Let me now return to the explosion of wage inequality in the United States (and to a lesser extent Britain and Canada) after 1970. As noted, the theory of marginal productivity and of the race between technology and education is not very convincing: the explosion of compensation has been highly concentrated in the top centile (or even the top thousandth) of the wage distribution and has affected some countries while sparing others (Japan and continental Europe are thus far much less affected than the United States), even though one would expect technological change to have altered the whole top end of the skill distribution in a more continuous way and to have worked its effects in all countries at a similar level of development. The fact that income inequality in the United States in 2000â€“2010 attained a level higher than that observed in the poor and emerging countries at various times in the past â€” for example, higher than in India or South Africa in 1920â€“1930, 1960â€“1970, and 2000â€“2010 â€” also casts doubt on any explanation based solely on objective inequalities of productivity. Is it really the case that inequality of individual skills and productivities is greater in the United States today than in the half-illiterate India of the recent past (or even today) or in apartheid (or postapartheid) South Africa? If that were the case, it would be bad news for US educational institutions, which surely need to be improved and made more accessible but probably do not deserve such extravagant blame.
Piketty, Thomas (Translated by Arthur Goldhammer). Capital in the Twenty-First Century. 2014. p. 330 (hardcover)