developing world, argue that the impact of minimum
wages on poverty is more nuanced, particularly when income sharing among the poor is
considered. Correcting these prices would not only increase productivity and efficiency but
also reduce inequality by providing more wage-paying jobs for unemployed or underemployed
unskilled and semiskilled workers and lower the artificially high incomes of capital owners.

b) Modifying the Size Distribution through Increasing Assets of the Poor

The unequal distribution of personal incomes in most developing countries is due to the
unequal and highly concentrated patterns of asset ownership. 20% of the population often
receives over 50% of the national income, as they own and control over 90% of the productive
and financial resources, including physical capital, land, financial capital, and human capital
in the form of education and health. Correcting factor prices is not sufficient to reduce income
inequalities or eliminate widespread poverty where physical and financial asset ownership and
education are highly concentrated. To reduce poverty and inequality, policymakers should

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focus on reducing concentrated control of assets, unequal distribution of power, and unequal
access to educational and income-earning opportunities. Land reform, for example, can be a
classic case of income redistribution policies for the rural poor. Dynamic re-distribution
policies, such as facilitating the transfer of annual savings and investments to low-income
groups, can also be pursued. Public policy should promote wider access to educational
opportunities to increase income-earning potential for more people. Policymakers need a strong
knowledge base to understand and utilize the knowledge of the poor about their conditions of
poverty.

c) Progressive Income and Wealth Taxes

National policies aiming to improve living standards for the bottom 40% must secure financial
resources to transform paper plans into program realities. Direct and progressive taxation of
income and wealth is the major source of development finance. Direct progressive income
taxes focus on personal and corporate incomes, with the rich paying a progressively larger
percentage of their total income in taxes than the poor. Wealth taxes typically involve personal
and corporate property taxes or progressive inheritance taxes, primarily affecting upper-income
groups. However, in many developing countries, the gap between progressive tax structures
and actual income groups can be substantial.

d) Direct Transfer Payments and the Public Provision of Goods and Services

Tax-financed public consumption goods and services are crucial for eradicating poverty.
Examples include public health projects, school lunches, and clean water and electricity. Direct
money transfers, subsidized food programs, and government policies to keep essential food
prices low are additional forms of public consumption subsidies. However, these methods need
careful design to avoid being unduly dependent on the poor, diverting productive individuals
from alternative economic activities, and being limited by resentment from the non-poor.
Workfare programs, such as the Bangladesh Food for Work Program and the Maharashtra
Employment Guarantee Scheme in India, can be more effective than welfare or direct handouts
when criteria are met. These programs discourage non-poor participation, conserve resources,
and maintain political sustainability. Agricultural development policies are essential for
poverty reduction, as a large fraction of the poor are located in rural areas. Targeted poverty
programs can increase the capabilities and human and social capital of the poor, such as helping
them develop microenterprises. Conditional cash transfer (CCT) programs can also be used to
achieve higher incomes and improve education, health, and nutrition among the poor.

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4. Why is the reduction of poverty and inequality essential for economic


development?

Reducing poverty and inequality is essential for economic development for several reasons.
Here are some of them:
1. Economic growth: Poverty and inequality can hinder economic growth by limiting
access to education, healthcare, and other basic needs. Reducing poverty and inequality
can help create a more skilled workforce, increase productivity, and stimulate economic
growth.
2. Social stability: High levels of poverty and inequality can lead to social unrest, political
instability, and conflict. Reducing poverty and inequality can help promote social
stability and reduce the risk of conflict.
3. Human development: Poverty and inequality can hurt human development by limiting
access to education, healthcare, and other basic needs. Reducing poverty and inequality
can help improve human development outcomes such as life expectancy, literacy rates,
and access to healthcare.
4. Sustainable development: Poverty and inequality can hurt the environment by
increasing pressure on natural resources. Reducing poverty and inequality can help
promote sustainable development by reducing the demand for natural resources
5. Enhanced productivity: Reducing poverty and inequality can lead to increased
productivity by providing individuals with access to education, healthcare, and other
resources. When people have the opportunity to develop their skills and capabilities,
they can contribute more effectively to the economy.
6. Reduced social costs: Poverty and inequality can impose significant social costs on
society, such as increased crime rates, higher healthcare expenses, and reduced social
cohesion. By reducing poverty and inequality, societies can alleviate these costs and
create a more harmonious environment.
7. Promotion of social mobility: Poverty and inequality can hinder social mobility,
making it difficult for individuals to improve their socioeconomic status. By reducing
poverty and inequality, societies can promote social mobility and provide equal
opportunities for all individuals.
8. Fostering innovation: Reducing poverty and inequality can foster innovation by
ensuring that individuals from all socioeconomic backgrounds have access to resources

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and opportunities. When a diverse range of perspectives and talents are included in the
innovation process, it can lead to more creative solutions and economic growth.

There are several things that governments can do to reduce poverty and inequality. These
include:

• Investing in education and healthcare. This can help to create a more skilled and
healthier workforce, which can lead to higher productivity and economic growth.
• Providing social safety nets. This can help to protect people from the shocks of poverty,
such as illness or job loss.
• Promoting inclusive growth. This means ensuring that all people, regardless of their
income or background, have the opportunity to participate in and benefit from economic
growth.
• Reducing poverty and inequality is not only morally important, but it is also essential
for economic development. When people have more opportunities and a better standard
of living, the entire economy benefits.

Here are some specific examples of how reducing poverty and inequality can lead to economic
development:

• Increased investment: When people have more money to save, they are more likely to
invest in businesses or start their businesses. This can lead to job creation and economic
growth.
• Improved productivity: When people have access to education and healthcare, they are
more likely to be healthy and productive workers. This can lead to higher economic
output and growth.
• Reduced crime and social unrest: Poverty and inequality can lead to crime and social
unrest. Reducing poverty and inequality can help to create a more stable and peaceful
society, which is essential for economic growth.

Overall, reducing poverty and inequality is essential for economic development because it can
lead to increased investment, improved productivity, and reduced crime and social unrest.

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5. Kuznet’s inverted U hypothesis discusses the merits and limitations of this


hypothesis for contemporary developing countries

Simon Kuznets suggested that in the early stages of economic growth, the distribution of
income will tend to worsen; only at later stages will it improve. This observation came to be
characterised by the "inverted-U" Kuznets curve because a longitudinal (time-series) plot of
changes in the distribution of income as measured, for example, by the Gini coefficient, seemed
when per capita GNI expanded, to trace out an inverted U-shaped curve in some of the cases
Kuznets studied, as illustrated in Fig below.

Explanations as to why inequality might worsen during the early stages of economic growth
before eventually improving are numerous. They almost always relate to the nature of structural
change. Early growth may, by the Lewis model, be concentrated in the modern industrial sector,
where employment is limited but wages and productivity are high.

The Kuznets curve can be generated by a steady process of modern-sector enlargement growth
as a country develops from a traditional to a modern economy or, returns to education may first
rise as the emerging modern sector demands skills, and then may fall as the supply of educated
workers increases and the supply of unskilled workers falls. Kuznets did not specify the
mechanism by which his inverted-U hypothesis was supposed to occur, it could in principle be
consistent with a sequential process of economic development.

Some development economists would argue that the Kuznets sequence of increasing and then
declining inequality is inevitable.

However, there are now enough case studies and specific examples of countries such as Taiwan,
South Korea, Costa Rica, and Sri Lanka to demonstrate that higher income levels can be

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accompanied by falling and not rising inequality. It all depends on the nature of the
development process.

Here are some merits and limitations of Kuznet’s inverted U-hypothesis:

Merits:

• Empirical evidence: Kuznets provided evidence supporting his hypothesis by


calculating Kuznets’ ratios, which showed that developing countries tend to have a
higher degree of inequality compared to rich developed countries.
• Conceptual framework: The inverted U-hypothesis provides a conceptual framework
for understanding the relationship between economic growth and income inequality. It
suggests that income inequality may follow a specific pattern during different stages of
economic development.
• Empirical evidence: Kuznets provided evidence supporting his hypothesis by
calculating Kuznets’ ratios, which showed that developing countries tend to have a
higher degree of inequality compared to rich developed countries.
• Conceptual framework: The inverted U-hypothesis provides a conceptual framework
for understanding the relationship between economic growth and income inequality. It
suggests that income inequality may follow a specific pattern during different stages of
economic development.
• Historical significance: Kuznets’ inverted U-hypothesis has had a significant impact
on the field of economics and has influenced subsequent research on income inequality

Limitations:

• Data limitations: Kuznets’ original study relied on cross-sectional data from both
developed and developing countries. Due to the non-availability of time series data for
underdeveloped countries transitioning to developed stages, the analysis was based on
a snapshot of different countries at different income levels.
• Mechanism explanation: One limitation of the inverted U-hypothesis is that it does
not specify the mechanism by which the U-shape curve occurs. The validity of this
hypothesis is not justified in terms of explaining the underlying causes or factors
contributing to changes in income inequality

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• Data limitations: Kuznets’ original study relied on cross-sectional data from both
developed and developing countries. Due to the non-availability of time series data for
underdeveloped countries transitioning to developed stages, the analysis was based on
a snapshot of different countries at different income levels.
• Mechanism explanation: One limitation of the inverted U-hypothesis is that it does
not specify the mechanism by which the U-shape curve occurs. The validity of this
hypothesis is not justified in terms of explaining the underlying causes or factors
contributing to changes in income inequality.
• Contemporary relevance: Critics argue that Kuznets’ inverted U-hypothesis may not
fully capture the complexities of income inequality in contemporary developing
countries. Factors such as globalization, technological advancements, and institutional
factors may influence income distribution patterns in ways that deviate from the
original hypothesis

6. Ethnic minorities, indigenous population and poverty

Ethnic minorities and indigenous populations are often disproportionately affected by poverty.
This is due to several factors, including:

Discrimination: Ethnic minorities and indigenous populations often face discrimination in


employment, education, and housing. This can make it difficult for them to find good jobs and
earn a decent living.

Lack of access to resources and services: Ethnic minorities and indigenous populations often
live in remote areas with limited access to resources and services such as education, healthcare,
and clean water. This can make it difficult for them to improve their lives.

Historical marginalization and oppression: Ethnic minorities and indigenous populations


have often been marginalized and oppressed by dominant groups. This can have a lasting
impact on their economic and social well-being.

According to a 2022 report by the United Nations Development Programme (UNDP), "ethnic
minorities and indigenous peoples are more likely to live in poverty, experience lower levels
of education and health, and be more vulnerable to conflict and violence."

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The UNDP report also found that "ethnic minorities and indigenous peoples are
disproportionately affected by climate change." Climate change is disrupting traditional
livelihoods and increasing the risk of natural disasters, which can have a devastating impact on
poor and marginalized communities.

Several things can be done to address the issue of poverty among ethnic minorities and
indigenous populations. These include:

Addressing discrimination: Governments and other stakeholders should work to address


discrimination against ethnic minorities and indigenous populations in all areas of life. This
includes enacting and enforcing anti-discrimination laws and promoting diversity and inclusion
in the workplace, education system, and society as a whole.

Expanding access to resources and services: Governments and other stakeholders should
work to expand access to resources and services for ethnic minorities and indigenous
populations. This includes investing in education, healthcare, and infrastructure in remote
areas.

Empowering ethnic minorities and indigenous populations: Governments and other


stakeholders should work to empower ethnic minorities and indigenous populations to
participate in decision-making processes that affect their lives. This includes supporting
traditional institutions and ensuring that ethnic minorities and indigenous populations have a
voice in the development of policies and programs.

It is important to note that there is no one-size-fits-all approach to addressing poverty among


ethnic minorities and indigenous populations. The best approach will vary depending on the
specific context. However, the principles of anti-discrimination, access to resources and
services, and empowerment are essential to any successful strategy.

7. Explain the Thomas Piketty’s income inequality theory

Thomas Piketty's book Capital in the Twenty-first Century (2014) explores the history of
income and wealth distribution across three centuries and over 20 countries. Piketty argues that
unbridled capitalism promotes global income inequalities, creating an inegalitarian spiral when
capital returns outpace economic growth. Economic inequalities reached their highest in the
1800s due to stagnant wages and profit distribution.

What is capital

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Piketty's definition of capital is expansive, referring to all shares of stock, houses, and cash
assets owned by people. Wealth is more unequally distributed than income, making it difficult
to divide society into those who own things and those who work for a living. In the United
States, 5 per cent of households own a majority of wealth, while 40% have negative wealth due
to debts.

The structure of capital

In the 18th century, capital consisted mainly of government bonds and agricultural land but
was replaced by buildings, business capital, and financial investment in the 21st century. The
value of agricultural land collapsed, while housing value skyrocketed. National wealth consists
of private and public wealth, with Britain and France owning almost as much as they owe, and
private wealth being larger than public wealth since the 18th century.

The fall of capital/income ratio in the 20th century

The capital/income ratio in 20th-century Europe was partly due to the physical destruction
caused by World Wars II, lower saving rates, decline in foreign ownership, and low asset prices
due to post-war capital regulation. The rate of return on capital (r) is about 5% on average at
all times, and if r is less than 5%, the wealth of the already wealthy will grow faster than the
economy as a whole. Piketty's theory suggests that the wealth-owners' wealth-to-labour income
ratio is larger than the overall GDP growth rate, leading to wealthier individuals. This pattern
is marked in old-world countries and an uneven pattern in the contemporary United States.

Global wealth inequality

Global wealth inequality is exacerbated by the high return on investment for the super-rich,
who have access to financial advisors, risk-taking, and patience. Since the 1980s, global wealth
has increased faster than income, with large fortunes growing more rapidly than smaller ones.

Progressive taxation

Progressive taxation has helped reduce inequality levels since the Belle Epoque period.
Governments often exempt capital from progressive income taxes to attract businesses. While
some forms of capital tax exist, they are less progressive than labour income taxes. Assets with
the highest profit are not taxed. Britain and the US led in progressive taxation after WWII, but
tax rates fell short of France and Germany in the 1980s.

A global tax on capital

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A global tax on capital could help address rising inequalities by filling gaps in the current tax
system and redistributing progress more egalitarianly. Calculating a 15% tax on private wealth
would yield almost a year's national income, enough to pay off Europe's public debt in five
years. Piketty's plans have been popular in academia but have not been implemented by
politicians.

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