But now all that's gone, thanks to bought-and-paid-for congressmen, and we're well on our way back to something that looks much more like the kind of extremely hierarchical society that existed in the Belle Epoque and the Gilded Age.
Piketty also makes the counterintuitive point that the very size of inherited fortunes today is so great that it practically makes them invisible: "Wealth is so concentrated that a large segment of our society is virtually unaware of its own upper echelons. If you have conversations with people who are not political-economists, they have no idea what this kind of hyper-wealth means in America. They think that having a million dollars makes you wealthy. They think that having a salary of several hundred thousand dollars makes you wealthy. And while it's of course true that this is a vastly privileged condition compared to that of most people, the sheer size of the very biggest fortunes is so far outside and removed from our daily experience that it remains invisible to the vast majority of us: You're never going to meet these people or hear anything about exactly how they dominate and control, and most of us are never going to have any sense of even what it is they control. Most of us have no idea just how far removed the commanding heights are from you and me.
The US now has a much more unequal distribution of income than other advanced countries
And much of this difference is the result of government actions in these other countries, vs. government inaction in ours. To wit:
Most European countries don't actually have higher taxes on very high incomes. But they do have higher taxes overall (which is where the vast majority of tax revenues come from), which are used to pay for a lot of programs that aid those of very modest means. And so it is that our counterparts in other advanced countries enjoy universal healthcare, as we here in the USA stumble our way towards something which only approximates that, but at comparatively great cost to most of us.
The Europeans also have, for another example, a lot of income support for young parents. In other words, they have lots of redistribution -- which is still a dirty word in US politics, but is in fact essential for having a decent society, according to Krugman and many others.
Krugman continues: The average American is richer than the average Frenchman or other European, but that's because we work significantly more hours daily, weekly and annually. On the other hand, to be in the bottom fifth of income receivers in France is a far, far better thing than to be in the bottom fifth in the United States. Why? Because of the redistributive government policies just mentioned! It's not that wages are especially high at the bottom in France; being low-income in France is better than in the US mostly because of the government programs, which make an enormous difference in the lives of the low-income beneficiaries. The level of inequality of market income, i.e. the size of their hourly wage, is simply not that different among advanced countries. In other words, the level of inequality of disposable income and benefits, once the government has gotten through taxing, spending, and redistributing, is much, much less extreme in most other advanced countries than it is in the US.
Why is redistribution such a bad word in the USA?
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