Wealth inequality is grossly overstated

We are continually told that wealth inequality is of horrendous scale and something we must do something about. This claim fails on two counts.

The first is a point we make much of around here, that we use the wrong measure of the wealth distribution. We measure market inequality, rather than the only important type, that which exists after all the things we do about inequality in general. We must, if we are to gain any useful information, measure after the effects of taxes, benefits, state provided services and so on, not before. For, obviously enough, such redistribution greatly changes the wealth distribution.

But it’s also wrong for another measurement reason. We don’t even count, at all, the major form of wealth today, human capital. From the ONS:

The value of the UK’s real full human capital stock, or the human capital of the employed and the unemployed, was £21.4 trillion in 2018.

This human capital was much more equally distributed than the financial capital - or household wealth - that so much fuss is made over. And that household wealth is some £12 trillion too.

Two thirds of the country’s capital isn’t even being counted, that two thirds being much more equally distributed than the one third that people whine about so bitterly.

Shouldn’t we start at the beginning again and actually measure wealth correctly before we try to decide what, if anything, we’re going to do about who has it?