After the Robber Barons

At the NYT:

What is the explanation? In all of these cases, the causal mechanism is the same: Unregulated capitalism generates both rapid growth and burgeoning inequality.
In the absence of legal channels for influencing policy, such as the lobbying and campaign contributions in the United States, such attempts manifest themselves as corruption. That was true of the American Gilded Age, and it is true of the BRICs now.
Is it fair to say, then, that corruption and inequality are natural byproducts of the early stages of market-based capitalism? A superficial survey of history, from Bismarck’s Germany to Japan after World War II to East Asia in the 1970s and 1980s, seems to bear this out. Indeed, this might come to be accepted as a social-science theory, like the Kuznets curve, which shows that inequality first rises and then falls with the level of development. It could, in fact, be part of the explanation for this phenomenon.
The American experience also suggests a corollary proposition. Excessive corruption and inequality, by corroding the political process, threaten to delegitimize capitalism and the market system and so create pressures for reform and the redistribution of wealth that then temper the incentive-driven impetus to capitalist growth, which caused the inequality in the first place.

The necessity for redistribution and social policy thus becomes a mechanism for the system to correct itself. In the United States, it took the better part of the half-century preceding World War II for this to occur. The worst excesses of capitalism were reined in only when a middle class backlash led to legislative change, regulatory reform and anti-corruption rules.

The Upper Crust might want to keep this in mind.  If things turn back down, it may be hard to continue to convince the rubes in the Republican Party that it is liberals who are screwing them.