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Putnam concludes that during the Progressive Era (1890-c. 1910) “the institutional, social, and cultural seeds” of what he labels the “Great Convergence” were sown. Out of those seeds emerged more than six decades (up until the late 1960s) of “imperfect but steady upward progress toward greater economic equality, more cooperation in the public square, a stronger social fabric, and a growing culture of solidarity,”

“then suddenly and unexpectedly . . . the Great Convergence was reversed in a dramatic U-turn, to be followed by a half century of Great Divergence.”

the USA “entered the Sixties in an increasingly ‘we’ mode—with communes, shared values, and accelerating efforts toward racial and economic equality—and we left the Sixties in an increasingly ‘I’ mode—focused on ‘rights,’ culture wars, and what would be almost instantly dubbed the ‘Me Decade’ of the 1970s.”

Each Upswing chapter from 2 through 5 is devoted to a separate field--economics, politics, society, or culture. And each deals with the trends from the 1890s, when the Progressive Age began, up to the present era.

the “we” of the Great Convergence was often meant for white males more than for all Americans.

Although Putnam discusses many historical explanations for the transformation beginning in the late 1960s, like the backlash against the gains of African Americans and women, he is wise enough to realize that major historical occurrences, like the transformation considered here, almost always have innumerable causes.

It was then, in reaction to a “Gilded Age” similar to our own, that the turn toward a more cooperative, less self-centered society began

describes the Progressivism of the that time as a diverse movement “to limit the socially destructive effects of morally unhindered capitalism, to extract from those [capitalist] markets the tasks they had demonstrably bungled

“Communitarian sentiment,” he declares, “was at the heart of the Progressive mood. Teddy Roosevelt, Jane Addams, and other progressives were explicit in rejecting ‘individualism,’

The 1920s, with its three consecutive Republican presidents, slowed down the growth of communitarianism.

with Franklin Roosevelt’s New Deal and World War II, it renewed itself until it began in the late 1960s to reverse itself

some of the accomplishments of the Progressive Era: “the secret ballot; the direct primary system; the popular election of senators; . . . women’s suffrage; new forms of municipal administration; the federal income tax; the Federal Reserve System; protective labor laws; the minimum wage; antitrust statutes; protected public lands and resources; food and drug regulation; sanitation infrastructure; public utilities;

a vast proliferation of civic and voluntary societies; new advocacy organizations such as labor unions, the ACLU, and the NAACP; the widespread provision of free public high schools; and even the spread of public parks, libraries, and playgrounds all owe their origins to the efforts of a diverse array of Progressive reformers.”

“Progressivism . . . was not confined to the Progressive Party but affected in a striking way all the major and minor parties and the whole tone of political life. . . . It was a rather widespread and remarkably good-natured effort of the greater part of society to achieve some not very clearly specified self-reformation.”

To make his point that Progressivism was primarily a “bottom up” movement involving countless citizen reformers, he provides brief biographical sketches on some of them such as Frances Perkins (b. 1880), Paul Harris (b. 1868), Ida B. Wells (b. 1862), and Tom Johnson (b. 1854).

Generalizing about the Progressive movement, Putnam writes it “was, first and foremost, a moral awakening.”

Aided in part by the religious thinking of the Social Gospel thinkers, “Americans from all walks of life began to repudiate the self-centered, hyper-individualist creed of the Gilded Age.”

The movement was also pragmatic, not ideological, for “true innovation requires openness to experimentation that is not premised upon ideological beliefs.

Putnam believes that Progressives came to realize that “to succeed they would have to compromise—to find a way to put private property, personal liberty, and economic growth on more equal footing with communitarian ideals

These lessons regarding moral urgency, pragmatism, and compromise are ones that Putnam thinks modern reformers need to apply.

he does not yet “see a truly nonpartisan movement” bringing “issue-specific efforts together in a compelling citizen-driven call for large-scale reform.” Nor does he see “a broader vision for the future of America.”

we should, Putnam insists, learn from what they did wrong. Most significantly, they failed to make the “we” they stressed inclusive enough, paying insufficient attention to gender and racial discrimination.

“The question we face today is not whether we can or should turn back the tide of history, but whether we can resurrect the earlier communitarian virtues in a way that does not reverse the progress we’ve made in terms of individual liberties. Both values are American, and we require a balance and integration of both.”

the leading voices were, like Mr. Sanders, native-born and middle-class advocates of reform within the Democratic and Republican parties, whose bosses they often criticized.

Mr. Sanders sounds like these Gilded Age socialists in part because the issues of their time were similar to ours — immigration, environmental deterioration, declining well-being and growing inequality in a period of rapid technological and economic change

The Gilded Age socialists admitted what their opponents often did not: Americans did not all share common values.

Mr. Sanders’s actual similarity to 19th-century socialists makes him seem unthreatening, even avuncular. He is infinitely closer to William Dean Howells, the 19th-to 20th-century novelist who for a while proclaimed himself a socialist, than to Joseph Stalin.

Howells’s political evolution makes socialism’s American roots clear. Howells wrote campaign biographies for Abraham Lincoln and Rutherford B. Hayes, and remained close friends with John Hay, Theodore Roosevelt’s secretary of state. Even when Howells called himself a socialist in the late 1880s, he continued to vote Republican, although he thought the party was corrupted.

Howells regarded socialism as “not a positive but a comparative thing … Every citizen of a civilized State is a socialist.”

If anyone believed “that the postal department, the public schools, the mental hospitals, the almshouse are good things; and that when a railroad management has muddled away in hopeless ruin the money of all who trusted it, a Railroad Receiver is a good thing,” then that person embraced socialism.

Like Howells, Bernie Sanders embraces a series of modest changes. Mr. Sanders often rightly seems bewildered that free public college education — once the norm in California — and the universal health care of Canada and Europe can seem to be radical solutions to American problems.

Radicals — anarchists, Communists and other Marxists — have at critical moments influenced America’s development, often for the better, and most of them have despised American socialists as insufficiently revolutionary, ideologically incoherent, hopelessly sentimental and utterly enmeshed in existing society.

They were right — which was why American socialists have been far more influential than their radical critics. Socialists appealed to sensibility, values and justice, not ideologies. They put their hope in the benevolence and fairness of the mass of Americans —­ what Howells called the sufficiency of the common — rather than in elites.

It produces economic distortions as high IQ types get jobs as “money butlers.” (Chuck Collins, the author of “The Wealth Hoarders,” estimates that at least 90,000 people are employed in what he calls the “wealth defense industry.”)

Today the educated are losing their faith in upward mobility.

do the founders of those new fortunes “ever wonder how it will all play out, 100 years hence?” Because somewhere another beneficiary will choke down his gilded spoon, and tell himself he likes it.

Contemporary billionaires appear to understand civics and civilians as impediments to their progress, necessary victims of the externalities of their companies’ growth, sad artefacts of the civilisation they will leave behind in their inexorable colonisation of the next dimension

Zuckerberg had to go all the way back to Augustus Caesar for a role model, and his admiration for the emperor borders on obsession. He models his haircut on Augustus; his wife joked that three people went on their honeymoon to Rome: Mark, Augustus and herself; he named his second daughter August; and he used to end Facebook meetings by proclaiming “Domination!”

as chronicled by Peter Turchin in End Times, his book on elite excess and what it portends, today there are far more centimillionaires and billionaires than there were in the gilded age, and they have collectively accumulated a much larger proportion of the world’s wealth

In 1983, there were 66,000 households worth at least $10m in the US. By 2019, that number had increased in terms adjusted for inflation to 693,000

Back in the industrial age, the rate of total elite wealth accumulation was capped by the limits of the material world. They could only build so many railroads, steel mills and oilwells at a time. Virtual commodities such as likes, views, crypto and derivatives can be replicated exponentially.

Digital businesses depend on mineral slavery in Africa, dump toxic waste in China, facilitate the undermining of democracy across the globe and spread destabilising disinformation for profit – all from the sociopathic remove afforded by remote administration.

on an individual basis today’s tech billionaires are not any wealthier than their early 20th-century counterparts. Adjusted for inflation, John Rockefeller’s fortune of $336bn and Andrew Carnegie’s $309bn exceed Musk’s $231bn, Bezos’s $165bn and Gates’s $114bn.

Zuckerberg told the New Yorker “through a really harsh approach, he established two hundred years of world peace”, finally acknowledging “that didn’t come for free, and he had to do certain things”. It’s that sort of top down thinking that led Zuckerberg to not only establish an independent oversight board at Facebook, dubbed the “Supreme Court”, but to suggest that it would one day expand its scope to include companies across the industry.

Any new business idea, Thiel says, should be an order of magnitude better than what’s already out there. Don’t compare yourself to everyone else; instead operate one level above the competing masses

Today’s billionaire philanthropists, frequently espousing the philosophy of “effective altruism”, donate to their own organisations, often in the form of their own stock, and make their own decisions about how the money is spent because they are, after all, experts in everything

Their words and actions suggest an approach to life, technology and business that I have come to call “The Mindset” – a belief that with enough money, one can escape the harms created by earning money in that way. It’s a belief that with enough genius and technology, they can rise above the plane of mere mortals and exist on an entirely different level, or planet, altogether.

By combining a distorted interpretation of Nietzsche with a pretty accurate one of Ayn Rand, they end up with a belief that while “God is dead”, the übermensch of the future can use pure reason to rise above traditional religious values and remake the world “in his own interests”

Nietzsche’s language, particularly out of context, provides tech übermensch wannabes with justification for assuming superhuman authority. In his book Zero to One, Thiel directly quotes Nietzsche to argue for the supremacy of the individual: “madness is rare in individuals, but in groups, parties, nations, and ages it is the rule”.

In Thiel’s words: “I no longer believe that freedom and democracy are compatible.”

This distorted image of the übermensch as a godlike creator, pushing confidently towards his clear vision of how things should be, persists as an essential component of The Mindset

In response to the accusation that the US government organised a coup against Evo Morales in Bolivia in order for Tesla to secure lithium there, Musk tweeted: “We will coup whoever we want! Deal with it.”

For Thiel, this requires being what he calls a “definite optimist”. Most entrepreneurs are too process-oriented, making incremental decisions based on how the market responds. They should instead be like Steve Jobs or Elon Musk, pressing on with their singular vision no matter what. The definite optimist doesn’t take feedback into account, but ploughs forward with his new design for a better world.

This is not capitalism, as Yanis Varoufakis explains in his new book Technofeudalism. Capitalists sought to extract value from workers by disconnecting them from the value they created, but they still made stuff. Feudalists seek an entirely passive income by “going meta” on business itself. They are rent-seekers, whose aim is to own the very platform on which other people do the work.

The antics of the tech feudalists make for better science fiction stories than they chart legitimate paths to sustainable futures.

as has happened before with other forms of property, the most politically influential owners of the new property are doing their utmost to increase their profits by creating monopolies

The most valuable intellectual properties are platforms so widely used that everyone else has to use them, too. Think of standard operating systems like Microsoft’s Windows or Google’s Android; Google’s search engine; Amazon’s shopping system; and Facebook’s communication network

Despite an explosion in the number of websites over the last decade, page views are becoming more concentrated. While in 2001, the top 10 websites accounted for 31 percent of all page views in America, by 2010 the top 10 accounted for 75 percent

Amazon is now the first stop for almost a third of all American consumers seeking to buy anything

Google and Facebook are now the first stops for many Americans seeking news — while Internet traffic to much of the nation’s newspapers, network television and other news gathering agencies has fallen well below 50 percent of all traffic.

almost all of the profits go to the platforms’ owners, who have all of the bargaining power

The rate at which new businesses have formed in the United States has slowed markedly since the late 1970s. Big Tech’s sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrants

The law gives 20 years of patent protection to inventions that are “new and useful,” as decided by the Patent and Trademark Office. But the winners are big enough to game the system. They make small improvements warranting new patents, effectively making their intellectual property semipermanent.

They also lay claim to whole terrains of potential innovation including ideas barely on drawing boards and flood the system with so many applications that lone inventors have to wait years.

Big Tech has been almost immune to serious antitrust scrutiny, even though the largest tech companies have more market power than ever. Maybe that’s because they’ve accumulated so much political power.

Economic and political power can’t be separated because dominant corporations gain political influence over how markets are maintained and enforced, which enlarges their economic power further. One of the original goals of antitrust law was to prevent this.

We are now in a new gilded age similar to the first Gilded Age, when the nation’s antitrust laws were enacted. As then, those with great power and resources are making the “free market” function on their behalf. Big Tech — along with the drug, insurance, agriculture and financial giants — dominates both our economy and our politics.

The real question is how government organizes the market, and who has the most influence over its decisions

Yet as long as we remain obsessed by the debate over the relative merits of the “free market” and “government,” we have little hope of seeing what’s occurring and taking the action that’s needed to make our economy work for the many, not the few.

The Black/white ratio of high school completion improved dramatically between the 1940s and the early 1970s, after which it slowed, never reaching parity.

Understanding how and why not only reveals why America is so fractured today, but illuminates the path forward, toward a more perfect union.

In measure after measure, positive change for Black Americans was actually faster in the decades before the civil rights revolution than in the decades after

The life expectancy gap between Black and white Americans narrowed most rapidly between about 1905 and 1947, after which the rate of improvement was much more modest

The racial gap in homeownership steadily narrowed between 1900 and 1970, then stagnated, then reversed

Racial integration in K-12 education at the national level began much earlier than is often believed

It accelerated sharply in the wake of the 1954 Supreme Court decision, Brown v. Board of Education. But this trend leveled off in the early 1970s, followed by a modest trend toward resegregation.

Income by race converged at the greatest rate between 1940 and 1970.

However, as of 2018, Black/white income disparities were almost exactly the same as they were in 1968

Black Americans on the whole have experienced flat or downward mobility in recent decades.

What’s more, after the passage of civil rights legislation, those trends toward racial parity slowed, stopped and even reversed.

Long-run data on national trends in voting by race is patchy, but the South saw a dramatic increase in Black voter registration between 1940 and 1970, followed by decline and stagnation

nearly all of the gains toward equality with white voter turnout occurred between 1952 and 1964, before the Voting Rights Act passed, then almost entirely halted for the rest of the century.

These data reveal a too-slow but unmistakable climb toward racial parity throughout most of the century that begins to flatline around 1970 — a picture quite unlike the hockey stick of historical shorthand.

It was Black Americans’ undaunted faith in the promise of the American “we,” and their willingness to claim their place in it, against all odds, that won them progress between the end of Reconstruction in the 1870s and the end of the civil rights movement in the 1970s. Collectively, these migrants and their children and grandchildren steadily narrowed the Black-white gap over those years.

Some six decades later all of those upward trends reversed, setting the United States on a downward course that has brought us to the multifaceted national crisis in which we find ourselves today, which bears a remarkable resemblance to the Gilded Age

Why was the last third of the 20th century characterized by a marked deceleration of progress, and in some cases even a reversal?

We have two answers to these questions.

Substantial progress toward white support for Black equality was made in the first half of the 20th century

The first is simple and familiar: White backlash

when push came to shove, many white Americans were reluctant to live up to those principles. Although clear majorities supported the 1964 Civil Rights Act, a national poll conducted shortly after its passage showed that 68 percent of Americans wanted moderation in its enforcement. In fact, many felt that the Johnson administration was moving too fast in implementing integration.

Lyndon B. Johnson’s rejection, in 1968, of the Kerner Commission’s recommendations of sweeping reforms to address racial inequality suggested that his fine-tuned political sensitivity had detected a sea change in white attitudes in the year since he — more than any previous president — had led the project of racial redress

as the century turned and the Gilded Age gave way to the Progressive Era, America experienced a remarkable moment of inflection that set the nation on an entirely new trajectory. A diverse group of reformers grabbed the reins of history and set a course toward greater economic equality, political bipartisanship, social cohesion and cultural communitarianism.

But if Black Americans’ advance toward parity with whites in many dimensions had been underway for decades before the Civil Rights revolution, why then, when the dam of legal exclusion finally broke, didn’t those trends accelerate toward full equality?

These interconnected phenomena can be summarized in a single meta-trend that we have come to call the “I-we-I” curve: An inverted U charting America’s gradual climb from self-centeredness to a sense of shared values, followed by a steep descent back into egoism over the next half century

The moment America took its foot off the gas in rectifying racial inequalities largely coincides with the moment America’s “we” decades gave way to the era of “I.”

hopes went unrealized as the whole nation shifted toward a less egalitarian ideal.

A central feature of America’s “I” decades has been a shift away from shared responsibilities toward individual rights and a culture of narcissism.

Contemporary identity politics characterizes an era that could well be described as a “War of the ‘We’s’.” This is a reality that predated the election of Donald Trump, though his presidency threw it into sharp relief.

It is difficult to say which came first — white backlash against racial realignment or the broader shift from “we” to “I.”

the fact that landmark civil rights legislation passed at the very peak of the I-we-I curve suggests that an expanding sense of “we” was a prerequisite for the dismantling of the color line. Without what the historian Bruce Schulman calls the “expansive, universalist vision” that America had been building toward in the preceding decades, it is hard to imagine that such watershed change — so long and so violently resisted — would have been possible.

By the late 1960s, though the work of widening was not nearly complete, America had come closer to an inclusive “we” than ever before. But just as that inclusion began to bear tangible fruit for Black Americans, much of that fruit began to die on the vine.

The lessons of America’s I-we-I century are thus twofold. First, we Americans have gotten ourselves out of a mess remarkably similar to the one we’re in now by rediscovering the spirit of community that has defined our nation from its inception

we” can be defined in more inclusive or exclusive terms. The “we” we were constructing in the first two-thirds of the last century was highly racialized, and thus contained the seeds of its own undoing. Any attempt we may make today to spark a new upswing must aim for a higher summit by being fully inclusive, fully egalitarian and genuinely accommodating of difference. Anything less will fall victim once again to its own internal inconsistencies.

This, it strikes me, is not only a political choice, but a reneging on a historical deal, forged in the colossal upheavals of the Enlightenment, the Industrial Revolution, and revolution in England, the US and Europe.

You can hear the language and logic of this economic dictatorship everywhere. Tony Blair tells us that with an ageing population, a climate crisis, higher debt interest and an economic workforce increasingly constrained in its ability to seek services such as housing and healthcare outside the public sector, we should be ready to not wait for the NHS and use private health providers for minor health matters, and that we should ultimately be “taxing less and spending less”.

The result is a sort of ambient autocracy, where personal choices are increasingly dictated by forces that you had no say in creating and have no means of overthrowing.

The trade-off was that we would lose the traditional supports and solaces of rural values and extended families, but become free from their prejudices and patriarchies, and the associated economic and political exploitations of a hierarchical system that was skewed to landowners, rent seekers and those imbued with authority because of where they were born in that hierarchy.

to choose how to live our lives. “The only freedom which deserves the name,” wrote John Stuart Mill, “is that of pursuing our own good, in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.”

That good is now increasingly limited to those who can afford it – who can purchase the liberty to love, leave and leisure, and the right to indulge in creative work and expression.

The rest are caught in a halfway house between the old and new worlds.

Bereft of the support and proximity of family and community, people are deprived of the social safety net that was supposed to replace it, increasingly having to fork out funds for childcare, subsidising boomeranging single children and elderly parents while paying tax, or fretting about their fates in a cutthroat housing market and a scandalously underfunded care system.

Anything that disturbs this tenuous balance cannot be contemplated, so the shackles to partners, employers and imperfect domestic arrangements grow ever tighter.

I grew up in the old world and saw only its limitations, chafing against it and impatient for some individual autonomy. My mother had four children, working throughout her childbearing years as a school teacher, only able to go back to work because, with each child, a new family member would move in, or move back in, to help. They joined others who lived with us on and off over the years when they needed housing.

My parents were distant but seemed to be broadly content figures, either at work or obscured by a blur of relatives they were constantly entertaining, feeding or cleaning up after in a gaggle of chat, laughter and gossip. The price for that mutual communal facilitation was paid in other ways – a violating lack of privacy and personal space, and a sense that everyone’s lives, in their most private and intimate detail, were the subject of others’ opinions and policing. It was a “gilded cage”, as it is called in Orientalist literature

In hindsight now, and in adulthood and parenthood, having experienced both in the new world, I can see that gilded cages come in many forms

“We are in this position as a country because we assumed that the magic of the marketplace would provide competition and provide world-class communications,” she said. “But history has demonstrated that left to their own devices, companies will gouge the rich, leave out the poor, cherry-pick markets and focus solely on their profits. It isn’t evil, it’s just the way things work.”

The United States has one of the world’s largest pay gaps, with chief executives earning nearly 300 times what the average worker makes, according to some economists’ estimates. That is much higher than the 20-to-1 ratio recommended by Gilded Age magnates like J. Pierpont Morgan and the 20th century management visionary Peter Drucker.

“The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd,” said Mr. Price, who said his main extravagances were snowboarding and picking up the bar bill. He drives a 12-year-old Audi

Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.

Of all the social issues that he felt he was in a position to do something about as a business leader, “that one seemed like a more worthy issue to go after.”

The happiness research behind Mr. Price’s announcement on Monday came from Angus Deaton and Daniel Kahneman, a Nobel Prize-winning psychologist. They found that what they called emotional well-being — defined as “the emotional quality of an individual’s everyday experience, the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant” — rises with income, but only to a point. And that point turns out to be about $75,000 a year.

Of course, money above that level brings pleasures — there’s no denying the delights of a Caribbean cruise or a pair of diamond earrings — but no further gains on the emotional well-being scale.

As Mr. Kahneman has explained it, income above the threshold doesn’t buy happiness, but a lack of money can deprive you of it.

Doris knew nothing about raising children, nor much cared. The witheringly wry, worldly heiress was among the most celebrated women of her day, a six-foot glamour queen hounded by paparazzi, who brushed elbows with every midcentury icon from Jackie Kennedy to Elvis Presley, pronouncing Greta Garbo "boring" and, after dating Errol Flynn, theorizing that bisexual men made the best lovers: "I should know," she declared. "I've done exhausting research on the subject." As a child – and sole inheritor of her father Buck's $100 million fortune – she'd become famous as "the richest little girl in the world." She'd been raised by nannies in a chilly, silent Fifth Avenue mansion, with her parents taking little part in her upbringing; family lore holds that her father, on his deathbed in 1925, told 12-year-old Doris, "Trust no one." Now saddled with her pesky nephew Walker, watching him toss ketchup-covered tampons into her pool, Doris Duke regarded him with pity. He was desperate for love and attention, much like herself as a child. But Doris had her own fabulous life to live, and so she shipped Walker off to boarding school. "We were all too self-centered to be bothered with a problem child," she would later tell her cousin Angier St. George Biddle "Pony" Duke.

His grandmother's will had stipulated that if Walker left no heirs, upon his death his trust would be funneled into the Duke Endowment, a $2.8 billion foundation established by Buck Duke that nourishes, among other institutions, Duke University. The idea repulsed Walker: The very name that had given him such unearned bounty also stood for everything he felt he'd been deprived. "He despised Duke!" says longtime friend Mike Todd. "Duke University, Duke Foundation – everything Duke, he hated."

At school the twins had trouble connecting with classmates, few of whom were allowed over to the Inmans' mansion a second time after gaping at the guns, the explicit art and sometimes an eyeful of Walker, who preferred to be nude. Other kids went to summer camp, but the Inmans went to Abu Dhabi to bid millions at auctions; to Japan, where their father introduced them to friends who were supposedly yakuza; to Fiji, where Dad praised them as they dined on poisonous puffer fish. There were getaways aboard the Devine Decadence, which was docked in New Zealand. One day toward the end of second grade, when their father had yanked them out of school without warning, they told themselves it was for the best.

The past three years have been a struggle for the twins as they've grappled with their past. Before they were able to live with Daisha, they were sent to the Wyoming Behavioral Institute. The twins were suicidal, uncooperative and dangerously underweight. Therapist Jennifer Greenup had never seen such extreme emotional deprivation before. "If even a quarter of what they said happened to them happened, they are severely traumatized children," says Greenup, adding, "Their symptoms are real. Whether it's paranoia, lack of trust or hostility." Eventually the kids were able to move in with Daisha and began bonding, a triumph unto itself. But although they've taken positive steps, Greenup says the scale of their trauma is so great that she can't gauge their progress: "I can't say they're progressing well, because there's nothing to compare it to," she admits.

As for the kids' own plans, Patterson seems to hope for a quiet life. "I hope I don't have to live alone. But I actually don't mind. I'll just sit at Greenfield, fishing by my dad's little tomb, just talking about life," he says. "You can't trust anyone," he adds mournfully, repeating the words he learned from his father, which Walker learned from his aunt Doris, which she learned from her father, Buck Duke.

the financial industry has grown much faster than either the flow of savings it channels or the assets it manages.

Defenders of modern finance like to argue that it does the economy a great service by allocating capital to its most productive uses — but that’s a hard argument to sustain after a decade in which Wall Street’s crowning achievement involved directing hundreds of billions of dollars into subprime mortgages.

Wall Street’s friends also used to claim that the proliferation of complex financial instruments was reducing risk and increasing the system’s stability, so that financial crises were a thing of the past. No, really.

if our supersized financial sector isn’t making us either safer or more productive, what is it doing? One answer is that it’s playing small investors for suckers, causing them to waste huge sums in a vain effort to beat the market.

Another answer is that a lot of money is going to speculative activities that are privately profitable but socially unproductive.

n short, we’re giving huge sums to the financial industry while receiving little or nothing — maybe less than nothing — in return. Mr. Philippon puts the waste at 2 percent of G.D.P.

et even that figure, I’d argue, understates the true cost of our bloated financial industry. For there is a clear correlation between the rise of modern finance and America’s return to Gilded Age levels of inequality.

His work is a challenge both to Marxism and laissez-faire economics, which “both count on pure economic forces for harmony or justice to prevail,” he said.

In 2012 the top 1 percent of American households collected 22.5 percent of the nation’s income, the highest total since 1928. The richest 10 percent of Americans now take a larger slice of the pie than in 1913, at the close of the Gilded Age, owning more than 70 percent of the nation’s wealth. And half of that is owned by the top 1 percent.

he accepts that his work is essentially political, and he is highly critical of the huge management salaries now in vogue, saying that “the idea that you need people making 10 million in compensation to work is pure ideology.”

Inequality by itself is acceptable, he says, to the extent it spurs individual initiative and wealth-generation that, with the aid of progressive taxation and other measures, helps makes everyone in society better off. “I have no problem with inequality as long as it is in the common interest,” he said.

But like the Columbia University economist Joseph E. Stiglitz, he argues that extreme inequality “threatens our democratic institutions.” Democracy is not just one citizen, one vote, but a promise of equal opportunity.

“It’s very difficult to make a democratic system work when you have such extreme inequality” in income, he said, “and such extreme inequality in terms of political influence and the production of knowledge and information. One of the big lessons of the 20th century is that we don’t need 19th-century inequality to grow.”

that’s just where the capitalist world is heading again, he concludes.

He favors a progressive global tax on real wealth (minus debt), with the proceeds not handed to inefficient governments but redistributed to those with less capital.

a close look at the rich list supports the thesis made famous by Thomas Piketty in his book “Capital in the Twenty-First Century” — namely, that we’re on our way toward a society dominated by wealth, much of it inherited, rather than work.

these days a lot of top money managers’ income comes not from investing other people’s money but from returns on their own accumulated wealth

Over time, extreme inequality in income leads to extreme inequality of wealth; indeed, the wealth share of America’s top 0.1 percent is back at Gilded Age levels. This, in turn, means that high incomes increasingly come from investment income, not salaries. And it’s only a matter of time before inheritance becomes the biggest source of great wealth.

why does all of this matter? Basically, it’s about taxes.America has a long tradition of imposing high taxes on big incomes and large fortunes, designed to limit the concentration of economic power as well as raising revenue. These days, however, suggestions that we revive that tradition face angry claims that taxing the rich is destructive and immoral

income growth since the fall of the Berlin Wall has been a “twin peaks” story. Incomes have, of course, soared at the top, as the world’s elite becomes ever richer. But there have also been huge gains for what we might call the global middle — largely consisting of the rising middle classes of China and India.

the bad news: Between these twin peaks — the ever-richer global elite and the rising Chinese middle class — lies what we might call the valley of despond: Incomes have grown slowly, if at all, for people around the 20th percentile of the world income distribution. Who are these people? Basically, the advanced-country working classes.

the travails of workers in rich countries are, in important ways, the flip side of the gains above and below them.

Competition from emerging-economy exports has surely been a factor depressing wages in wealthier nations, although probably not the dominant force.

More important, soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing.

more important still, the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen the valley of despond.

The problem with these conventional leaders, I’d argue, is that they’re afraid to challenge elite priorities, in particular the obsession with budget deficits, for fear of being considered irresponsible

who speaks for those left behind in this twin-peaked world? You might have expected conventional parties of the left to take a populist stance on behalf of their domestic working classes. But mostly what you get instead — from leaders ranging from François Hollande of France to Ed Milliband of Britain to, yes, President Obama — is awkward mumbling.

All of this suggests some uncomfortable historical analogies. Remember, this is the second time we’ve had a global financial crisis followed by a prolonged worldwide slump. Then, as now, any effective response to the crisis was blocked by elite demands for balanced budgets and stable currencies. And the eventual result was to deliver power into the hands of people who were, shall we say, not very nice.

political and opinion leaders need to face up to the reality that our current global setup isn’t working for everyone. It’s great for the elite and has done a lot of good for emerging nations, but that valley of despond is very real. And bad things will happen if we don’t do something about it.

Just as Kuhn was writing this, economics was finally settling into what looked like a scientific paradigm, in which mathematical models built around rational agents trying to maximize something called utility were presumed capable of answering all the questions that needed to be answered

in the 1960s and 1970s. The most famous assertion of the then-reigning hubris of financial economics, Michael Jensen’s “I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis,” was followed a few sentences later by this: Yet, in a manner remarkably similar to that described by Thomas Kuhn in his book, The Structure of Scientific Revolutions, we seem to be entering a stage where widely scattered and as yet incohesive evidence is arising which seems to be inconsistent with the theory.

That evidence has just kept on piling up in finance

On the theoretical side, there seems to be much less consensus than there was 50 years ago about what rational behavior under uncertainty even looks like.

while mainstream academic economists have become more open to alternative approaches and willing to acknowledge gaps in their knowledge (see my interview from a couple weeks ago with Harvard’s John Campbell, or the generally friendly reception among mainstream economists to Thomas Piketty’s jeremiads against mainstream economics in Capital in the Twenty-First Century), they haven’t really changed how they go about their work.