Naked Capitalism has the very interesting article Introducing Kuznets Waves: How Income Inequality Waxes and Wanes Over the Very Long Run.

The pro-inequality trends will be very hard to overturn during the next generation, but eventually they may be – through a combination of political change, pro-unskilled labour technological innovations (which will become more profitable as skilled labour’s price increases), dissipation of rents acquired during the current bout of technological efflorescence, and possibly greater attempts to equalise ownership of assets (through forms of ‘people’s capitalism’ and workers’ shareholding).

Now, these are of course the benign factors that, I think, will ultimately set inequality in rich countries on its downward path. But history teaches us too that there are malign factors, notably wars, in turn caused by domestic maldistribution of income and power of the elites (as was the case in the World War I), that can also do the job of income levelling. But they do it at the cost of millions of human lives. One can hope that we have learned something from history and would avoid this destructive path to equality in poverty and death.

The author starkly sets out what I have been thinking are the two options. I’d much rather we promote the benign forces than the malign ones. The wealthy are probably thinking about the same possibilities, but are hoping they can ignore the benign ones because the malign ones probably won’t happen in their lifetimes. As always, the rich don’t realize there is no place for them to hide if the malign options happen.