ABSTRACT
This chapter explains what inequality is and what the authors know about it. Equally, given the propensity on the part of high-income earners to be less frank about their earnings, it is possible that the official sources of data understate the extent of income inequality. The chapter suggests that the dominance of economists in thinking about income inequality means that the authors get some useful descriptions of inequality, but not much in the way of explanations. It is extraordinary that they must look in vain for any explanation of why income inequality is a persistent and deep feature of a modern market-based society. Ian Castles argued that the strong similarities between income inequality in Australia, Sweden, New Zealand, the United States and the United Kingdom suggested that different welfare and tax systems seemed to have little impact on the patterns of income inequality.
