I agree with those on the left that a lot of income and wealth is random.
But to me that does not mean that it can be changed.
I for one am not sure what caused the increase in inequality though I have heard many of the theories, none seems to work. I think it might be multiple things like:
- Growth of finance (maybe Vanguard and the EMH will turn this around).
- Investors and management have discovered that better people raise profits and have started bidding good people's compensation up.
- Bigger markets for sports and entertainment. They are now worldwide markets.
- Anti-trust causes in sports. Monopoly sports leagues paid athletes much less, even with more teams and lower seat prices?
- Software network effects.
- Growth in healthcare and providers influencing regulation.
- Taxes were very high in the 1950 & 60s and that might have had some effect, but the rich did not pay much more of their income in taxes then than they do now. So I do not think that was so important. If taxation had a big effect it could mostly be a a measurement effect in that I bet a lot more income was hidden then.
