Why inequality matters

There was a time, not long ago, when most economists did not consider inequality in the distribution of income and wealth all that important. True, in Scandinavia and Austria, for example, distributional issues were embedded in economic policy through “social partnership” from the 1950s onward on the conviction that an equitable income distribution would help to promote social peace. Elsewhere, it was commonplace to view inequality as the gratuitous preoccupation of bleeding hearts that did not really merit the serious attention of policy makers seeking to promote rapid economic growth without inflation.