Inequality as a brake on technological progress, productivity and growth

6 1 Link between inequality and technology This chapter reviews the state of the art on inequality and technology and the causes and the consequences of their intersection. In particular, the determination and the development over time of technology and inequality are introduced in paragraph 1.1. In paragraph 1.2 the connection between inequality and wage distribution is shown. In conclusion, the impact of inequality on technology is highlighted in the last paragraph with some details on the opposite side of the relation. 1.1 Definition and evolution of inequality and technology over time Before proceeding to expound inequality and technology and to discuss their recent trends and their particular kind of relationship, let us recall some reason why it is important to study inequality. First of all, the point must be made very clearly that equality has an ethical value. It is a concept devoid of mere quantitative calculation, closely related to humanity, solidarity, social inclusion and the fair reallocation of scarce resources. At the same time, the economic rationale cannot be ignored: the importance of high-income brackets, wealth acquired through inheritance, functional distribution of income between capital and labour have led to a structural transformation of the economic system (Pianta, Franzini, 2016). Furthermore, the definition of the element on which the whole analysis revolves, inequality, is complex and may differ in relation to the variable taken as a benchmark (income, consumption, wealth, capabilities and happiness). Each of these focal variables has several advantages and drawbacks in the study of inequality and their choice depends on the research question. Most of them are quite difficult to be measured, especially in international comparisons, due to methodological complexities and data limits. Income is the monetary or non-monetary flow of a stock of wealth and, given the objective of this