Sunday, 24 February 2013

Peak inequality?

Don’t forget that most people are stuck with stagnant or falling real wages. Upward mobility for a few hollows out the middle class and causes the social pyramid to become top-heavy. Too many elites relative to the general population (a condition I call ‘elite overproduction’) leads to ever-stiffer rivalry in the upper echelons. And then you get trouble...

...Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020. In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. 
Peter Turchin, thinks he sees a regular cyclical pattern in wealth distribution in the US, with inequality peaking at intervals of roughly a century and periods more evenly distributed well-being* peaking at a similar frequency in the troughs of minimal inequality, leading to reversals every half century or so. If he's right, the US is due to hit peak inequality in around seven years.

*As measured by the following indicators of well-being, economic (the fraction of economic growth that is paid to workers as wages), health (life expectancy and the average height of native-born population), and social optimism (the average age of first marriage).