The spectacular economic rise of the top 1 percent is now common knowledge, thanks in large part to the work of Thomas Piketty and his collaborators. The top 1 percent of U.S. residents now earn 21 percent of total national income, up from 10 percent in 1979.
Curbing this inequality requires a clear understanding of its causes. Three of the standard explanations—capital shares, skills, and technology—are myths. The real cause of elite inequality is the lack of open access and market competition in elite investment and labor markets. To bring the elite down to size, we need to make them compete.
Good empirical evidence for the three myths.