E11: Inequality and Opportunity in America

That's a great path.

Thank you.

Let's

dive into the U.S. landscape.

So I want to talk about economic inequality.

Can you really sketch what economic inequality looks like in the U.S. today, and in particular, comparing to other times in history? And what are the drivers of inequality today?

I would say in general, as time passed, inequality grew larger across the world.

Very, very long ago, inequality was relatively low because we didn't have these very complex societies where we could accumulate large amounts of wealth.

And of course, as progress made people richer, some people benefited more than others.

And that gave rise to economic inequality.

And I think it's really key to observe that these things, progress and inequality, often move hand in hand.

And so they're really just the flip side of the same coin.

In the United States, of course, the country from the very early beginning had massive amounts of inequality, a large part of its population being enslaved.

first across the country, then in the South until the Civil War.

And that went hand in hand with economic inequality as well.

There were some really rich planters who owned a lot of land and there were poor immigrants who over time climbed up the ladder, often very successfully, as the research of some of my mentors and colleagues has shown.

And really inequality tended to be on the rise, except for very distinct periods where inequality fell.

And those usually coincide with a war or epidemics.

This is a hypothesis borrowed from Walter Scheidel, who says that inequality rarely, if ever, declines without these forces, without forces of revolution, violence.

or war and we can see a similar pattern in the united states where after world war ii we see a decline in inequality and then around the 1980s that picks up again so that gives rise to the famous u-shaped pattern in inequality and that of course is mediated by various institutions like how we tax people what kind of redistribution we allow for what institutions we invest in, including public schooling and free higher education to the extent that it exists, healthcare and so on.

So it's, of course, interesting how much inequality has always been a feature of America, given the land of opportunity story that America tells itself.

But of course, you also mentioned opportunity.

Talk us through some of the opportunities historically and in the moment that have counterbalanced these inequalities.

Yeah, so one of the key pieces that the government has decided to implement really democratize opportunity is it's a system of public education.

And in that it's been a real pioneer globally.