ABSTRACT
The problem stated in this chapter is that from an economic perspective, we are accustomed to thinking that increased labour productivity will reduce inequality and increase earned income. New research has shown that neither of these assumptions is correct at the dawn of the Fourth Industrial Revolution. Put simply, this means that those who own capital will, as time goes on, become richer and richer compared with everyone else.
The question investigated in this chapter is as follows: What is promoting extreme economic inequality?
The following factors are promoting extreme economic inequality: the free market, the ideology disseminated by the ‘men in suits’, free trade, and free competition. These findings are a paradox to existing economic theory, and as such they are original and innovative. On the basis of this paradox, a new theory is emerging: the theory of innovation economics.
We also summarize a policy for greater economic equality in five magnitudes.
