Why is inequality rising—and will it now fall?by Robert Skidelsky / March 27, 2014 / Leave a comment
Published in April 2014 issue of Prospect Magazine
Over 1,000 people lie down on a San Francisco beach to spell out “TAX THE 1%” ©2011 John Montgomery
The early 19th-century founders of the classical school of economics reasoned that the distribution of a society’s income depended crucially on who owned its productive resources. David Ricardo identified three classes of producer, landlords, capitalists and workers. Each of these classes owned a factor of production—land, capital and labour. With land and capital scarce relative to labour, landlords and capitalists could claim a disproportionate share of the produce that they and the workers jointly produced. Workers’ pay would be forced to subsistence. Classical socialism, as Karl Marx conceived it, was a branch of this tree. Abolish private ownership of land and capital (and the power which this gave) and one would abolish the “rents” to their owners, enabling workers to receive their proper share of production.