Does capitalist economic growth lead to greater inequality, or less? The mid-20th-century economist Simon Kuznets believed that at first, industrialization would lead to greater inequality as a few pioneering entrepreneurs and workers moved to the cities where the growth was happening. But as rural areas emptied out and the economy matured, he said, inequality would fall. This prediction contradicted Marxist ideas, which envisioned a capitalist class steadily immiserating the workers of the world. The solution to the problems of capitalist growth, Kuznets asserted, was more capitalist growth.

Recently, many developing countries have been moving along the path of economic enrichment once trodden by the developed world. China’s industrialization, which followed free-market reforms in the 1980s, has been spectacular, and India’s only moderately less so. Latin America’s ascent has been more stately, but its citizens, too, have entered the ranks of the global middle class.

Read more: Capitalism Will Shrink Inequality. In Fact, It’s Happening. – Bloomberg View