Richer and More Equal: A New History of Wealth in the West

by Daniel Waldenström

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.
 
Richer and More Equal is a benchmark account of one of the most profound and encouraging social changes in human history and a blueprint for continued progress.

Genres: Economics, History, Nonfiction

256 pages, Hardcover

First published January 1, 2024

Reviews

[Jonathan Ahlström · Rating 5 out of 5]

Andra boken jag läser som substitut för att läsa NEK. Mer Piketty-bashing! Men jag vill ge den minuspoäng för sitt väldigt tråkiga omslag. Ser ut som en självhjälpsbok

[Anton · Rating 2 out of 5]

En hel del intressant fakta om vår ekonomi men jag köper inte tesen alls. Argumenten och datan presenteras ohederligt och känns inte som om det är applicerbart alls för att blicka framåt. Full recension i avsnitt 45 av Boktokiga.

[Diego · Rating 3 out of 5]

Waldenstrom tries to dismantle what he calls Piketty and Co.'s outdated narrative about the evolution of inequality since the 19th century. He argues that we are today more equal than at any point in the past. However, there are several issues with this argument. For instance, the data he shows, more than disproving Piketty, show the same overall trend, thus enhancing the "outdated" narrative.

One strong point of the book is its policy orientation, something that economic historians often forget. I should say that, in general, the policy recommendations are sound: enact policies that enhance house ownership, promote access to financial instruments, invest in public pensions, opt for capital rather than wealth taxes, etc.

Waldenstrom argues that wealth democratization via pension funds and home ownership produced the great leveling of the 20th century, not wars and taxes. Economic growth, he claims, is the great leveling source. However, he fails to recognize that not all growth episodes achieve equalization, thus making generalizations that do not match empirical research. He claims that education, healthcare, and infrastructure are the real heroes. However, those things require public investment, thus financing tax revenues. In my opinion, this sloppiness in the arguments works against the author's goal in his crusade to promote a new narrative.

It is a good book, but it punches below its weight.

[Marc Sabatier · Rating 4 out of 5]

I would say 3.7. I am friendly to the argument, which is that wealth largely has become democratised over the 20th century, primarily due to homeownership and pension funds. This runs somewhat counter to Piketty, although much of the data points overlap.

I think the problem is a lack of theory or perhaps more parsimonious argument to explain why this is going on. Piketty had the influential r > g, that when rents grow faster than income, then wealth inequality becomes intractable. To my reading, Waldenström engages with some of the exisiting argument, but his book is primarily empirical. That's also great, and one learns a lot, but since a lot of the results are based on a narrow set of cases (US, UK, France and Sweden), and a lot is carried by studies of Swedish wealth history and data, one can't help but speculate on how well the argument travels through time and space.

That being said, the book distinguishes itself in having a very keen eye for policy, and stating what the implications of the empirical results are for existing scholarship (and hence policy-advice), and what the more appropriate policy-recommendations then are.

All in all, a short and efficient book that gets to the point, which definitely is a useful piece on your shelf the next time people uncritically state that wealth inequality has run amok.

[Pablo Paniagua Prieto · Rating 5 out of 5]

This is a great book. It provides ample evidence showing how the world has become richer and more equal in the last century compared to the past. The book is a must-read for everyone interested in serious arguments about wealth inequality. The core findings of the book deeply challenge Piketty's thesis about inequality. It is a timely book to correct the distorted and ideologically laden narrative of wealth inequality during the 20th century.