The Skeptics Society & Skeptic magazine

Once there were princes and peasants and very few between. The extremes of wealth and poverty are still with us, but that shouldn’t blind us to the fact our societies have been utterly transformed for the better over the past century. As Daniel Waldenström makes clear in this authoritative account of wealth accumulation and inequality in the modern west, we are today both significantly richer and more equal.

Using cutting-edge research and new, sometimes surprising, data, Waldenström shows that what stands out since the late 1800s is a massive rise in the size of the middle class and its share of society’s total wealth. Unfettered capitalism, it seems, doesn’t have to lead to boundless inequality. The key to progress was political and institutional change that enabled citizens to become educated, better paid, and to amass wealth through housing and pension savings. Waldenström asks how we can consolidate these gains while encouraging the creation of new capital. The answer, he argues, is to pursue tax and social policies that raise the wealth of people in the bottom and middle rather than cutting wealth of entrepreneurs at the top.

Daniel Waldenström is Professor of Economics at the Research Institute of Industrial Economics (IFN) in Stockholm, Sweden, where he directs the Taxation and Society research program. Previously, he taught at Uppsala University, the Paris School of Economics, and UCLA. His research concerns economic inequality, fiscal policy, and economic history. His new book is Richer and Richer and More Equal: A New History of Wealth in the West

Shermer and Waldenström discuss:

• What kind of science is economics & how do economists determine causality?
• Why would one’s political leanings influence cause-and-effect economic theories?
• Chris Rock: difference between being rich and being wealthy. What is wealth?
• Thomas Piketty, Capital in the 21^st Century (2014)
• Income inequality vs. wealth inequality
• Household wealth: homes and pensions
• Wealth disparity throughout history and what changed in the late 20^th century
• Other sources of wealth: offshore monies
• Public-Sector wealth
• Inheritance and wealth inequality
• Effects of wars and taxes on wealth accumulation
• Tax policies and their effects
• The Laffer Curve
• Tariffs and why all economists think they’re a bad idea
• Policies that increase both income and wealth of regular people (p. 201 quote):
  • Discard Zero-Sum game thinking
  • Support Individual Homeownership
  • Advocate for Pension Saving Securitization
  • Revisit Labor Income Taxation
  • Tax Capital Income, Not Wealth
• If he were advising the head of a poor nation, what policies would he recommend to make it a wealthy nation?

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