American exceptionalism? The growth of income and wealth inequality in the United States and other Western societies

Abstract

The two central questions in this paper are: 1) How to explain the tendency of increasing income and wealth inequality in Western societies since the 1980s? 2) Why is this tendency particularly strong in the USA? It is argued that income and wealth differences in general have increased as a function of growing power differences within national states, which is related to the strengthening of international interdependencies. The particularly strong increase of inequality in the USA is explained as the result of the dynamics of American politics, the history of ethnic and racial dividedness, and the pervasiveness of the individualistic-meritocratic ethos. The question is discussed as how to combine these different explanations. It is concluded that the three conditions that together may explain the ‘American exception’ can be interpreted in terms of the power-interdependence model that is used to explain the overall trend of rising inequality.