Science had a very interesting special section this spring: The Science of Inequality – basically doing a summary and review of issues related to the stuff in Piketty’s book Capital in the Twenty-First Century
The section has a series of very interesting articles on a range of related topics:
- “Inequality in the Long Run” by Piketty and Saez
- “The ancient roots of the 1%” by Pringle
- “Our Egalitarian Eden” by Pennisi
- “Physicists say it’s simple” by Cho
- “Tax man’s gloomy message: the rich will get richer” by Marshall
- “A World of Difference” by Underwood
- “Can Disparities by Deadly?” by Underwood
- “The intergenerational transmission of inequality: Maternal disadvantage and health at birth” by Aizer and Currie
and a bunch of others.
First and last are heavy duty reviews, others are “News and Views” articles, there are a number of others in the section, all worth reading.
The whole section makes for interesting, and somewhat depressing reading.
The basic argument about the role of capital vs earned income and long term structure is fairly robust, the main failure is, I think, the inability of models to deal with external and internal shocks, destructive terms in macroeconomics, and gross stupidity by economic actors leading to negative sum games – which probably suffices to explain the reason why some Roman family does not own the whole Solar System yet through simple application of compound interest.
The analog to some interesting and relatively simple physical systems in the works of Yakovenko and others is quite interesting, and explains the essential features of the long tail of the income distribution at the high end, its robustness and the role of unearned income.
Definitely recommended reading.