Excerpts from Thomas Piketty’s CAPITAL

May 25, 2015

“All the historical data at our disposal today indicates that it was not until the second half—or even the final third—of the nineteenth century that a significant rise in the purchasing power of wages occurred. From the first to the sixth decade of the nineteenth century, workers’ wages stagnated at very low levels—close or even inferior to the levels of the eighteenth and previous centuries. This long phase of wage stagnation, which we observe in Britain as well as France, stands out all the more because economic growth was accelerating in this period. The capital share of national income—industrial profits, land rents, and building rents … increased considerably in both countries in the first half of the nineteenth century… The data we have assembled nevertheless reveal no structural decrease in inequality prior to WW1. What we see in the period 1870-1914 is at best a stabilization of inequality at an extremely high level, and in certain respects an endless inegalitarian spiral, marked in particular by increasing concentration of wealth. It’s quite difficult to say where this trajectory would have led without the major economic and political shocks initiated by the war. With the aid of historical analysis and a little perspective, we can now see those shocks as the only forces since the Industrial Revolution powerful enough to reduce inequality.” —Thomas Piketty, Caplital, Introduction pg. 7

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