SOCI 2220H Lecture Notes - Lecture 5: Wealth Management, Pension
5 Apr 2016
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Document Summary
Early 20th century- extreme inequality r > g. Low growth socieies where rate of return on capital- r" (usually 4-5%) exceeded rate of growth economy g" (usually <2%) Owners of capital can save enough of their income from capital that their fortune increases faster than the economy grows. Producing possibility of an inheritance society" with high concentraion of wealth and persistence of large fortunes from generaion to generaion: more likely to pass on these great forces to family, rather than other places. Taxaion of capital at high levels ater world war i and ii: destrucion in europe needed to be ixed. High growth rates, especially ater ww ii. To maintain lifestyles despite losses of income, many reniers depleted their capital to maintain lifestyles. Large fortunes take a long ime to accumulate. Emergence of super-managers, so top earned incomes balance incomes from capital. Despite reducions, coninuaion of taxaion of capital, beneiing the middle class.
