ABSTRACT
Globalisation and industrialisation brought fundamental changes to the distribution of income and wealth. Organisational innovations such as trade unions emerged, aiming to reduce inequalities. This chapter focuses on economic inequality in the narrow sense, that is, on the structure of factor incomes and the distribution of income and wealth. The trajectory of the Williamson index can be divided into two periods. The index falls from 1860 to the mid-1870s and then, after fluctuating for a decade without trend, shows a marked increase towards the end of the century. The picture is much clearer for the second phase of German industrialisation, which began around 1870. The evolution of economic inequality from the mid-nineteenth century until World War I is best understood against the background of radical structural change. The Lewis model of economic development assumes an agricultural rural sector and a modern industrial urban sector.
