The New Capitalism

This ZEW Lecture on Economic Policy will discuss the characteristics of the new elites created by global neoliberalism in the United States and China.  The American elite is increasingly composed of people with high labor incomes and high capital incomes. One-third of the people in the top US income decile also belong to the top decile by labor income and top decile by capital income. These numbers are not very different from the numbers in other advanced Western capitalist countries (continental European countries’ shares are 20-25 percent). The elite thus combines high educational achievement (giving rise to high-paying jobs) with ownership of property. This is a type of elite probably never seen in history. The evolution of the Chinese elite is studied over a thirty-year period using the data for the top 5% of the urban population. The top has been transformed from a group that depended on state sector incomes to an elite that is largely capitalistic and/or has high-paying managerial jobs. A part of the capitalistic elite combines property ownership with membership of the Communist party which is especially lucrative for them.