[Despite the fact that strong demographic and economic growth rates improve social mobility, and therefore theoretically limit income inequality], one should be wary of the conventional wisdom that modern
economic growth is a marvellous instrument for revealing individual talents
and aptitudes. There is some truth in this view, but since the early nineteenth
century it has all too often been used to justify inequalities of all sorts, no
matter how great their magnitude and no matter what their real causes may
be, while at the same time gracing the winners in the new industrial economy
with every imaginable virtue. For instance, the liberal economist Charles
Dunoyer, who served as a prefect under the July Monarchy, had this to say in
his 1845 book De la liberté du travail (in which he of course expressed his opposition to any form of labor law or social legislation): “one consequence of
the industrial regime is to destroy artificial inequalities, but this only highlights natural inequalities all the more clearly.” For Dunoyer, natural inequalities included differences in physical, intellectual, and moral capabilities, differences that were crucial to the new economy of growth and innovation that
he saw wherever he looked. This was his reason for rejecting state intervention
of any kind: “superior abilities . . . are the source of everything that is great and
useful. . . . Reduce everything to equality and you will bring everything to a
standstill.” One sometimes hears the same thought expressed today in the idea
that the new information economy will allow the most talented individuals to
increase their productivity many times over. The plain fact is that this argument
is often used to justify extreme inequalities and to defend the privileges of the
winners without much consideration for the losers, much less for the facts, and
without any real effort to verify whether this very convenient principle can actually explain the changes we observe.
Thomas Piketty, Capital in the Twenty-First Century (2014: 84)
Thomas Piketty, Capital in the Twenty-First Century (2014: 84)
