Confronting Capitalism

TWO

INCOME INEQUALITY ON THE RISE

Our economy won’t come back unless it comes back fair.

—JOSEPH STIGLITZ, The Price of Inequality

The poverty problem we examined in Chapter 1 is closely related to a wider problem—namely, the growing gap in the share of income going to the rich, the middle class, and the poor. One of the key issues in capitalism is whether it must inevitably lead to great and growing differences in personal income and wealth. Under capitalism, will the poor remain poor and will the rich acquire a growing share of income and wealth?

The grand idea of capitalism is that those with capital will apply it to create more wealth that will lead to more jobs and income for everyone. Not only will the wealthy benefit, but their wealth ...