In the last ~200 years, when was the time where the wealth was most evenly distributed

by PandaDerZwote

I'm talking about western Europe or the USA for that matter.

arps0791

I can answer for the US.

Here is the Gini coefficient plotted from 1913-2009: http://imgur.com/nhzOUDK

Income inequality basically plummets during WWII, as the Government drastically increased it's role in the economy first through New Deal policies, and then through wage/price setting during the War. The American wealthy bore a large part of the financial cost of funding the war, as well as the aid programs that followed.

The two or so decades after the war, often called the American 'Golden Age,' was the period of time in which America saw the highest degree of income equality. The Golden Age was a function of several factors: American corporations facing little int'l competition, fortuitous matching of supply and demand of low skilled workers, powerful unions and labor interest parties, and a Government and ideology that acknowledged the importance of low-skilled labor's voice/rights in the wage-setting arena.

Powerful organized labor groups are hugely important because they help spread wage-setting and personnel norms beyond just the industry they work in. So the Golden Age's strong labor interests parties had spillover benefits to the rest of the economy. Additionally, the unions normalized cost-of-living increased (wages being indexed to inflation) and annual wage increases, both of which allowed labor wages to grow concurrently with productivity.

The whole story begins to change in the 1970s through the mid 1980s as we suffered from several economic shocks, food (1972) and oil (1973), and stagflation brought about by the debt financed Vietnam War.

For a good discussion of the Golden Age and income inequality:

allak

I am not sure if it is permitted under the rules, but there was an interesting article in last week issue of The Economist investigating this question here.

(The article actually is a summary the thesis of a book, “Capital in the Twenty-First Century” by Thomas Piketty, an economist at the Paris School of Economics.)

Blundee

I think I have arrived a bit too late to this thread so this may not get seen.

This question I believe boils down to when the state was carrying out the greatest level of redistribution.

I'm going to be answering this from a UK perspective but the general theory should apply for all developed nations. Straight away in the UK we can rule out the 1800's as having the most evenly distributed wealth simply because of the lack of government redistribution that was in effect. We had the New Poor Laws of 1834 but they were relatively minimal. We have to get onto Charles Booth and Benjamin Seebohm Rowntree. At the very end of the 1900's they carried out some of the first wide-scale surveys of poverty and argued for a minimum standard of provision after finding poverty to be a structural.

From their work there were a number of policy outcomes such as; the old age pensions act of 1908, the national insurance act of 1911 and so on. Here we see the start of comprehensive state involvement. By 1939 Britain has arguably the most comprehensive system of welfare in the world. However it failed to cope with the mass unemployment of the 30's and the aftermath of world war one.

Hopefully you can see how I'm attempting, I'm not sure to what effect, to create a timeline over the last 200 years of government redistribution efforts.

The Beveridge report of 1942 is commonly seen as the base for wartime social transformation. He identified the five great evils that the state needed to address (namely; want, squalor, ignorance, disease and idleness). He was a massive architect of the UK system of welfare and his ideas of universalism was really embraced by the nation. From his initial proposal rose much greater ideas of socially just, materially equal society.

So in this period we saw the creation of the National Health service, expansion of the education system, the national insurance act which allowed for unemployment benefits, sick benefits and so on and finally the pursuit of full employment under the ideas proposed by Keynes.

The following UK governments were at first extremely supportive of the welfare state and its universalism. However! This did not last long, in the 1950's we saw the start of means-related benefits being brought in (In which your income level was taken into account in determining the level of benefit that you received). Labour brought in an earnings related pension scheme in 1957. In the 50's the conservatives allowed the privatisation of pensions, further undermining universalism. In 1965 Labour brought in further earnings related supplements on a host of benefits. The logic behind this is that it is much cheaper for a state to run, they have to pay out less, however it creates issues such as poverty traps, where people are better off on a lower income because they then have access to certain benefits.

So over the next decades this universal system became further eroded and then along came stop-go inflation in the 70's and the diminishing of Keynesian and the labour party abandoned high employment as a commitment. From this point onwards with the inception of monetarism and Thatcherism (This is also reflected in the US with Reganism) the state played a much more diminished role in redistribution and it hasn't since.

So! Perhaps on a slight tangent (TL;DR?), I would argue that wealth in the UK and as it appears to be in the US was most evenly distributed during the period of the 1950's where the idea of universalism and creating a socially just society was at its zenith and the State was carrying out the greatest levels of redistribution.

Happy to provide sources and clarification if this is actually read by anyone! Apologies for the rambling and the tangential nature. Frankly I used this as a lovely piece of distraction from much more tedious work.