John Kay at the FT:
In 1920, the 1 per cent ... accounted for 15-20 per cent of total gross income in developed countries. ... In the 50 years that followed, the share of the 1 per cent fell almost everywhere by about half... During that half century, public spending on health, education and especially social benefits increased; taxation became more burdensome and more progressive. The forces of equalisation were powerful indeed. ...From 1970, the egalitarian trend came to an end everywhere ... principally the result of two interrelated causes: the growth of the finance sector; and the explosion of the remuneration of senior executives. ...
These effects have not been seen in countries, such as France and Germany, that have proved more resistant to financialisation. It is in Britain and the US, which have experienced the most extensive growth in the sector, where they have made their greatest impact.
Speaking of France and attempts to turn back the forces of equality such as public spending on education, health, generous social insurance, and highly progressive taxation:
About That French Time Bomb, by Paul Krugman: ... It’s really amazing how much bad press France gets — and not just from goldbugs and the like. It was the Economist that declared, on its cover more than two years ago, that France was the time bomb at the heart of Europe. And of course the inflationistas were even more certain that France faced imminent doom; for example, John Mauldin proclaimed that France was in fact worse than Greece.
Now that time bomb — which has actually had better economic growth since 2007 than Britain — can borrow at an interest rate of only 0.8 percent.
It seems obvious to me that the bad-mouthing of France was and is essentially political. Of course France has big problems; who doesn’t? But the real sin of the French body politic is its refusal to buy into the notion that the welfare state must be sharply downsized if not dismantled; hence the continuing warnings that France is doomed, doomed I tell you.
And this in turn reflects the larger issue of what calls for austerity are really about. Can we imagine a clearer demonstration that they’re not really about appeasing bond vigilantes?