Growth and Inequality in the Financial System
Wealth will enable management-level employees to raise their earnings above what they would otherwise be. They will save more out of their earnings from work and out of the profits of their capital than ordinary workers will save out of their earnings from labor and their profits from their (much less) capital. These points can be put together into a simple model, which shows that the working of the financial system will steadily lead to greater and greater inequality. This will interact with the real side of the economy—the next chapter.