In capitalism, wealth surges to the top but only trickles to the bottom, as was illustrated between 1870 and 1900 when a band of US industrialists became enriched beyond the realms of avarice.
Over the last 30 years, the scale of wealth enjoyed by entrepreneurs, friends and families has grown further and faster.
The multi-billion-dollar question is whether the hunger and envy that led to uprisings in late 19th century America is set to repeat itself.
The period was dubbed the Gilded Age by authors Mark Twain and Charles Dudley Warner, who were quick to see social deprivation was being masked by a thin layer of gold.
The wealth of the entrepreneurs like John Rockefeller, Andrew Mellon, Andrew Carnegie and Cornelius Vanderbilt would amount to billions in current money. Carnegie sold his steel business for the equivalent of $4.1 billion (€3.2 billion) in 1901.
Carnegie and co took advantage of breakthroughs in the use of oil, steel, electricity, telegraph and railroads to build their businesses. Labour was cheap and US GDP soared, doubling in the 1880s alone. Their conglomerates also benefited as monopoly suppliers of goods.
Industrialists and their affluent friends liked to flaunt their wealth. One woman hosted dinner parties for her dog, to show off its diamond-encrusted collar. The New York Riding Club regularly convened at exclusive restaurants for horseback dinner parties.
The behaviour of the wealthy was distasteful. But the wealthy industrialists earned the nickname of “robber barons” because of their exploitation of workforces, enlarged by mass immigration.
In those days, a clear majority of workers – employed or otherwise – lived below the poverty line. As anger spread, trade unions toyed with socialism and strikes multiplied, leading to the destruction of property.
Troops were brought in to keep the railroads moving. Thomas Scott of the Pennsylvania Railroad showed little pity for his workers, saying they should be given "the rifle diet for a few days and see how they like that kind of bread”.
The Gilded Age saw no less than 10,000 strikes or lockouts. The depression of 1893 intensified hardship and anger. The payment of bribes to politicians through successive scandals, such as Credit Mobilier, undermined the reputation of senior politicians with snouts in the trough.
It was not until after the turn of the century that a new generation of progressive politicians, led by Theodore Roosevelt, got a grip. A series of reforms, including an income tax, calmed the population. Women's rights started to be recognised. A move towards prohibition began. The steadily improving US economy did the rest of the heavy lifting.
Andrew Carnegie became the father of US philanthropy by giving away his wealth. He said: “He who dies rich, dies disgraced.” Over the last 30 years, people have made their billions from new forms of technology, finance and energy. Just as the railroads opened up the US, the capital markets have made it easy to grow, and sell, successful companies across the world.
Just as the top 1% of the US population once yearned to be millionaires, the current crop find it hard to consider rubbing along on anything less than $1 billion. As was the case in the 19th century the wealthy tend to mix with each other, rather than society.
In her new book Plutocrats Chrystia Freeland talked to a billionaire who said the “top 1% probably contributes more to making the world a better place than the 99%”.
Maybe so, maybe not. It is certainly fair to say that many deserve credit for developing their family businesses. Many, led by Bill Gates, founder of Microsoft, have agreed to self-tax themselves by getting stuck into philanthropy. Others, however, match their good fortune with greed.
Few of them see much reason to pay tax, even though taxpayers effectively underwrote their bottom line by propping up the financial system during the credit crisis.
Several of the world’s most powerful technology companies, for example, are taking full advantage of lax rules to pay very little tax in the UK.
California governor Jerry Brown is proposing a local referendum, called Proposition 30. He says schools will have to close unless Californians vote in favour of a temporary tax on the rich. But 44% of voters, and rising, oppose the measure.
Republican presidential candidate Mitt Romney is determined to keep taxes down, even though he's got by some calculations a $1 trillion black hole in his budget – not the kind of approach wealthy types would favour at their own businesses.
A US campaign called Fix the Debt wants to see tax reform, plus limits on spending, to bring down the budget deficit. Leaders of several large businesses have supported the initiative. But signatories from the new generation of technology, finance and energy companies are few.
If you put the behaviour of the wealthy to one side, however, there is a key difference to the Gilded Age in the US. Despite several years of hardship, levels of poverty are not extreme.
The US has effectively maintained sufficient levels of welfare since the Roosevelt era to stop discontent getting out of the control. The poor may not care for overt displays of wealth but they can afford to eat and that’s the bottom line.
In his book Thinking Fast and Slow, Daniel Kahneman points out how severe poverty amplifies the levels of misfortune felt by individuals.
He points to a poll of 450,000 individuals conducted by Gallup, which showed a single headache increased the proportion of affluent people experiencing sadness and worry from 19% to 38%. The poorest tenth of society saw an increase from 38% to 70%.
If you want to see societies in greater stress, you need to travel to places where economies are insufficiently strong to buy off dissent.
The Arab Spring, which swept away several established regimes in the Middle East, reflected the anger felt by impoverished people, whose hunger fuelled street riots following a rise in food prices. Their disgust at local corruption provided them with a rallying point.
The New York Times has just run a story alleging the family of Chinese leader Wen Jiabao is worth a cool $2.7 billion. The Chinese government not only denied the story but, unusually, threatened legal action. The Chinese are keen students of history – Gilded Age included. They are only too aware that a large number of their citizens are on the poverty line and could turn angry if given a good excuse.
Students of the Gilded Age will be more concerned by austerity in Greece, which is now causing real anger on the streets. Following salary cuts, many members of the middle class are being forced to forage for their food. Neo-fascist parties are on the rise.
Local people are disgusted at the trial of a Greek editor who published the names of 2,000 wealthy people who avoided tax by putting money in a branch of HSBC in Switzerland. They think the 2,000 should be punished instead. Really serious discontent from this, or a similar event, is virtually certain.
In Sicily, unemployment is double the level elsewhere in Italy. Rising anxiety levels have been inflamed by local political corruption. A fringe party called the Five Star Movement, led by Beppe Grillo, is packing out the piazzas of Palermo, campaigning against government “parasitism”.