Background and History 5 incomes for all—is neither possible nor desirable. Economics does not provide an answer to the question as to what is the desirable or “socially optimal” level of inequality. Further, the question as to the “right amount” of inequality is not merely an economic question it is also a question of fairness and justice, power and politics, individual rights and the common good. Where some take the “American dream” to mean unlimited opportunity for those with talent and drive to realize their dreams of vast wealth, even if this means leaving others behind, others take the “American dream” to mean using the nation’s abundance to ensure opportunity for all, leaving no one behind (Sawhill and Haskins 2009). One way to put today’s level of inequality into perspective is to pull back the lens and look at the nation’s experience of inequality over the long run—decades and even centuries. Over the course of its history, the United States has seen long eras of both rising and falling inequality. The trajectory of inequality has been shaped by economic and social forces, his- torical events, and political choices. In the words of economist Thomas Piketty (2015), “Each country has its own intimate history with inequality” (69). What forces have led to rising inequality in the past, and conversely, when and why has the nation experienced its most egalitarian distribution of eco- nomic resources? This chapter first introduces the conceptual framework that economists use to track income inequality, then applies that framework to trace the ebb and flow of income inequality across the nation’s history. Ours is not the first generation of Americans to experience growing inequality: over the course of the nation’s history, the level of inequality has increased and decreased, and is once again on the rise. The history of inequal- ity in the United States shows first and foremost that rising inequality is not inevitable. History holds lessons as to how we can grow our economy more equitably and sustainably, while rewarding hard work and innovation.
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