Paul Krugman Substack
Zucman: Yeah, one area where there is tremendous growth, to be sure, is the wealth of the top billionaires in America. There are lots of ways to look at that. But one way that I find particularly interesting these days is to focus on the really narrow, very, very, top of the distribution, the top 0.0001%. Why? You might say it’s really a tiny number of individuals. That’s about 19 households today. It was four households in 1913. But this is where a lot of the action is taking place today.
Krugman: Okay.
Zucman: And also, if you look at this very narrow slice of the population, you can go back in time to 1850, essentially, because you had a number of rankings of the truly super rich back to the Gilded Age and even before. And so you can take a very long run perspective on the economic weight of the oligarchs. And the numbers are really quite crazy. And the statistic that I find most striking and relevant is the wealth of this group, the top 0.001% wealthiest people in the US. So, first of all, in the early 1980s, this ratio was about 0.3%. So the super-rich owed wealth the equivalent of 0.3% of the total income of all Americans. Today, it’s 10%, it’s 12%. So it has increased by a factor of almost 40. So what it means, essentially, is that if the 19 wealthiest people in the US spent all their wealth, they could buy the equivalent of 10% of the value of all the goods and services that are produced in a given year in the US. And of course, they don’t do that, right? They’re not spending down their wealth like that. But it’s just an illustration of the overwhelming economic power that they have and the power that they have to buy elections, to buy media, to buy influence, to buy competitors. And so that’s really quite striking.
And then what you can do with this type of time series is you can compare today’s situation to the Gilded Age. And in the Gilded Age, the number was 4%, meaning the very top [bracket] owned in wealth the equivalent of 4% of US national income. And so by that metric, this new Gilded Age is characterized by much stronger concentration at the top than the original Gilded Age, with a very fast pace of increase since 2010, and particularly fast over the last couple of years. And so I think it’s a good illustration of just the overwhelming economic and also political power that this tiny elite has acquired in America, which is truly unprecedented.
