America to Outstrip France’s Ancien Régime in Inequality by 2030

In the middle of Thomas Piketty’s book on income inequality Capital in the Twenty-First Century we discovered this extraordinary projection that if the United States continued on its present course as a “hypermeritocracy,” that is, over rewarding those who manage our finances and under rewarding most of the rest of us, we will soon surpass the excesses of aristocratic France of the 17th and 18th century in inequality.


In more inegalitarian societies, the top decile [10 percent] claimed as much as 50 percent of national income (with about 2.0 percent going to the top decile). This was true in France and Britain during the Ancien Régime as well as the Belle Époque and is true in the United States today.

Is it possible to imagine societies in which the concentration of income is much greater? Probably not. If, for example the top decile appropriates 90 percent of each year’s output (and the top centile [1 percent] took 50 percent just for itself, as in the case of wealth), a revolution will likely occur, unless some peculiarly effective repressive apparatus exists to keep it from happening. When it comes to the ownership of capital, such a high degree of concentration is already a source of powerful political tensions, which are often difficult to reconcile with universal suffrage. Yet such capital concentration might be tenable if the income from capital accounts for only a small part of national income: perhaps one-fourth to one-third, or sometimes a bit more, as in the Ancien Régime (which made the extreme concentration of wealth at that time particularly oppressive). But if the same level of inequality applies to the totality of national income, it is hard to imagine that those at the bottom will accept the situation permanently.

That said, there are no grounds for asserting that the upper decile can never claim more than 50 percent of national income or that a country’s economy would collapse if this symbolic threshold were crossed. In fact, the available historical data are far from perfect, nd it is not out of the question that this symbolic limit has already been exceeded. In particular, it is possible that under the Ancien Régime, right up to the eve of the French Revolution, the top decile did take more than 50 percent and even as much as 60 percent or slightly more of national income. More generally, this may have been the case in other traditional rural societies. Indeed, whether such extreme inequality is or is not sustainable depends not only on the effectiveness of the repressive apparatus but also, and perhaps primarily, on the effectiveness of the apparatus of justification. If inequalities are seen as justified, say because they seem to be a consequence of a choice by the rich to work harder or more efficiently than the poor, or because preventing the rich from earning more would inevitably harm the worst-off members of society, then it its perfectly possible for the concentration of income to set new historic records. That is why I indicate in Table 7.3 that the United States may set a new record around 2030 if inequality of ownership of income from labor—and to a lesser extent ownership of capital—continue to increase as they have done in recent decades. The top decile would then claim about 60 percent of national income, while the bottom half would get barely 15 percent.


The second way of achieving such high inequality is relatively new. It was largely created by the United States over the past few decades. Here we see that a very high level of total income inequality can be the result of a “hypermeritocratic society” (or at any rate a society that people at the top like to describe as hypermeritocratic). One might call this a “society of superstars” (or perhaps “supermanagers,” a somewhat different characterization). In other words, this is a very inegalitarian society, but one in which the peak of the income hierarchy is dominated by very high income from labor rather than by inherited wealth. I want to be clear that at this stage I am not making a judgement about whether a society of this kind really deserves to be characterized as “hypermeritocratic.” It is hardly surprising that the winners in such a society would wish to describe the ocial hierarchy in this way, and sometimes they succeed n convincing some of the losers. For present purposes, however, hypermeritocracy is not a hypothesis but one possible conclusion of the analysis—bearing in mind that the opposite conclusion is equally possible. I will analyze in what follows how far the rise of labor income inequality in the United States has obeyed a “meritocratic” logic (insofar as it is possible toanswer such a complex normative question).

What primarily characterizes the United States at the moment is a record level of inequality of income from labor (probably higher than in any other society at any time in the past, anywhere in the world, including societies in which skill disparities were extremely large) together with a level of inequality of wealth less extreme than the levels observed in traditional societies or in Europe in the period 1900-1910. It is therefore essential to understand the conditions each of these two logics could develop, while keeping in mind that they may complement other in the century ahead and combine their effects. If this happens, the future could hold in store  new world of inequality more extreme than any that preceded it.

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