Britain's richest 10% owned more than 90% of wealth in 1910, while the top 1% owned 70%.
By 1970, these figures had dropped to 60-65% and 20% respectively before climbing back to 70% and 25-30% today. The middle class gained most from the decline in wealth at the top, but has lost out as the richest recovered lost ground. In the UK, the next wealthiest 40% have seen their share decline since the 1980s from somewhere between 35 and 30% to nearer 30% while in the US their share has dropped from 30% to 20%.
We are living in a second Belle Epoque, defined by the rise of the richest 1%. In Britain, the US and France the top 1% have over the past 100 years seen their fortunes rise and fall and rise again in a U-shaped arc. Before the first world war they accounted for a fifth of total income. By 1950, it had dropped by half. In 2013 it was 20% again.
The top 1% can take greater risks to generate higher returns. People with smaller sums must be more conservative. Billionaires generated 6.8% returns on their investments (after inflation) between 1987 and 2013, compared with an overall average return of 2.4%.
Incomes per adult grew by 1.4% after inflation between 1987 and 2013. A small gap between the return on capital and the rate of growth can in the long run create huge wealth for a small proportion of capital owners.
Inheritance flows from one generation to another have begun to rise. In France, the annual value of bequests and gifts has reached 15% of national income after dropping from 24% in 1900 to 4% in 1940.
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