Inequality of wealth is a bone of contention with the wealth held by the poorest half of the world’s population matching the wealth held by the world’s 85 richest people and with the heirs of Walmart founder Sam Walton having as much wealth – $69 billion – as the bottom 40% of Americans.
The much discussed book ‘Capital in the 21st Century’ by French economist Thomas Piketty takes the view that protracted periods of peace and stability produce inequality because investment returns outpace GDP growth.
However, Larry Summers, former Secretary to the US Treasury and President of Harvard, says: “Piketty sees these developments (inequality) as reflecting iron laws of capitalism. I think they have more to do with particular policy choices that can be reversed: whether it is the erosion of labour bargaining rights or the excessive protection of intellectual property, or the insufficient regulation of the financial sector, or failures in corporate governance, or the lack of progressive taxation. I believe these problems are amenable to policy and cultural change and are not inevitable.”