>And it really is as simple as that.

It really isn't, because your "simple" comparison is bunk. For one, it's measuring stock vs flow. Stock prices measure stock, eg. the size of a piggy bank. Salaries measure flow, eg. your annual salary. Directly comparing the two results is meaningless. It's easy to demonstrate this with the piggy bank example. If your salary was 50k/year, you saved 5k/year, then your piggy bank would be growing much faster than your salary growth, but it doesn't say much about the economy, or whether you could quit your job or not. In fact, if you started with $0 in savings, your piggy bank growth would be infinite, which really shows how absurd stock vs flow comparisons can be.

Moreover stock prices incorporate a variety of factors that are irrelevant to wealth distribution. Low interest rates makes stocks more valuable by reducing the future discount rate, and corporate consolidation makes stock indices go up, but neither of those factors directly affect inequality. For instance, a simple DCF model would value a company with earnings of of $1/share/year at $16.67/share if the risk free rate was 6%, but $33.33/share if interest rates were at 3%. However it's unclear whether such drop in interest rates would double inequality, as a direct comparison would imply. After all, most people hold on to debt (eg. mortgages) as well savings.

Feel free to look at dividend yields, but I can pretty much guarantee that it has not halfed in the period the stock market doubled. Most likely it stayed relatively flat, somewhere between 1.5% and 2%.

So if you had 100 million you would get 1.7 million as dividend 5-7 years ago, now it's roughly doubled, without selling any of your stocks.

Not that it really matters. Given how much faster the stock market grows compared to salaries you can sell a few percentages of your wealth every year, and still get richerer by doing nothing besides owning.

If you want a flow, here you go: https://fred.stlouisfed.org/series/A053RC1Q027SBEA

Corporate profits in the U.S. have almost doubled since 2019.

It's not quite as bunk as that. If you take the time-derivative of the stock price it becomes a flow, and as stock prices are approximately exponential, the growth rate will be half of what it is today at approximately the same time range that the value itself was half of what it is today. (Obviously, with a lot more noise added).

Good point. Doubling in 7 years means around 10% growth per year. So, if someone took out 10% of their stock nest-egg per year, it wouldn't have grown at all.

Having said that, GP does illustrate Picketty's point in Capital in the Twenty-First Century that r>g, that is return on capital is greater than economic growth, and Picketty did theorise that this would inevitably lead to concentration of wealth (unless war or other calamities reset the scale).

At the risk of being pedantic, is a "piggy bank" really the right metaphor for this? A piggy bank has actual money within it, regardless of what I think of the piggy bank, it still has money within it. While a stock's total market cap technically only represents the last transaction price multiplied by the number of outstanding shares (kinda). Anyway, just making the point that it isn't like a "bank" in that there is not money in a container of any sort (obviously, banks lend out their own deposits so even my correction is also wrong).

I'm don't have anything better to replace it with, but I am just questioning the "piggy bank" as a metaphor here.

> Moreover stock prices incorporate a variety of factors that are irrelevant to wealth distribution.

This handwaves away the most important fact w.r.t. stocks and wealth distribution, which is that wealthy people own stocks and poor people don't. A whopping 38% of Americans don't own any stock.

Isn't the point still valid if you consider just the return on capital? If the market cap of the S&P500 was about 18 trillion in 2015 and returns 10%, the income going to to the owners of that capital is 1.8 trillion. In 2025 the market cap is 53 trillion, and a 10% return is then 5.3 trillion. That's an increase of almost 300%.

Now if the average salary was 48,000 in 2015 and there were 150 million people employed in the us, that's 7.2 trillion. The 2025 average is about 66,000 with 160 million employed. That's about 10 trillion. Around 40% increase in income going to labor. Am I missing something?

People who have less flow and no stock can increase their savings less than those with stock and the same flow. Many are not able to save at all. Those without stock receive only flow. Those with stock receive both flow and stock, and those with more stock profit more from rising stock.

So the relationship between stock and “flow” is absolutely relevant if we want to understand wealth inequality, because the working class primarily receives money through wages (most of it going out to pay for things such as basic necessities), with the ownership class accruing profit that they receive by virtue of ownership.

Another way to say that is comparing velocity to distance traveled is not meaningful.