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But where does ideology come from? At any given moment a society’s ideology may seem immutable, but Piketty argues that history is full of “ruptures” that create “switch points,” when the actions of a few people can cause a lasting change in a society’s trajectory.

He describes four broad inequality regimes

First are “ternary” societies divided into functional classes — clergy, nobility and everyone else

Second are “ownership” societies, in which it’s not who you are that matters but what you have legal title to

Then come the social democracies that emerged in the 20th century, which granted considerable power and privilege to workers, ranging from union representation to government-provided social benefits

Finally, there’s the current era of “hypercapitalism,” which is sort of an ownership society on steroids.

ether Piketty is a reliable guide to such a large territory. His book combines history, sociology, political analysis and economic data for dozens of societies. Is he really enough of a polymath to pull that off?

I was struck, for example, by his extensive discussion of the evolution of slavery and serfdom, which made no mention of the classic work of Evsey Domar of M.I.T., who argued that the more or less simultaneous rise of serfdom in Russia and slavery in the New World were driven by the opening of new land, which made labor scarce and would have led to rising wages in the absence of coercion

This happens to be a topic about which I thought I knew something; how many other topics are missing crucial pieces of the literature?

Eventually, however, Piketty comes down to the meat of the book: his explanation of what caused the recent surge in inequality and what can be done about it.

For Piketty, rising inequality is at root a political phenomenon. The social-democratic framework that made Western societies relatively equal for a couple of generations after World War II, he argues, was dismantled, not out of necessity, but because of the rise of a “neo-proprietarian” ideology

Indeed, this is a view shared by many, though not all, economists. These days, attributing inequality mainly to the ineluctable forces of technology and globalization is out of fashion, and there is much more emphasis on factors like the decline of unions, which has a lot to do with political decisions.

Piketty places much of the blame on center-left parties, which, as he notes, increasingly represent highly educated voters. These more and more elitist parties, he argues, lost interest in policies that helped the disadvantaged, and hence forfeited their support.

his clear implication is that social democracy can be revived by refocusing on populist economic policies, and winning back the working class.

most political scientists would disagree. In the United States, at least, they stress the importance of race and social issues in driving the white working class away from Democrats, and doubt that a renewed focus on equality would bring those voters back

in the long run, “when pay setters set their own pay, there’s no limit,” unless “confiscatory tax rates” are imposed.

suggests that traditional liberal government policies on spending, taxation and regulation will fail to diminish inequality.

Conservative readers will find that Piketty’s book disputes the view that the free market, liberated from the distorting effects of government intervention, “distributes,” as Milton Friedman famously put it, “the fruits of economic progress among all people.

Piketty proposes instead that the rise in inequality reflects markets working precisely as they should: “This has nothing to do with a market imperfection: the more perfect the capital market, the higher” the rate of return on capital is in comparison to the rate of growth of the economy. The higher this ratio is, the greater inequality is.

we are in the presence of one of the watershed books in economic thinking.”

There are a number of key arguments in Piketty’s book.

One is that the six-decade period of growing equality in western nations – starting roughly with the onset of World War I and extending into the early 1970s – was unique and highly unlikely to be repeated. That period, Piketty suggests, represented an exception to the more deeply rooted pattern of growing inequality.

According to Piketty, those halcyon six decades were the result of two world wars and the Great Depression. The owners of capital – those at the top of the pyramid of wealth and income – absorbed a series of devastating blows. These included the loss of credibility and authority as markets crashed; physical destruction of capital throughout Europe in both World War I and World War II; the raising of tax rates, especially on high incomes, to finance the wars; high rates of inflation that eroded the assets of creditors; the nationalization of major industries in both England and France;

The six decades between 1914 and 1973 stand out from the past and future, according to Piketty, because the rate of economic growth exceeded the after-tax rate of return on capital. Since then, the rate of growth of the economy has declined, while the return on capital is rising to its pre-World War I levels.

“If the rate of return on capital remains permanently above the rate of growth of the economy – this is Piketty’s key inequality relationship,” Milanovic writes in his review, it “generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal — which indeed is what we have witnessed in the past 30 years.”

The Piketty diagnosis helps explain the recent drop in the share of national income going to labor (see Figure 2) and a parallel increase in the share going to capital.

Piketty’s analysis also sheds light on the worldwide growth in the number of the unemployed. The International Labor Organization, an agency of the United Nations, reported recently that the number of unemployed grew by 5 million from 2012 to 2013, reaching nearly 202 million by the end of last year. It is projected to grow to 215 million by 2018.

Piketty’s wealth tax solution runs directly counter to the principles of contemporary American conservatives who advocate antithetical public policies: cutting top rates and eliminating the estate tax.

Piketty’s analysis articulates what many people on the Democratic left feel intuitively, that a domestic tax, spending and regulatory agenda is ineffective in the face of the power of globalized capital to grind down wages and benefits.

Rogoff views evidence of growing inequality presented by Piketty and others as “persuasive” and he proposes a number of alternative, smaller-scale remedies to control disproportionate wealth accumulation. He suggests a shift to a “relatively flat consumption tax, with a large deductible for progressivity.”

“absent aggressive policy intervention, the Western world appears to be headed toward a plutocratic dystopia characterized by wealth inequality approaching that of ancien régime France.”

Piketty’s proposed global tax would set rates of 0.1 to 0.5 percent on fortunes of less than 1 million euros ($1.37 million); 1 percent on assets of 1 to 5 million euros ($1.37 million to $6.87 million); 2 percent on holdings of 5 to 10 million euros ($6.87 million to $13.7 million); and a sliding scale ultimately reaching 10 percent on fortunes of “several hundred million or several billion euros.”

Baker wrote that “a big part of the appeal is that it allows people to say capitalism is awful but there is nothing that we can do about it.”

Why, Rogoff asks, should we “try to move to an improbable global wealth tax when alternatives are available that are growth friendly, raise significant revenue, and can be made progressive through a very high exemption”?

Rogoff cites a series of suggestions developed by Jeffrey Frankel, a professor at the Kennedy School at Harvard. These include “the elimination of payroll taxes for low-income workers, a cut in deductions for high-income workers, and higher inheritance taxes.”

In other words, centrists like Rogoff and Crook – in addition to liberals determined to assault bastions of privilege — are beginning to take proposals to restrain the growing concentration of wealth seriously.

Both the shift of attention to wealth and the seriousness with which a proposal to constrain the accumulation of wealth is being taken represent a major change in the contemporary debate over inequality. Few Americans appear to begrudge the multimillion dollar annual compensation of entrepreneurial executives like Steve Jobs or Bill Gates. But inherited and unearned wealth does not command the same legitimacy.

In fact, the emergence of what Piketty calls “patrimonial capitalism” — concentrated wealth and political power passed on from generation to generation in a class-based social order — runs directly counter to the longstanding American commitment to equality of opportunity. Piketty has laid the intellectual groundwork for a challenge to a social and political order based on socioeconomic ranking by wealth stratification.

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.

Much of this treatment is meted out through the power of the campus party scene, the boozy, hook-up-happy world of Greek life. This “party pathway,” the authors write, is “a main artery through the university,”

Such party-pathway students aren’t particularly motivated academically, but because they have well-off parents and clear-enough career goals they don’t necessarily need to be, and because they don’t require much financial aid they’re crucial to the university’s bottom line.

The party pathway’s influence, though, is potentially devastating for less well-heeled students.

The party pathway is designed for the daughters of both the 1 percent and of what Piketty calls the “petits rentiers” — families that are affluent but not exorbitantly rich.

“Paying for the Party” is also a story about the socioeconomic consequences of cultural permissiveness — about what happens, who wins and who loses, when a youth culture in which the only (official) moral rule is consent meets a corporate-academic university establishment that has deliberately retreated from any moralistic, disciplinary role.

The losers are students ill equipped for the experiments in youthful dissipation that are now accepted as every well-educated millennial’s natural birthright.

The winners, meanwhile, are living proof of how a certain kind of libertinism can be not only an expression of class privilege, but even a weapon of class warfare.

To understand why this matters, you have to know a little bit about the many tribes within the world of economics.

There are the academic economists who study the forces shaping the modern economy. Their work is rigorous but often obscure. Some of them end up in important policy jobs (See: Bernanke, B.) or write books for a mass audience (Piketty, T.), but many labor in the halls of academia for decades writing carefully vetted articles for academic journals that are rigorous as can be but are read by, to a first approximation, no one.

Then there are the economists in what can broadly be called the business forecasting community. They wear nicer suits than the academics, and are better at offering a glib, confident analysis of the latest jobs numbers delivered on CNBC or in front of a room full of executives who are their clients. They work for ratings firms like S.&P., forecasting firms like Macroeconomic Advisers and the economics research departments of all the big banks.

they are trying to do the practical work of explaining to clients — companies trying to forecast future demand, investors trying to allocate assets — how the economy is likely to evolve. They’re not really driven by ideology, or by models that are rigorous enough in their theoretical underpinnings to pass academic peer review. Rather, their success or failure hinges on whether they’re successful at giving those clients an accurate picture of where the economy is heading.

worries that income inequality is a factor behind subpar economic growth over the last five years (and really the last 15 years) is going from an idiosyncratic argument made mainly by left-of center economists to something that even the tribe of business forecasters needs to wrestle with.

Because the affluent tend to save more of what they earn rather than spend it, as more and more of the nation’s income goes to people at the top income brackets, there isn’t enough demand for goods and services to maintain strong growth, and attempts to bridge that gap with debt feed a boom-bust cycle of crises, the report argues. High inequality can feed on itself, as the wealthy use their resources to influence the political system toward policies that help maintain that advantage, like low tax rates on high incomes and low estate taxes, and underinvestment in education and infrastructur

The report itself does not break any major new analytical or empirical ground. It spends many pages summarizing the findings of various academic and government economists who have studied inequality and its discontents, and stops short of recommending any radical policy changes

This idea seemed to be disproved in the 20th century, by the emergence of a prosperous, non-revolutionary working class. But Piketty argues that those developments were transitory, made possible mostly by the massive destruction of inherited capital during the long era of world war.

Absent another such disruption, he expects a world in which the returns to capital permanently outstrip  —  as they have recently  —  the returns to labor, and inequality rises far beyond even today’s levels

Combine this trend with slowing growth, and we face a future like the 19th-century past, in which vast inherited fortunes bestride the landscape while the middle class fractures, weakens, shrinks.

Even as the winner-take-all economy has enriched those at the very top, their tax burden has lightened. Tolerance for high executive compensation has increased, even as the legal powers of unions have been weakened and an intellectual case against them has been relentlessly advanced by plutocrat-financed think tanks. In the 1950s, the marginal income tax rate for those at the top of the distribution soared above 90 percent, a figure that today makes even Democrats flinch. Meanwhile, of the 400 richest taxpayers in 2009, 6 paid no federal income tax at all, and 27 paid 10 percent or less. None paid more than 35 percent.

Educational attainment, which created the American middle class, is no longer rising. The super-elite lavishes unlimited resources on its children, while public schools are starved of funding. This is the new Serrata. An elite education is increasingly available only to those already at the top.

America’s Serrata also takes a more explicit form: the tilting of the economic rules in favor of those at the top.

The first is to channel the state’s scarce resources in their own direction

Exhibit A is the bipartisan, $700 billion rescue of Wall Street in 2008. Exhibit B is the crony recovery. The economists Emmanuel Saez and Thomas Piketty found that 93 percent of the income gains from the 2009-10 recovery went to the top 1 percent of taxpayers. The top 0.01 percent captured 37 percent of these additional earnings, gaining an average of $4.2 million per household.

The second manifestation of crony capitalism is more direct: the tax perks, trade protections and government subsidies that companies and sectors secure for themselves.

Between 1991 and 2010, roughly 28 percent of Americans in the General Social Survey — a continuing survey of opinions and attitudes in the United States, conducted by the University of Chicago — agreed that the federal government should “improve the standard of living of all poor Americans.” (Forty-five percent were neutral, and 27 percent agreed that “it is not the government’s responsibility, and that each person should take care of himself.”) This was a sharp decline — 5 percentage points on average — in support for redistribution relative to those surveyed between 1975 and 1990.

Since the 1970s, income inequality in the United States has increased at a historic rate. In 1970, the richest 1 percent of Americans enjoyed 9 percent of total national pre-tax income. In 2011, by contrast, that share had risen to 19.8 percent. And this large increase in inequality has not been softened by more progressive tax policy. Tax rates on the top 1 percent of taxpayers have fallen over the same period.

Democrats and Republicans agree that America faces a long-run fiscal imbalance that in the coming decades will most likely require cutting social services, raising taxes or both — policies that directly influence income distribution. Who will bear the brunt of this rebalancing will depend on whether the government uses tax and other policies to counteract rising income inequality with greater redistribution.

The survey has also revealed that the share of respondents who believe that the rich should pay proportionally more of their income in taxes than the poor is substantially lower now than in 1987.

Those who saw our tutorial became 20 percent less likely to agree that government could be trusted at least “some of the time” — a surprisingly large effect. By emphasizing to respondents the level and growth of income inequality over the last several decades, our tutorial appears to have simultaneously undercut their trust in government’s ability to fix the problem. After all, if the government let things get this bad, respondents might logically conclude that it is also unable to do much to fix the situation.

confidence in government has dropped over the past 30 years. From 1976 to 1989, 23 percent of respondents, on average, reported having “hardly any” confidence in Congress. Since 1990, that number has risen by more than 11 percentage points. The survey has revealed an almost identical erosion of confidence in the executive branch of the federal government.

On one hand, liberals can take heart in the news that Americans are deeply troubled about the current level of income inequality. On the other hand, conservatives may be glad to hear that despite this concern, Americans have a healthy skepticism that government can be trusted to do much about it.

Proponents of greater redistribution can probably save their breath pointing out that inequality is a problem. Instead, they face what seems to be a much more difficult task: convincing them that their government is up to the task of addressing it.

One explanation for why so many come to that conclusion in the first place has to do with the widening of the gulf between America’s coasts and the region in between them

Cities that can entice well-educated professionals are booming, even as “flyover” communities have largely seen good-paying factory work automated or shipped overseas, replaced to a large extent with insecure jobs: Walmart greeters, independent-contractor truck drivers, and the like.

a college degree has become the true mark of individual success in America—the sort of white-picket-fence fantasy that drives people well into their elder years to head back to school

the white working class that emerged in the 19th century—stitched together from long-combative European ethnic groups—strived to set themselves apart from African Americans, Chinese, and other vilified “indispensable enemies,” and build, by contrast (at least in their view), a sense of workingman pride.

this last election was a reminder that white male resentment of “nasty” women and “uppity” racial and other minorities remains strong.

That said, many Americans with more stable, better-paid jobs have blind spots of their own. For all of their professed open-mindedness in other areas, millions of the well-educated and well-off who live in or near big cities tend to endorse the notion, explicitly or implicitly, that education determines a person’s value

white voters from hard-hit rural areas and hollowed-out industrial towns have turned away from a Democratic Party that has offered them little in the way of hope and inspiration and much in the way of disdain and blame.

such a fervent belief in the transformative power of education also implies that a lack of it amounts to personal failure—being a “stupid” person

As much as both liberals and conservatives have touted education as a means of attaining social mobility, economic trends suggest that this strategy has limits, especially in its ability to do anything about the country’s rapidly growing inequalities

Well into the 21st century, two-thirds of Americans age 25 and over do not have a bachelor’s degree. The labor market has become more polarized, as highly paid jobs for workers with middling levels of education and skill dwindle away.

even some workers I spoke to—all former union members—said they felt that people without a good education did not deserve to make a good living.

The rules of meritocracy that these blue-collar workers say they admire barely apply to the very top levels of the economy. Groups of elite workers—professionals, managers, financial workers, tenured professors—continue to wall themselves off from competition. They still organize collectively, through lobbying, credentialing, licensing, and other strategies. But fewer ordinary workers have the same ability to do so

What has emerged in the new economy, then, is a stunted meritocracy: meritocracy for you, but not for me

One of the few things he could really depend on was his church. He volunteered on their Sunday-school bus, leading the kids in singing songs. “It helps to be around young people,” he said. For many of the jobless workers I interviewed, religion and tradition provided a sense of community and a feeling that their lives had purpose.

However exaggerated by stereotypes, the urbane, urban values of the well-educated professional class, with its postmodern cultural relativism and its rejection of old dogmas, are not attractive alternatives to what the working class has long relied on as a source of solace.

In the absence of other sources of meaning, Americans are left with meritocracy, a game of status and success, along with the often ruthless competition it engenders. And the consequence of a perspective of self-reliance—Americans, compared to people in other countries, hold a particularly strong belief that people succeed through their own hard work—is a sense that those who fail are somehow inferior

The concept of grace comes from the Christian teaching that everyone, not just the deserving, is saved by God’s grace. Grace in the broader sense that I (an agnostic) am using, however, can be both secular and religious. In the simplest terms, it is about refusing to divide the world into camps of deserving and undeserving, as those on both the right and left are wont to do

It rejects an obsession with excusing nothing, with measuring and judging the worth of people based on everything from a spotty résumé to an offensive comment.

Unlike an egalitarian viewpoint focused on measuring and leveling inequalities, grace rejects categories of right and wrong, just and unjust, and offers neither retribution nor restitution, but forgiveness.

With a perspective of grace, it becomes clearer that America, the wealthiest of nations, possesses enough prosperity to provide adequately for all. It becomes easier to part with one’s hard-won treasure in order to pull others up, even if those being helped seem “undeserving”—a label that today serves as a justification for opposing the sharing of wealth on the grounds that it is a greedy plea from the resentful, idle, and envious.

ignorance shouldn’t be considered an irremediable sin. Yet many of the liberal, affluent, and college-educated too often reduce the beliefs of a significant segment of the population to a mash of evil and delusion

From gripes about the backwardness and boredom of small-town America to jokes about “rednecks” and “white trash” that are still acceptable to say in polite company, it’s no wonder that the white working class believes that others look down on them. That’s not to say their situation is worse than that of the black and Latino working classes—it’s to say that where exactly they fit in the hierarchy of oppression is a question that leads nowhere, given how much all these groups have struggled in recent decades.

While there are no simple explanations for the desperation and anger visible in many predominantly white working-class communities, perhaps the most astute and original diagnosis came from the rabbi and activist Michael Lerner, who, in assessing Donald Trump’s victory, looked from a broader vantage point than most. Underneath the populist ire, he wrote, was a suffering “rooted in the hidden injuries of class and in the spiritual crisis that the global competitive marketplace generates.”

That cuts right to it. The modern economy privileges the well-educated and highly-skilled, while giving them an excuse to denigrate the people at the bottom (both white and nonwhite) as lazy, untalented, uneducated, and unsophisticated.

many well-off Americans from across the political spectrum scorn the white working class in particular for holding onto religious superstitions and politically incorrect views, and pity them for working lousy jobs at dollar stores and fast-food restaurants that the better-off rarely set foot in

This system of categorizing Americans—the logical extension of life in what can be called an extreme meritocracy—can be pernicious: The culture holds up those who succeed as examples, however anecdotal, that everyone can make it in America. Meanwhile, those who fail attract disdain and indifference from the better-off, their low status all the more painful because it is regarded as deserved.

the shame of low status afflicts not just the unemployed, but also the underemployed. Their days are no longer filled with the dignified, if exhausting, work of making real things.

For less educated workers (of all races) who have struggled for months or years to get another job, failure is a source of deep shame and a reason for self-blame. Without the right markers of merit—a diploma, marketable skills, a good job—they are “scrubs” who don’t deserve romantic partners, “takers” living parasitically off the government, “losers” who won’t amount to anything

Even those who consider themselves lucky to have jobs can feel a sense of despair, seeing how poorly they stand relative to others, or how much their communities have unraveled, or how dim their children’s future seems to be: Research shows that people judge how well they’re doing through constant comparisons, and by these personal metrics they are hurting, whatever the national unemployment rate may be.

The impacts of technological change take their time appearing. They also vary hugely from industry to industry. Although in many simple economic models technology pairs neatly with capital and labour to produce output, in practice technological changes do not affect all workers the same way. Some find that their skills are complementary to new technologies. Others find themselves out of work.

The case for a highly disruptive period of economic growth is made by Erik Brynjolfsson and Andrew McAfee, professors at MIT, in “The Second Machine Age”, a book to be published later this month. Like the first great era of industrialisation, they argue, it should deliver enormous benefits—but not without a period of disorienting and uncomfortable change

Their argument rests on an underappreciated aspect of the exponential growth in chip processing speed, memory capacity and other computer metrics: that the amount of progress computers will make in the next few years is always equal to the progress they have made since the very beginning. Mr Brynjolfsson and Mr McAfee reckon that the main bottleneck on innovation is the time it takes society to sort through the many combinations and permutations of new technologies and business models.

A startling progression of inventions seems to bear their thesis out. Ten years ago technologically minded economists pointed to driving cars in traffic as the sort of human accomplishment that computers were highly unlikely to master. Now Google cars are rolling round California driver-free

Even after computers beat grandmasters at chess (once thought highly unlikely), nobody thought they could take on people at free-form games played in natural language. Then Watson, a pattern-recognising supercomputer developed by IBM, bested the best human competitors in America’s popular and syntactically tricksy general-knowledge quiz show “Jeopardy!” Versions of Watson are being marketed to firms

Text-mining programs will displace professional jobs in legal services. Biopsies will be analysed more efficiently by image-processing software than lab technicians. Accountants may follow travel agents and tellers into the unemployment line as tax software improves. Machines are already turning basic sports results and financial data into good-enough news stories.

A taxi driver will be a rarity in many places by the 2030s or 2040s. That sounds like bad news for journalists who rely on that most reliable source of local knowledge and prejudice—but will there be many journalists left to care? Will there be airline pilots? Or traffic cops? Or soldiers?

Tyler Cowen, an economist at George Mason University and a much-read blogger, writes in his most recent book, “Average is Over”, that rich economies seem to be bifurcating into a small group of workers with skills highly complementary with machine intelligence, for whom he has high hopes, and the rest, for whom not so much.

the second machine age will make such trial and error easier. It will be shockingly easy to launch a startup, bring a new product to market and sell to billions of global consumers (see article). Those who create or invest in blockbuster ideas may earn unprecedented returns as a result.

Thomas Piketty, an economist at the Paris School of Economics, argues along similar lines that America may be pioneering a hyper-unequal economic model in which a top 1% of capital-owners and “supermanagers” grab a growing share of national income and accumulate an increasing concentration of national wealth

The rise of the middle-class—a 20th-century innovation—was a hugely important political and social development across the world. The squeezing out of that class could generate a more antagonistic, unstable and potentially dangerous politics.

The current doldrum in wages may, like that of the early industrial era, be a temporary matter, with the good times about to roll (see chart 3). These jobs may look distinctly different from those they replace. Just as past mechanisation freed, or forced, workers into jobs requiring more cognitive dexterity, leaps in machine intelligence could create space for people to specialise in more emotive occupations, as yet unsuited to machines: a world of artists and therapists, love counsellors and yoga instructors.

though growth in areas of the economy that are not easily automated provides jobs, it does not necessarily help real wages. Mr Summers points out that prices of things-made-of-widgets have fallen remarkably in past decades; America’s Bureau of Labour Statistics reckons that today you could get the equivalent of an early 1980s television for a twentieth of its then price,

owever, prices of things not made of widgets, most notably college education and health care, have shot up

As innovation continues, automation may bring down costs in some of those stubborn areas as well, though those dominated by scarcity—such as houses in desirable places—are likely to resist the trend, as may those where the state keeps market forces at bay. But if innovation does make health care or higher education cheaper, it will probably be at the cost of more jobs, and give rise to yet more concentration of income.

Adaptation to past waves of progress rested on political and policy responses. The most obvious are the massive improvements in educational attainment brought on first by the institution of universal secondary education and then by the rise of university attendance. Policies aimed at similar gains would now seem to be in order. But as Mr Cowen has pointed out, the gains of the 19th and 20th centuries will be hard to duplicate.

Boosting the skills and earning power of the children of 19th-century farmers and labourers took little more than offering schools where they could learn to read, write and do algebra. Pushing a large proportion of college graduates to complete graduate work successfully will be harder and more expensive. Perhaps cheap and innovative online education will indeed make new attainment possible. But as Mr Cowen notes, such programmes may tend to deliver big gains only for the most conscientious students.

Everyone should be able to benefit from productivity gains—in that, Keynes was united with his successors. His worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity

However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages.

The Social Progress Index is a brainchild of Michael E. Porter, the eminent Harvard business professor who earlier helped develop the Global Competitiveness Report. Porter is a Republican whose work, until now, has focused on economic metrics.“This is kind of a journey for me,” Porter told me. He said that he became increasingly aware that social factors support economic growth: tax policy and regulations affect economic prospects, but so do schooling, health and a society’s inclusiveness.

Porter and a team of experts spent two years developing this index, based on a vast amount of data reflecting suicide, property rights, school attendance, attitudes toward immigrants and minorities, opportunity for women, religious freedom, nutrition, electrification and much more.

Many who back proposed Republican cuts in Medicaid, food stamps and public services believe that such trims would boost America’s competitiveness. Looking at this report, it seems that the opposite is true.

Canada came in seventh, the best among the nations in the G-7. Germany is 12th, Britain 13th and Japan 14th.

Over all, the United States’ economy outperformed France’s between 1975 and 2006. But 99 percent of the French population actually enjoyed more gains in that period than 99 percent of the American population. Exclude the top 1 percent, and the average French citizen did better than the average American. This lack of shared prosperity and opportunity has stunted our social progress.

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.