Writing in the middle of the 19th century, Karl Marx predicted that the gulf between the newly rich and the miserable urban poor, made much worse by the Industrial Revolution, would continue to widen indefinitely. This ever greater disparity, he thought, would ultimately undermine capitalism. Marx turned out to be wrong. Income inequality in Britain (and, from what we can tell, elsewhere in Europe too) began to narrow after the 1860s, and inequality in wealth peaked by the time of World War I. In America, inequality in both incomes and wealth began to lessen after the 1920s. The rich continued to live far better than the poor, but over the next 50 years the gap between them narrowed substantially.
