Visions of Inequality: From the French Revolution to the End of the Cold War
by Branko Milanovic · 9 Oct 2023
(clockwise from top left): Adam Smith (Science Source/Getty Images); Vilfredo Pareto; David Ricardo (Hulton Archive/Getty Images); Portrait du docteur François Quesnay (Musée Carnavalet); Simon Kuznets (AFP via Getty Images); Karl Marx (Hulton Archive/Getty Images) 978-0-674-26414-4 (cloth) 978-0-674-29462-2 (EPUB) 978-0-674
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–Efficiency Trade-off 4 Karl Marx: The Decreasing Rate of Profit but Constant Pressure on Labor Incomes 5 Vilfredo Pareto: From Classes to Individuals 6 Simon Kuznets: Inequality during Modernization 7 The Long Eclipse of Inequality Studies during the Cold War Epilogue: The New Beginning Notes Acknowledgments Index Prologue The objective of
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to deal, directly or indirectly, with income distribution and income inequality. They are Fran ç ois Quesnay, Adam Smith, David Ricardo, Karl Marx, Vilfredo Pareto, Simon Kuznets, and a group of economists from the second half of the twentieth century (the latter collectively influential even as they individually lack the iconic status
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in Europe) 1867 (Meiji Restoration) 1883 (Just before the division of Africa conference) Vilfredo Pareto (75) 1848 (Revolutions in Europe) 1896 1923 (Mussolini in power) Simon Kuznets (84) 1901 1955 (Cold War) 1985 (Gorbachev in power) While writing this book, I unexpectedly encountered a similar structure in Leszek Kolakowski’s Main Currents
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on which the elite is built may vary, but the elite versus the population split remains. Elites just take different sociological forms in different societies. Simon Kuznets worked and lived in the United States of the 1950s and the 1960s, in an entirely different environment from the other authors considered here. Inequality
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early twentieth. The sixth author marks a break in the lineage. Perhaps too much time—time that included two world wars—elapsed between Pareto and Simon Kuznets. Kuznets’s work was strongly empirical, and he did not have much (or almost anything) in common with Ricardo or Marx. Nor did he and
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be impervious to subjective feelings or preferences, might have been duped at that very point—the same one where he saw many others commit mistakes. Simon Kuznets would, about a half century after Pareto, go precisely in the direction Pareto refused to take: he would argue that income inequality changes in a
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because there is no ceiling to income. This is, of course, very different from other phenomena, where there are natural limits. CHAPTER SIX Simon Kuznets: Inequality during Modernization Simon Kuznets was arguably (with the other contender being John Maynard Keynes) the most important economist of the twentieth century. 1 He laid the foundations of
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by technological revolutions. Despite its ups and downs, the Kuznets hypothesis is still with us. Kuznets’s Contributions Several very important contributions were made by Simon Kuznets. For the first time in the history of economics, his hypothesis clearly linked movements in income inequality to structural transformations of economies (or to rising
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, British Economic Growth 1270–1870: An Output-Based Approach (Cambridge: Cambridge University Press, 2015). 14 . Modern growth, according to Simon Kuznets, implies a per-capita growth rate of 2 percent per year. Simon Kuznets, Economic Growth of Nations: Total Output and Production Structure (Cambridge, MA: Belknap Press of Harvard University Press, 1971), 10–27
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China: An Empirical Investigation,” Stone Center on Socio-Economic Inequality Working Paper 64, April 2023. 49 . Pareto, Manual of Political Economy, 199–200. 6. Simon Kuznets 1 . Simon Kuznets was born in 1901 in the city of Pinsk, then part of the Russian Empire and now in Belarus. During World War I and the
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, Kuznets emigrated, via Danzig (Gda ń sk), to the United States. The only detailed account of his early life can be found in Moshe Syrquin, “Simon Kuznets and Russia: An Uneasy Relationship,” in Russian and Western Economic Thought: Mutual Influences and Transfer of Ideas, ed. Vladimir Avtonomov and Harald Hagemann (Berlin: Springer
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, 2022). 2 . Simon Kuznets, “Regional Economic Trends and Levels of Living” (1954), reprinted in Kuznets, Economic Growth and Structure: Selected Essays (New York: W. W. Norton, 1965). 3 . Branko
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Development Center, Faculty of Economics and Business, University of Groningen, https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2020?lang = en . 6 . Simon Kuznets, “Inequalities in the Size Distribution of Income” (1963), reprinted in Kuznets, Economic Growth and Structure: Selected Essays (New York: W. W. Norton, 1965), 303. 7
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Marx and Engels in their correspondence but was never adequately reflected in Marx’s own economic research. 14 . Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45 (1955): 1–28, 18. 15 . Simon Kuznets, Modern Economic Growth (New Haven: Yale University Press, 1966), 217. 16 . For support of the assumption of less
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and Row, 1968), 6. 24 . See Gertrude Himmelfarb, “Introduction,” in Alexis de Tocqueville’s Memoir on Pauperism, trans. Seymour Drescher (London: Civitas, 1997) , 3. 25 . Simon Kuznets, Shares of Upper Income Groups in Income and Savings (New York: National Bureau of Economic Research, 1953). 26 . Arthur F. Burns, “Looking Forward,” in Burns
The State and the Stork: The Population Debate and Policy Making in US History
by Derek S. Hoff · 30 May 2012
the first meeting they fielded papers from several influential population experts with a wide range of views: Spengler; Arnold Harberger, a University of Chicago economist; Simon Kuznets, one of the giants of twentieth-century economics; geochemist Harrison Brown; Ansley Coale of Coale-Hoover fame; and Theodore Schultz, an agricultural economist about to
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, however, Simon’s views shifted 180 degrees to a full rejection of Malthusianism. Simon’s about-face came partly from studying the historical analyses of Simon Kuznets, Richard Easterlin, and others who noted the absence of a strict relationship between population and economic growth, as well as the work of the agricultural
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the high-birthrate 1950s was one of the few decades in modern American history during which the gap between the rich and poor narrowed. See Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45 (March 1955): 1–28. On postwar inequality, see Derek S. Hoff, “Statistical Appendix: Historical Income Inequality
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Labor Statistics, “Summaries of Studies and Reports,” Monthly Labor Review 82 (February 1959): 25. 103. For the place of population in modern growth theory, see Simon Kuznets, Postwar Economic Growth: Four Lectures (Cambridge, Mass.: Belknap Press of Harvard University Press, 1964), esp. lecture 1; Moses Abramovitz, Thinking about Growth and other Essays
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not only in product per capita but also in population does not imply that the latter was a necessary condition for the former” (2). 119. Simon Kuznets, Six Lectures on Economic Growth (New York: Free Press of Glencoe, 1959), 37. The next year, Kuznets suggested that larger populations 298 notes to chapter
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happily produce more geniuses (“Population Change and Aggregate Output,” in Demographic and Economic Change in Developed Countries [Princeton: Princeton University Press, 1960], 324–39). 120. Simon Kuznets, “Toward a Theory of Economic Growth,” in National Economic Welfare at Home and Abroad, ed. Robert Lekachman (Garden City, N.Y.: Doubleday, 1955; New York
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in the Records of the Population Council, Rockefeller Archive Center, Tarrytown, N.Y., Box 39, Folder 560, “Schultz, Theodore W., 1956–1966.” 76. For example, Simon Kuznets believed that the ability of societies to invest in human capital upset traditional assumptions about the effects of population growth on capital formation. See his
Stealth of Nations
by Robert Neuwirth · 18 Oct 2011 · 340pp · 91,387 words
limited. “There is social and psychological justification for significant inequalities of incomes and wealth,” he wrote, “but not for such large disparities as exist today.” Simon Kuznets, the great modern explicator of inequality, won the Nobel Prize in economics in 1971 for his work suggesting that inequality starts out as relatively minor
Global Inequality: A New Approach for the Age of Globalization
by Branko Milanovic · 10 Apr 2016 · 312pp · 91,835 words
in some cases to the Middle Ages, to reformulate the Kuznets hypothesis, the workhorse of inequality economics. This hypothesis, formulated by Nobel Prize–winning economist Simon Kuznets in the 1950s, states that as countries industrialize and average incomes grow, inequality will at first increase and then decrease, resulting in an inverted-U
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long swings in income inequality must be viewed as part of a wider process of economic growth and interrelated with similar movements in other elements. —SIMON KUZNETS The Origins of Dissatisfaction with the Kuznets Hypothesis Dissatisfaction with the Kuznets hypothesis—the idea that inequality is low at very low income levels, then
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to discuss these four tensions. The fallacy is the view that the reduction of absolute poverty worldwide would somehow alleviate or even eliminate these tensions. Simon Kuznets dismissed this idea long ago (in 1954). Huge gaps in income and standard of living between, for example, a New Yorker and a member of
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.7 percent) to $4.5 trillion out of world GDP of $73 trillion (6.1 percent). 2. Inequality within Countries Epigraph: Kuznets (1955, 21). 1. Simon Kuznets first stated this hypothesis in his 1955 presidential address to the American Economic Association; he later restated and expanded it (Kuznets 1966). An important precursor
The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations
by David Pilling · 30 Jan 2018 · 264pp · 76,643 words
contribution. Modern national accounts of the type used by virtually every country in the world today only really began to take shape in the 1930s. Simon Kuznets is usually credited with the invention of GDP, the quintessence of the national accounting system. But Kuznets, rather like Victor Frankenstein, soon saw his creation
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the anomalies in how countries compile their national accounts is their treatment of illegal activities, such as gambling, prostitution, and the handling of stolen goods. Simon Kuznets thought only activities that contribute to human welfare should be counted, but who was to decide what they were? He thought advertising was worthless. Perhaps
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,” he says, conjuring up a metaphor that makes the comparison of apples and oranges seem mundane. So he has adapted the “rhubarb” methodology designed by Simon Kuznets to measure the US economy to the realities of an “elephant” economy like Kenya’s. “It’s perfectly correct for the developed world,” he says
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order. “If there is a higher rate of disorder, you need a bigger police force to keep the peace,” he says, sounding like a Chinese Simon Kuznets. “That also creates GDP, but you shouldn’t count it because it is unnecessary. Is that the kind of growth we want?” Niu’s proposal
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is subjective well-being that you’re after, then, objectively speaking, you’d rather be in Tromsø than in Thimphu. 13 GDP 2.0 If Simon Kuznets could choose where to be reborn, he might well choose Maryland. The inventor of GDP had serious reservations about his own measure of economic activity
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. But more income—more GDP—should never itself be the goal. At most, it should be the means by which we achieve our ends. As Simon Kuznets himself asked, “What are we growing? And why?” Our priesthood of economists depends on “the idea that there are economic laws we cannot contradict any
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see no statistical evidence for Kuznets’s theory. 8. For a good description of Kuznets’s character and methods see Robert William Fogel, Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics, University of Chicago Press, 2013. 9. Ehsan Masood, The Great Invention, Saqi Books, 2014, p. 15. 10. Kuznets originally
The Technology Trap: Capital, Labor, and Power in the Age of Automation
by Carl Benedikt Frey · 17 Jun 2019 · 626pp · 167,836 words
, found that virtually all economic advance over the twentieth century had been thanks to technology. And others documented that those gains had been widely shared. Simon Kuznets found that America had become more equal and advanced his theory of capitalist development in which inequality automatically decreases along the industrialization path. Nicholas Kaldor
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facts of economic growth, showing that the labor share of income had remained roughly constant, at two-thirds of national income, despite rapid mechanization; and Simon Kuznets advanced his hugely optimistic theory of economic progress in which inequality automatically decreases, regardless of economic policy choices.54 Their optimism surely seemed warranted at
Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab · 7 Jan 2021 · 460pp · 107,454 words
: The Issues of the World Economy Today There might have been no better person to piece together the puzzle of the world economy today than Simon Kuznets, a Russian-born1 American economist, who died in 1985. It may seem odd at first that a man who passed away in the mid-1980s
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the root of the feeling of betrayal people have toward their leaders. But before we get deeper into this curse, let's examine who exactly Simon Kuznets was and find out what people remembered him for. The Original Kuznets’ Curse: GDP as Measure of Progress Simon Smith Kuznets was born in Pinsk
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our policy answers will work? Economic metrics were scarce, and GDP, the measure we use today to value our economy, had not been invented. Enter Simon Kuznets. An expert in statistics, mathematics, and economics, he developed a standard way of measuring the gross national income (GNI) or gross national product (GNP) of
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growth is good reigned supreme. But there is a painful end to this story, and we could have foreseen it had we better listened to Simon Kuznets himself. In 1934, long before the Bretton Woods Agreement, Kuznets warned US Congress not to focus too narrowly on GNP/GDP: “The welfare of a
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: lacking public investments—an increasingly likely reality for budget-strained governments—economic mobility in many countries could get worse, rather than better. So, what would Simon Kuznets have to say about all these findings, many of which go against his own theory? We do not need to speculate. According to his colleague
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many people behind economically. It was Kuznets’ final curse. He had never suggested that our economic system was indefinitely sustainable. ▪ ▪ ▪ We did not listen to Simon Kuznets’ cautious warnings: he told us GDP was a poor measure for broad societal progress, as it was more geared toward measuring production capacity than any
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was born in Pinsk, then part of the Russian Empire. Nowadays, Pinsk is part of Belarus. 2 “Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics”, Chapter 5: The Scientific Methods of Simon Kuznets, Robert William Fogel, Enid M. Fogel, Mark Guglielmo, Nathaniel Grotte, University of Chicago Press, p. 105, https://www.nber
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.org/system/files/chapters/c12917/c12917.pdf. 3 A direct quotation of Kuznets’ autobiography for the Nobel Prize committee. The Nobel Prize, “Simon Kuznets Biographical,” 1971, https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/biographical/. 4 “GDP: A brief history,” Elizabeth Dickinson, Foreign Policy, January 2011, https://foreignpolicy
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://www.oecd.org/economy/outlook/Decoupling-of-wages-from-productivity-november-2018-OECD-economic-outlook-chapter.pdf. 36 “Some Notes on the Scientific Methods of Simon Kuznets,” Robert Fogel, National Bureau of Economic Research, December 1987, https://www.nber.org/papers/w2461.pdf. 37 “Global Inequality is Declining—Largely Thanks to China
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.worldbank.org/en/topic/poverty/publication/fair-progress-economic-mobility-across-generations-around-the-world. 59 “ibidem”. 60 “Some Notes on the Scientific Methods of Simon Kuznets,” Robert Fogel, NBER, December 1987, https://www.nber.org/papers/w2461.pdf. 61 These two sentences are adapted from “The World Economic Forum, A Partner
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production capacity of a country—no luxury with the Second World War around the corner. Since then, however, not only the inventor of the metric, Simon Kuznets, but many other economists, including Mariana Mazzucato, Diane Coyle, and Nobel Prize winner Joseph Stiglitz, pointed out some of the fundamental flaws of GDP.39
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Zealand's focus on social issues instead of, 234–236 post-World War II low level of, 105 private sector percentage of China's, 172 Simon Kuznets' warning on progress measured by, 21–25, 34, 46, 53 Singapore (1965–2019), 123–125 stakeholder model going beyond profits and, 189–193 trade globalization
Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab and Peter Vanham · 27 Jan 2021 · 460pp · 107,454 words
: The Issues of the World Economy Today There might have been no better person to piece together the puzzle of the world economy today than Simon Kuznets, a Russian-born1 American economist, who died in 1985. It may seem odd at first that a man who passed away in the mid-1980s
…
the root of the feeling of betrayal people have toward their leaders. But before we get deeper into this curse, let's examine who exactly Simon Kuznets was and find out what people remembered him for. The Original Kuznets’ Curse: GDP as Measure of Progress Simon Smith Kuznets was born in Pinsk
…
our policy answers will work? Economic metrics were scarce, and GDP, the measure we use today to value our economy, had not been invented. Enter Simon Kuznets. An expert in statistics, mathematics, and economics, he developed a standard way of measuring the gross national income (GNI) or gross national product (GNP) of
…
growth is good reigned supreme. But there is a painful end to this story, and we could have foreseen it had we better listened to Simon Kuznets himself. In 1934, long before the Bretton Woods Agreement, Kuznets warned US Congress not to focus too narrowly on GNP/GDP: “The welfare of a
…
: lacking public investments—an increasingly likely reality for budget-strained governments—economic mobility in many countries could get worse, rather than better. So, what would Simon Kuznets have to say about all these findings, many of which go against his own theory? We do not need to speculate. According to his colleague
…
many people behind economically. It was Kuznets’ final curse. He had never suggested that our economic system was indefinitely sustainable. ▪ ▪ ▪ We did not listen to Simon Kuznets’ cautious warnings: he told us GDP was a poor measure for broad societal progress, as it was more geared toward measuring production capacity than any
…
was born in Pinsk, then part of the Russian Empire. Nowadays, Pinsk is part of Belarus. 2 “Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics”, Chapter 5: The Scientific Methods of Simon Kuznets, Robert William Fogel, Enid M. Fogel, Mark Guglielmo, Nathaniel Grotte, University of Chicago Press, p. 105, https://www.nber
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.org/system/files/chapters/c12917/c12917.pdf. 3 A direct quotation of Kuznets’ autobiography for the Nobel Prize committee. The Nobel Prize, “Simon Kuznets Biographical,” 1971, https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/biographical/. 4 “GDP: A brief history,” Elizabeth Dickinson, Foreign Policy, January 2011, https://foreignpolicy
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://www.oecd.org/economy/outlook/Decoupling-of-wages-from-productivity-november-2018-OECD-economic-outlook-chapter.pdf. 36 “Some Notes on the Scientific Methods of Simon Kuznets,” Robert Fogel, National Bureau of Economic Research, December 1987, https://www.nber.org/papers/w2461.pdf. 37 “Global Inequality is Declining—Largely Thanks to China
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.worldbank.org/en/topic/poverty/publication/fair-progress-economic-mobility-across-generations-around-the-world. 59 “ibidem”. 60 “Some Notes on the Scientific Methods of Simon Kuznets,” Robert Fogel, NBER, December 1987, https://www.nber.org/papers/w2461.pdf. 61 These two sentences are adapted from “The World Economic Forum, A Partner
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production capacity of a country—no luxury with the Second World War around the corner. Since then, however, not only the inventor of the metric, Simon Kuznets, but many other economists, including Mariana Mazzucato, Diane Coyle, and Nobel Prize winner Joseph Stiglitz, pointed out some of the fundamental flaws of GDP.39
…
Zealand's focus on social issues instead of, 234–236 post-World War II low level of, 105 private sector percentage of China's, 172 Simon Kuznets' warning on progress measured by, 21–25, 34, 46, 53 Singapore (1965–2019), 123–125 stakeholder model going beyond profits and, 189–193 trade globalization
GDP: The World’s Most Powerful Formula and Why It Must Now Change
by Ehsan Masood · 4 Mar 2021 · 303pp · 74,206 words
to calculate incomes. Offices for national statistics in most countries will report on the results of all three methods. In the 1930s, Colin Clark and Simon Kuznets favoured an incomes approach. Much of the global media at the time of writing concentrates on the expenditures approach. This book will do the same
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by a committee of the US Senate a year earlier. The task was handed to a talented young economist who had emigrated from Russia. For Simon Kuznets, National Income would be the job that would define the rest of his career. But it would also eventually estrange him from later US administrations
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and fossil fuels. Governments also like to know how much their citizens earn, so that they can levy the appropriate amount of tax. But before Simon Kuznets’s 1932 report on national income, governments in the Western Hemisphere had a weaker grip on this kind of knowledge. Unlike the more centrally planned
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reading too much into GDP beyond what it says about the state of production, or spending, or incomes. From the earliest days, its inventors, including Simon Kuznets and the British economist John Maynard Keynes, understood that it is not really a measure of prosperity, and Kuznets in particular became skeptical of the
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estimate of total US national income for 1929, 1930, and 1931 and to provide this information before December 15, 1933. That task was assigned to Simon Kuznets (1901–1985), who had emigrated to America from Russia at age twenty-two, in 1922, five years after the Russian Revolution. Kuznets started work on
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economy where incomes not only had stayed constant but had even managed to register a small increase. This was the column marked “Government.” According to Simon Kuznets and his team, between 1929 and 1932 income distributed by government entities was up from $6.5 billion to $6.8 billion, reflecting a small
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in government spending isn’t as intriguing as is its inclusion in Kuznets’s national accounts. This is because, for much of his professional life, Simon Kuznets fought the inclusion of government spending in GDP. Data from businesses formed the cornerstone of his methodology, and he was confident in the quality of
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statistician Colin Clark (1905–1989). Clark was an obsessive collector of data on the national income. He was the nearest that Britain had to a Simon Kuznets, although he was a Kuznets with no official mandate.14 “There is no one to-day who does not mainly depend on the brilliant private
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, was the final variable in our GDP formula—the G, for government spending, which he calculated to be £850 million. In 1940, six years after Simon Kuznets had presented his national income estimates to the Senate, Keynes had written down in a table the basis for what today is the formula for
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for mobilizing resources for the war, and they, as much as the Commerce Department, needed a handle on the nation’s finances. But such was Simon Kuznets’s hold on accounting methodology that these younger officials were finding it hard to have an impact. By 1940 and with America’s role in
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. But he misjudged the US administration’s determination, indeed its insistence, that public spending be included as a positive indicator for economic health. By 1941 Simon Kuznets’s days as America’s chief national accountant were over. It was Keynes who had effectively helped his younger American colleagues win the argument and
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, 1998. This is a Harvard Business School case study in which the authors reproduce three primary documents, including the 1932 US Senate resolution in which Simon Kuznets was commissioned. 2. Carol S. Carson, “The History of the United States National Income and Product Accounts,” Review of Income and Wealth 21 (1975): 153
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exist online. However, the National Archives and Records Administration in Washington, DC, has only a six-page summary. Staff told me that for some reason Simon Kuznets’s original document was never saved or archived. They added that it is possible that a copy may exist in Senator La Follette’s private
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separated. —Richard Stone, “The Fortune Teller,” Economica X (1943) John Maynard Keynes’s role in constructing what eventually became GDP, and his concurrent debate with Simon Kuznets about the place for public spending—the G in the GDP formula—has been one of economic history’s best-kept secrets. But Keynes wasn
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’t working alone. He had a partner in this endeavor, another of his students and fellow Cambridge economist Richard Stone (1913–1991). After Simon Kuznets, Stone, too, would win a Nobel Prize for his work on national income accounting.1 Shortly before his death on April 21, 1946, Keynes persuaded
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his US counterparts were looking for. By 1944 civil servants in the US administration had still largely been unsuccessful in shaking off the influence of Simon Kuznets. On their own they needed all the external support they could get. In order to search for a consensus, a three-way meeting was arranged
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to the world. In doing so, perhaps most important of all, Stone used Keynes’s definition of GDP, and not that of Colin Clark and Simon Kuznets. In tapping Stone for the job, Keynes had chosen wisely. He understood that national income accounting needed economists who were good with figures. That sounds
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place in Konstanz, then in West Germany. Anyone who was anyone in academic economics seemed to have been invited. There was GDP’s co-creator Simon Kuznets; the historian of the British industrial revolution, Phyllis Deane; and the growth theorist Robert Solow. It must have been quite an event, though evidently not
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one. As we saw in Chapter 2, the idea didn’t even need to be expressed in this way. Indeed, it wasn’t, not by Simon Kuznets, not by John Maynard Keynes. National income accounting was represented by both men as a table with different columns for different kinds of spending. The
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. I am especially grateful to Kate Mollan of the National Archives and Records Administration in Washington DC for dogged pursuit of an original copy of Simon Kuznets’s 261-page report National Income 1929–32; and to the staff at the library of the Institute of Development Studies in Sussex for material
The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality
by Branko Milanovic · 15 Dec 2010 · 251pp · 69,245 words
.8 - Can Several Countries Exist in One? Vignette 1.9 - Will China Survive in 2048? Vignette 1.10 - Two Students of Inequality: Vilfredo Pareto and Simon Kuznets CHAPTER 2 Vignette 2.1 - Why Was Marx Led Astray? Vignette 2.2 - How Unequal Is Today’s World? Vignette 2.3 - How Much of
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there were no laws of its “change” with development. There was, Pareto argued, only a “law of its fixity.” It wasn’t until 1955 that Simon Kuznets, a Russian-American economist and statistician, proposed the first real theory of what propels change in income distribution. (He is profiled, together with Pareto, in
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hardly speak of anything serious and usable before approximately the early 1950s. (You may recall that Pareto’s speculations were based on fiscal data, whereas Simon Kuznets had hardly a dozen surveys to draw upon—even as late as 1955.) For developing countries the situation is even worse; very often there is
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national unity, it is very likely to come from the economic split within the nation. Vignette 1.10 Two Students of Inequality: Vilfredo Pareto and Simon Kuznets It may surprise the reader that there are few theories or theoretical insights into the formation and evolution in time of income distribution among individuals
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to be “guillotined” as one ascended the income distribution ladder. Pareto thought that an “iron law” of income distribution was uncovered—thus spoke Pareto.11 Simon Kuznets, the second apostle of income distribution studies, was an entirely different man. Born in the Russian Empire (in what is today Belarus) in 1901, he
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, Kuznets treated every number with skepticism; one reveled in his aristocratic academic maverick status, while the other was a prototypical professor. From such scant “matériel,” Simon Kuznets produced in 1955 what became, and still remains, the workhorse of the modern theory of income distribution. It is a hypothesis that at the early
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and interpersonal inequality and redistribution and of social arrangements Karenin, Alexei Aleksandrovich Karenina, Anna Kenya Keynes, John Maynard Khodorovsky, Mikhail Kirchner, Nestor Korea Kosovo Kuznets, Simon Kuznets’ hypothesis Kynaston, David Labor government employment and migration of Lampedusa detention camp Landlords Laos Latin America Asia as mirror image of GDP per capita in
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