Economic Inequality is a Problem. That Does Not Mean We’re in a New Gilded Age

Too often we jump from the fact of inequality to the supposed illegitimacy of capitalism. That’s too fast.

Earlier this year, Massachusetts senator and Democratic presidential candidate Elizabeth Warren proposed a wealth tax to address economic inequality. Motivated by a study showing that “the top 0.1 percent wealth share has risen from 7 percent in 1978 to 22 percent in 2012,” Warren drew attention to one of the central economic challenges of our time. But while focusing on economic inequality is warranted, we should not lose sight of a basic fact about life in the 21st century: rich or poor, living standards far surpass what could have been imagined by Gilded Age robber barons who summered in their Newport mansions.

Take air-conditioning, unavailable until the 1930s, and even then, unattainable for most. A write-up in Time vividly describes its impact:

As anyone who has ever suffered through a brutal summer can tell you, if it weren’t for [air-conditioning inventor] Carrier’s having made human beings more comfortable, the rates of drunkenness, divorce, brutality and murder would be Lord knows how much higher. Productivity rates would plunge 40 percent over the world; the deep-sea fishing industry would be deep-sixed; Michelangelo’s frescoes in the Sistine Chapel would deteriorate; rare books and manuscripts would fall apart; deep mining for gold, silver and other metals would be impossible; the world’s largest telescope wouldn’t work; many of our children wouldn’t be able to learn; and in Silicon Valley, the computer industry would crash.

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