Thursday, December 22, 2011

Martin Wolf on inequality

Martin Wolf takes on inequality in today's FT. He points out that a lot of the increase in inequality in the UK is down to an increase in the dispersion of male earnings, and that

some – perhaps a great deal – of the ultra-high incomes at the top are almost certainly the fruit of rent extraction facilitated by a breakdown in the control exercised by principals – outside investors – over their agents – corporate executives and financiers. Huge rewards then are both unjust and inefficient.

This is the key point - any pretence that inequality might be the price to be paid for economic dynamism cannot survive the events of the past three years. Hopefully this realization can spread beyond the pages of the FT fast.