Among the most worrisome structural changes facing us today is the revival of in equality nearly everywhere since the 1980s. It is hard to envision solutions to other major prob lems such as immigration and climate change if we cannot both reduce in equality and establish a standard of justice acceptable to a ma
jority of the world’s people.
Let us begin by looking at a simple indicator, the share of the top decile (that is, the top 10 percent) of the income distribution in vari ous places since 1980.
If perfect social equality existed, the top decile’s share would be exactly 10 percent. If perfect in equality prevailed, it would be 100 percent. In real ity it falls somewhere between these two extremes, but the exact figure varies widely in time and space. Over the past few de cades we find that the top decile’s share has risen almost everywhere. Take, for example, India, the United States, Rus sia, China, and Eu rope. The share of the top decile in each of these five regions stood at around 25–35 percent in 1980 but by 2018 had risen to between 35 and 55 percent (Fig. I.3). How much higher can it go? Could it rise to 55 or even
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—+1 75 percent over the next few de cades? Note, too, that there is considerable vari
ation in the magnitude of the increase from region to region, even at compa
rable levels of development. The top decile’s share has risen much more rap
idly in the United States than in Eu rope and much more in India than in China.
When we look more closely at the data, we find that the increase in in
equality has come at the expense of the bottom 50 percent of the distribution, whose share of total income stood at about 20–25 percent in 1980 in all five regions but had fallen to 15–20 percent in 2018 (and, indeed, as low as 10 percent in the United States, which is particularly worrisome).5
5. For the purposes of Fig. I.3 (and in the remainder of the book unless other wise specified), Eu rope is defined as the Eu ro pean Union plus allied countries such as Switzerland and Norway, with a total population of 540 million, roughly 420 mil
lion of whom live in Western Eu rope, 120 million in Eastern Eu rope, and 520 million fig. I.3. The rise of in equality around the world, 1980–2018
Interpretation: The share of the top decile (the 10 percent of highest earners) in total na
tional income ranged from 26 to 34 percent in diff er ent parts of the world and from 34 to 56 percent in 2018. In equality increased everywhere, but the size of the increase varied sharply from country to country at all levels of development. For example, it was greater in the United States than in Eu rope (enlarged Eu ro pean Union, 540 million inhabit
ants) and greater in India than in China. Sources and series: piketty.pse.ens.fr/ideology.
20%
25%
30%
35%
40%
45%
50%
55%
60%
1980 1985 1990 1995 2000 2005 2010 2015
Top decile share of total income
India United States Russia China Europe
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0—
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If we take a longer view, we find that the five major regions of the world represented in Fig. I.3 enjoyed a relatively egalitarian phase between 1950 and 1980 before entering a phase of rising in equality since then. The egalitarian phase was marked by diff er ent po liti cal regimes in diff er ent regions: commu
nist regimes in China and Rus sia and social democratic regimes in Eu rope and to a certain extent in the United States and India. We will be looking much more closely at the differences among these vari ous po liti cal regimes in what follows, but for now we can say that all favored some degree of socioeconomic equality (which does not mean that other forms of in equality can be ignored).
If we now expand our view to include other parts of the world, we see that inequalities were even greater elsewhere (Fig. I.4). For instance, the top decile claimed 54 percent of total income in sub Saharan Africa (and as much as 65 percent in South Africa), 56 percent in Brazil, and 64 percent in the Middle East, which stands out as the world’s most inegalitarian region in 2018 (almost on a par with South Africa). There, the bottom 50 percent of the distribution earns less than 10 percent of total income.6 The causes of in equality vary widely from region to region. For instance, the historical legacy of racial and colonial discrimination and slavery weighs heavi ly in Brazil and South Africa as well as in the United States. In the Middle East more “modern” factors are at play: pe
troleum wealth and the financial assets into which it has been converted are concentrated in very few hands thanks to the workings of global markets and sophisticated legal systems. South Africa, Brazil, and the Middle East stand at the frontier of modern in equality, with top decile shares of 55–65 percent. De
spite deficiencies in the available historical data, moreover, it appears that in
equality in these regions has always been high: they never experienced a rela
tively egalitarian “social democratic” phase (much less a communist one).
To sum up, in equality has increased in nearly every region of the world since 1980, except in those countries that have always been highly inegalitarian. In a sense, what is happening is that regions that enjoyed a phase of relative equality
in the Eu ro pean Union as such, including the United Kingdom. Rus sia, Ukraine, and Belarus are not included. If attention is focused on Western Eu rope alone, the difference from the United States is even more marked. See Fig. 12.9.
6. The estimates for the Middle East (and other regions) should be considered as lower bounds, given that income amassed in tax havens cannot be accurately ac
counted for. For alternative estimates, see Chap. 13. The Middle East is defined here as the region extending from Egypt to Iran and Turkey to the Arabian Penin
sula, with a population of roughly 420 million.
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beit with large variations from country to country.