Inequality is the central political-economy question of the post-2008 period. The Occupy movement (2011), Brexit (2016), Trumpism (2016 and 2024), the French gilets jaunes protests (2018), and the broader populist surge across advanced economies have all been read by serious analysts as political consequences of the post-1980 inequality rise. The causal direction is contested — populism may also reflect immigration, cultural change, the decline of trust in institutions — but the correlation between rising inequality and rising populism is robust enough that taking it seriously has become mainstream. The political class did not see this coming; the inequality data was visible for two decades before the politics caught up.
Policy responses to inequality fall into four broad families. Progressive taxation targets the post-tax distribution: Piketty's proposal for a global wealth tax; Saez and Zucman's specific US proposals; the international agreement on a 15% global minimum corporate tax (2021); estate and capital-gains tax reform. Transfer programmes deliver income directly to lower-income households: the US expanded child tax credit of the 2021 American Rescue Plan halved child poverty for the year it was in force, and was allowed to expire; universal basic income proposals (Andrew Yang in the US, several pilots in Europe and Africa); the European welfare states' more comprehensive systems. Labour-market policy changes pre-tax distribution by reshaping how wages are set: sectoral bargaining, minimum-wage increases, antitrust action against monopsonistic labour markets (where employers face limited competition for workers). Predistribution — a term coined by Jacob Hacker — changes the deeper rules so the pre-tax distribution is less unequal: competition policy, education access, housing supply, the structure of corporate ownership. Each family has its political constituencies and its empirical track record; none alone is sufficient.
The distributional impacts of climate policy and AI are now central inequality questions. Who bears the cost of decarbonization — through carbon prices that fall heavier on lower-income households, or through transition support that arrives unevenly — has become a defining political fight in every country attempting net-zero. Who captures the AI productivity gains — labour or capital, frontier-lab shareholders or downstream workers, the US and China or the rest — will be one of the largest distributional questions of the coming decade. The Piketty correction — that distribution matters as much as efficiency — is now part of the mainstream of economics, even where the policy conclusions remain contested. The next round of the argument is about how to act on it.