09/15/2019

The functions of wealth: renters, owners and capitalists across Europe and the United States

Piketty (2017) argues in favor of a multidimensional and relational approach to the
analysis of wealth inequality. Speci cally, he suggests that social classes should be ana-
lyzed in terms of the power and production relations between social groups, not just the
percentiles in statistical distributions into which various groups fall. We propose such
a relational approach by focusing on di erent functions of wealth. We operationalize
functions of wealth by empirically analyzing the groups of renters, owners, and capital-
ists. Employing recent European and US data, we nd that classifying households based
on these decisive functions of wealth aligns well with the wealth distribution, in ways
that vary considerably across countries. We discuss many potential advantages of this
class typology in measuring and analyzing wealth and wealth inequality in particular.

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