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01 / 05
Lifting the Bottom: How Western Economies Are Growing Fairer and Richer

Blog Post | Income Inequality

Lifting the Bottom: How Western Economies Are Growing Fairer and Richer

The headlines and the data disagree on inequality.

Summary: Despite widespread concern about rising inequality, a more complete look at the data reveals a different story: wealth in Western countries has grown more broadly shared than many believe. Rising homeownership, pension savings, and improved living standards suggest that economic growth has benefited the broader population, not just the elite. To promote continued progress, policymakers should focus on expanding opportunity and lifting the bottom.


Rethinking the Inequality Story

It is easy to get the impression that inequality in Western societies is out of control. Media and social platforms tell us that billionaires are soaring ever higher while the middle class is disappearing and democracy is under threat. These concerns feel real, especially with expensive housing, rising tech fortunes, and gaps in public services exposed during the pandemic.

But these narratives often rely on narrow or incomplete data. When we consider all the pieces—taxes, transfers, pension rights, homeownership, and people’s changing income over their lifetimes—the picture is more balanced. Western societies are not as unequal as many fear.

This doesn’t mean we should ignore inequality. Some people still live in deep poverty, and extreme concentrations of wealth can distort both markets and politics. But to shape the right policies, we must start with the right facts. Mistaken beliefs lead to harmful solutions—like high wealth taxes and bloated public sectors that risk doing more harm than good.

Instead, we should aim to grow the economic pie while ensuring that its benefits are widely shared. The best way to do this is by lifting the bottom—helping more people build personal wealth and take part in prosperity.

What the Numbers Really Show

The most famous story about inequality comes from economist Thomas Piketty’s “U-shaped curve”: inequality was very high in the early 1900s, dropped after the World Wars, and then rose again after the 1980s. It seems backed by the rise of tech billionaires, stagnant wages for many, and the top one percent’s growing share of pretax income.

But Piketty’s view leaves out several important things. Starting in 1980 is actually misleading. That was a time of unusually low inequality, due to high taxes and strict rules that discouraged risk-taking. Compared to the early 20th century, today’s inequality is far lower. The previous narrative mostly ignores taxes and welfare. Looking only at pretax income misses how taxes and public spending reduce inequality—especially in healthcare, education, and pensions. Finally, it misreads wealth data. Many studies overlook middle-class assets like home equity and pension savings, which are huge stores of personal wealth.

More complete data paints a different picture. Economists Gerald Auten and David Splinter, for example, show that when you account for unreported income, retirement savings, and government benefits, income inequality in the U.S. has barely changed since 1960. And in Europe, the trend is even flatter.

Mass Wealth, Not Mass Disparity

A closer look at household wealth shows some surprising results.

Firstly, private wealth has risen sharply across the West since 1950. But importantly, this growth has been shared. Most wealth is now held in homes and retirement accounts—not in elite corporate shares. Today, 60–70% of households in Western countries own their homes, and most workers have pension savings in funds that track the stock market. This is financial democratization.

Secondly, wealth is less concentrated. In Europe, the richest 1% now hold only about one-third of the wealth share they had in 1910. In the U.S., there has been an uptick since the 1970s, but even there, wealth concentration is closer to its 1960s level than to the early 20th century. The most recent data show that U.S. wealth inequality has actually fallen slightly since the mid-2010s. Thus, the main story is not growing inequality, but growing ownership.

Thirdly, mobility matters. People move between income brackets over their lifetimes. Many in the bottom 10% today won’t stay there long, and some at the top may fall due to job losses or market changes. Also, pension rights and welfare reduce inequality further. For instance, in Sweden, counting public pensions cuts measured wealth inequality nearly in half. In the U.S., if we add Social Security and employer-provided health insurance, middle-class living standards look far better than raw income data shows.

Success at the Top Can Lift Everyone

Some worry that billionaire success is a sign that the system is rigged. But often, these fortunes reflect broad economic growth. Tech giants, for instance, didn’t just enrich their founders—they created jobs, boosted productivity, and expanded the tax base.

Since 1980, life expectancy in advanced economies has increased by six years. High school completion has become nearly universal. Goods once considered luxuries—like personal computers—are now common. These are signs of a system that has lifted the bottom even as some at the top thrived.

Growth matters not just for individuals, but for public finances. Every percentage point added to GDP generates billions in tax revenue. That supports schools, hospitals, and infrastructure. Policymakers should focus on policies that both grow the pie and spread its gains—such as promoting homeownership, making retirement saving easy and cheap, and keeping financial markets open and competitive.

Smarter Taxation and Sensible Policy

Some are now calling for new taxes on wealth, including proposals discussed by the G-20 and the UN. But these taxes are problematic. They often fall on assets that are hard to sell, like private businesses or farms, forcing owners to take on debt or sell prematurely. In Scandinavia, wealth taxes were tried and largely abandoned—they raised little money, were expensive to manage, and drove capital abroad.

A less worse, though far from ideal way to tax capital is through its income: dividends, capital gains, and corporate profits. This approach is more efficient, and it doesn’t punish people for owning assets.

Don’t Misdiagnose the Problem

Focusing too much on inequality can distract from real challenges: slow productivity growth, aging populations, and the costs of adapting to climate change. These issues will require investment and innovation—both of which depend on a healthy private sector.

Overreacting to inequality can also be regressive. Taxing housing wealth, for example, may hit retirees who are rich in assets but poor in cash. Heavy taxes on small businesses might force them to sell to multinational corporations with easier access to credit.

Mistrust also grows when people are told that only the elite benefit from capitalism—even when their own lives are improving. That opens the door to populist promises that often worsen the situation.

A Balanced Agenda for the Future

I believe that unchecked wealth concentration can hurt democracy. But the solution is not to attack wealth itself. It’s to build systems that let more people share in success.

Governments should:

  • Support entrepreneurship by cutting red tape
  • Keep labor taxes low to encourage work and saving
  • Focus public spending on giving people the tools to succeed—especially through education and infrastructure
  • Make it easier for households to build personal wealth

This is not a call for total laissez-faire nor for extreme equality. It is a recognition that the most important achievement of Western economies is the broad rise in living standards—not the fortunes of a few billionaires, but the everyday comfort of millions whose grandparents lived without antibiotics, central heating, or higher education.

Before declaring a crisis, policymakers should double-check the data. And they should keep doing what works: protecting markets, encouraging wealth-building, and lifting the bottom.

Banco Bilbao Vizcaya Argentaria | Charity & Aid

1.1 Million Mexicans Lifted Out of Poverty Thanks to Remittances

“During the first nine months of 2025, remittances to Mexico totaled 45,681 million, 5.5% less than the 48,360 million received during the same period in 2024.

Despite this decrease, remittances increased in several states in the central-southern region during the first nine months of the year, notably Chiapas (+1.2%), Oaxaca (+2.0%), Puebla (+1.9%), Guerrero (+4.2%), Veracruz (+0.9%), and Morelos (+1.3%).

1.1 million people in Mexico have been lifted out of multidimensional poverty thanks to remittance transfers. If remittance income is not included in the 2024 measurement, the population living in poverty in Mexico would increase from 38.5 million to 39.6 million people.”

From Banco Bilbao Vizcaya Argentaria.

Blog Post | Pollution

From Waste to Wealth: the Alchemy of Innovation

Environmental challenges can be transformed into economic opportunities.

Summary: Scientists and engineers are finding ways to turn pollution and waste into valuable resources. From recovering fertilizer from toxic lakes to creating biodegradable packaging from farm residues, innovation is transforming environmental problems into opportunities for growth. By reimagining waste as a resource, we can make the planet cleaner while fueling new industries and jobs.


Every summer, toxic algae blooms turn Lake Erie and other US lakes into a green soup, threatening drinking water for millions. Every year, American farmers burn millions of pounds of grain stalks after harvest. And every day, Americans throw away enough packing peanuts to fill an Olympic swimming pool. What if I told you that each of these waste streams could become valuable resources—and that the solutions are emerging from university laboratories right now?

We stand at a unique moment in history. For the first time, we possess the scientific tools to transform our most pressing environmental challenges into economic opportunities. The numbers tell a compelling story. According to the World Bank’s “What a Waste 2.0” report, global waste is projected to rise by 70 percent, from 2.01 billion tons today to 3.4 billion tons in 2050. Yet, the circular economy, or using waste productively to create wealth, could unlock $4.5 trillion in economic benefits by 2030. The question isn’t whether we can afford to innovate—it’s whether we can afford not to.

Three Breakthrough Innovations from North Dakota

The convergence of nanotechnology, materials science, and biotechnology has created unprecedented possibilities for environmental remediation. In a laboratory at North Dakota State University, my research team is developing three innovations that exemplify this waste-to-wealth transformation:

  1. Calcium peroxide nanoparticles that absorb phosphates from polluted lakes and convert them into sustainable fertilizer
  2. Flax-fiber composites that transform agricultural waste into biodegradable packaging materials
  3. Starch-based foam alternatives that replace petroleum-based packing peanuts with compostable materials

These aren’t pie-in-the-sky concepts. They’re practical solutions that could scale from our Fargo lab benches to global implementation within a decade. Here’s how each one works—and why they matter.

Turning Lake Poison into Farm Food

Over 500 “dead zones” now plague our planet’s bodies of water, with the number doubling every decade since the 1960s. These oxygen-depleted areas, caused primarily by phosphate runoff from agriculture, cost the United States $2.4 billion annually in economic losses. The 2014 Toledo water crisis, which left half a million people without access to drinking water for three days, was just a preview of what may come unless we act.

Here’s where nanotechnology can change the game. At our NDSU lab, we’re developing calcium peroxide nanoparticles—imagine particles 5,000-times smaller than the width of a human hair—that act as molecular sponges for phosphate pollution. When deployed in eutrophic (nutrient-rich) lakes, these nanoparticles serve a dual purpose that borders on alchemy: First, they absorb phosphates from the water with an efficiency 500-times greater than conventional materials; second, they slowly release oxygen over 30 days, breathing life back into suffocating bodies of water.

But here’s the truly exquisite part: Those absorbed phosphates don’t disappear. Our research team harvests them to create sustainable fertilizer. Consider the irony—the very phosphates that are killing our lakes came from fertilizer runoff, and now we’re capturing them to make new fertilizer. It’s the circular economy in its purest form.

The timing couldn’t be more perfect. The global phosphate fertilizer market, currently valued at $72 billion, is facing a sustainability crisis. Morocco controls 70 percent of the world’s phosphate rock reserves, and at current extraction rates, most of these reserves will be depleted within a century. By recovering phosphates from water pollution, we’re not just cleaning lakes, we’re securing agriculture’s future. Our preliminary calculations suggest that phosphate recovery from US agricultural runoff alone could replace 15 percent of imported phosphate fertilizer, saving farmers billions while restoring water quality.

From Farm Waste to Amazon Packages

The second innovation transforms an agricultural nuisance into packaging gold. North Dakota grows 90,000 acres of flax annually, primarily for the valuable oil in its seeds. But after harvest, millions of pounds of stalks are typically burned or buried, a waste of remarkably strong natural fibers that have been used for over 30,000 years for textiles, food, paper, and medicine.

At our NDSU lab, we’re extracting these fibers and mixing them with biodegradable polymer matrices to create packaging materials that rival petroleum-based plastics in performance while completely biodegrading in three to six months. The resulting composite materials achieve tensile strengths of 50–70 megapascals—stronger than many conventional plastics—using 35 percent less energy to produce.

The market is hungry for such solutions. The biodegradable packaging sector is experiencing rapid growth, projected to reach $922 billion by 2034. More important, consumers are voting with their wallets: 82 percent say they’ll pay premiums for sustainable packaging, and 39 percent have already switched brands for better environmental practices. Major corporations aren’t waiting. Dell already uses mushroom-based packaging grown on agricultural waste, while IKEA has committed millions of dollars to eliminate polystyrene entirely.

North Dakota sits on a gold mine of opportunity. The state’s two million acres of various crops produce enormous volumes of agricultural residue. By viewing these stalks, husks, and shells not as waste but as industrial feedstock, North Dakota could become a hub for sustainable packaging materials. A single processing facility could create 200 rural jobs while generating $50 million in annual revenue from materials currently worth nothing.

Replacing Satan’s Snowflakes

The third innovation addresses what some environmentalists refer to as “Satan’s snowflakes”—namely, those infuriating polystyrene packing peanuts that seem to multiply in your garage and never decompose. Americans generate enough polystyrene waste to circle the Earth in a chain of coffee cups every four months. This material persists for 500 to one million years, breaking into microplastics that contaminate our food chain.

In our NDSU lab, we’re developing starch-based foam alternatives using corn, wheat, and potatoes, all crops that North Dakota grows in abundance. These “bio-peanuts” dissolve completely in water, compost within 90 days, and require just 12 percent of the energy needed to produce traditional polystyrene. They even eliminate the static cling that makes unpacking electronics feel like wrestling an electric eel.

The economics are compelling. Companies such as electronics retailer Crutchfield report saving $70,000 to $120,000 annually in freight costs after switching to lighter, bio-based packing materials. With 11 states and 250 cities already banning polystyrene foam, and the European Union implementing strict regulations on single-use plastics, the market for alternatives isn’t only growing, it’s becoming mandatory.

Perhaps the most profound impact is psychological. Every online purchase delivered with biodegradable packing materials sends a message: Modern conveniences can be maintained without mortgaging the environment. While a small victory, such progress is building momentum for larger, more significant changes.

The Scaling Potential: From Lab to Global Impact

The opportunity is enormous: If just 10 percent of US agricultural waste were converted to packaging materials, it would replace 33 million tons of petroleum-based plastics annually. If our phosphate recovery technology were deployed in the 100 most-polluted lakes globally, it could recover enough phosphorus to fertilize five million acres of farmland while restoring recreational value worth $10 billion.

These aren’t distant possibilities—our NDSU innovations are progressing through the typical stages: proof of concept, pilot testing, demonstrations, and commercialization. We’re currently in pilot testing, with plans for field demonstrations next year. Industry partners have expressed strong interest, particularly from agricultural cooperatives seeking value-added opportunities for crop residues.

Innovation Beats Despair: Lessons from Environmental History

Some critics might ask, “Aren’t these solutions just Band-Aids on the gaping wound of industrial civilization?” Such a question, however, misses the profound lesson of environmental history. Every major pollution crisis we’ve faced, from London’s killer smog to acid rain and the ozone hole, seemed insurmountable until human ingenuity proved otherwise.

Consider the track record. Since 1970, the United States has reduced major air pollutants by 78 percent while increasing gross domestic product by 321 percent. The Montreal Protocol has eliminated 99 percent of ozone-depleting substances, saving approximately two million people from skin cancer each year. Acid rain, once predicted to cost $6 billion annually to address, was solved for less than $2 billion per year. These victories weren’t achieved by abandoning modern life but by making modernity cleaner and more efficient.

The same patterns are emerging in clean technology. Solar panel costs have plummeted 90 percent in the past decade. Renewable energy is often among the lowest-cost power sources, especially when comparing marginal generation costs. When accounting for storage or backup needs, however, total system costs can vary by region and grid mix. Battery prices have decreased by 97 percent over the past 30 years. Each follows Wright’s Law—costs decline predictably as production scales. Our NDSU waste-to-resource innovations will follow similar trajectories.

The investment community recognizes this potential. Clean technology attracted $1.8 trillion in investments globally in 2023, surpassing fossil fuel investments for the first time. The bioeconomy, currently valued at $4 trillion, is projected to reach $30 trillion by 2050. These aren’t charitable donations, but rather hard-nosed bets on profitable technologies that happen to benefit the planet.

From Lab Bench to Marketplace

Numerous university spin-offs have traveled the well-worn path from laboratory to marketplace. Companies such as Membrion (ceramic membranes developed at the University of Washington) and Integricote (nanocoatings developed at the University of Houston) demonstrate that academic innovations can achieve commercial success while addressing environmental challenges.

The Optimistic Imperative

The waste crises facing our generation are real and urgent—but so is our capacity to transform them into opportunities for prosperity. The toxic algae choking our lakes could become tomorrow’s sustainable fertilizer. The agricultural waste burning in our fields could become the packaging protecting tomorrow’s e-commerce deliveries. The petroleum-based foams polluting our oceans could be replaced by materials that harmlessly dissolve back into the earth.

This transformation, however, won’t happen automatically. It requires continued investment in research, supportive policies that incentivize innovation over incineration, and entrepreneurs willing to scale laboratory successes into industrial realities. The trajectory is clear: Waste is becoming wealth, pollution is becoming profit, and environmental restoration is becoming economic opportunity.

From my lab bench in Fargo, I see a future in which every environmental challenge sparks a thousand innovative solutions, every waste stream becomes a value stream, and the same human ingenuity that created these problems engineers their solutions. That’s human progress at its finest.

Center for Global Development | Poverty Rates

Latin American Poverty Drops by Nearly Half in 20 Years

“Poverty in the region [of Latin America] has dropped by nearly half over the past 20 years, from 58 percent in 2003 to 30 percent in 2023, equivalent to a decline of 28 percentage points (Figure 5A). Argentina, Chile, the Dominican Republic, and Brazil have experienced the most significant reductions in poverty during this period, with decreases between 31 and 61 percentage points. The trend is downward in all but three countries. In Guatemala and Honduras, poverty has remained roughly constant over the available data period. Venezuela is the only country where poverty has increased overall, from 65 to 71 percent during this period.”

From Center for Global Development.

World Bank | Poverty Rates

Tajikistan’s Remarkable Poverty Reduction over past Decade

“Over the past decade, Tajikistan has achieved a remarkable poverty reduction, with the national poverty rate dropping from 56 percent in 2010 to just below 20 percent in 2024.

During the same period, the share of middle-class households — defined as those living on more than $15 per person a day — quadrupled from 8 to 33 percent, signaling profound improvements in living standards.”

From World Bank.