A report claiming that the great diminution of wealth inequality in the 20th century didn’t happen. Or rather, didn’t happen quite as much as people think it did. The reason being that people lie, especially about taxes:

The answer? Lots of it goes awol, not being declared when members of the dynasty die. For individual families this could be the result of incompetence, but overall that can’t explain the scale of what is going on. The richest 1,500 dynasties of 1892-1920 had at least 20%-32% of their wealth hidden by their descendants in the second half of the 20th century, with richer families hiding more of their wealth.

The research is here. We’re not entirely sure we believe the argument itself. Because there’s a certain fact about how great fortunes used to be held - agricultural land was the thing. And the great stylised fact about wealth is the plunge in the relative value of agricultural land over the past 150 years. The steamship opened the American prairies as food sources, the refrigerated ship the pampas, the railways the Ukraine. As each change worked through the system British land prices fell - relatively that is, not necessarily in nominal, money, terms. As we’ve noted before time was that 3,000 acres would finance the building of a baronial manse, today the same estate wouldn’t cover the maintenance bill for the roof.

But such quibbles aside the paper is of great interest.. Firstly, if true, then the seeming rise in wealth inequality in recent years isn’t true. Further, if the decline in it didn’t happen then all those good things ascribed to the reduction also can’t be so allocated. Something else must explain those claimed glories of the mid-last century and so too must it be true that the taxation of wealth won’t bring them back.

The largest lesson though is about the power of the state. If the panopticon can’t actually tax such things effectively then perhaps we should be seeking solutions to our varied problems that don’t involve the state being that panopticon?