Economic theory says inequality will rise as international trade grows

Ever since Thomas Picketty published his magnum opus on inequality there has been a great deal of hand-wringing, dismay, alarm and call for action. Broadly, there is a universal refrain “we must do something.”

But no one really knows what exactly to do because Robin Hoodism — robbing the rich to pay the poor — isn’t consistent with either democratic ideals or trust in government. It is easy to call for expropriation by confiscation or taxation but there is no real evidence that this actually works.

There is a very good reason why the highly laudable objective, of greater economic