Description:

Should we worry about the rich? The increase in income concentration into the hands of a relatively small number of people that has taken place in many countries in the last decades is, by now, a well-documented phenomenon in the economic literature. Another phenomenon which has recently received much attention in the literature is the growing number, among the super-rich, of the working rich, i.e. of those getting their very high incomes from work rather than from accumulated wealth. But, how should the rich be defined and, going beyond income concentration shares, how can we count them? Furthermore, how can we explain the rise in the number of the working rich? Are the processes giving rise to the rich or the super-rich truly competitive or do they embody any forms of power? can these processes find any justification in the principles of liberal justice and, in particular, can we say that they reflect desert? Will the rest of society benefit, in one way or another, from the thriving of very high incomes at the top of the income ladder? these questions have been left largely unanswered. The main objective of is to address these issues. Among the many suggestions offered, the authors propose to define the rich by means of a criterion similar to the one adopted for the definition of the poor. Accordingly, they estimate the incidence and the evolution of the rich in recent years. In addition, the authors challenge the view of competition underlying the “winner-take-all” perspective. they argue, that the working rich, or in general the super-rich, very often get their incomes in markets that are not truly competitive. Also on account of this lack of true competitiveness, the processes leading to very high incomes are characterised by a structure of reward which does not reflect desert. Remarkably, other principles of liberal justice would require an even more demanding analysis in order to establish the origins of the incomes of the super-rich. The authors also provide a comprehensive assessment of the possible consequences of the super-rich phenomenon on social well-being, from the effects on lower incomes to those on economic growth and philanthropy. Their conclusion is that most of these consequences are not positive; moreover, the positive ones could emerge, by the same token, in a society where inequality is less extreme and the rich get much of their incomes as a result of competitive processes. In the final chapter of the book, several policies are suggested, from those aimed at making markets more competitive (and thus more compatible with desert), for instance by means of what is sometimes called a pre-distribution strategy, to those centred on taxation. With regard to this latter policy option, some innovative proposals are put forward. the overall goal of such policies is to make income distribution at the top less dependent on power and undeserved advantages and more the outcome of competition and liberal values fulfilment. Keywords: top income, working rich, meritocracy, rents, income inequality. JEL: D31, D63 e J31.