It was the era of globalisation with unfettered movement of capital across international borders and deregulated domestic industries. The political leadership of Ronald Reagan in the US and Margaret Thatcher in the UK led to a resurgence of faith in the self-regulating forces of markets and led to a spate of asset redistribution from the State to private capital through deregulation and privatisation.
However, by around 1980, the propertied classes of the United States of America and Europe had begun to get anxious about the role of the welfare State and its implications on distributional outcomes in the long run. This was also the period when the old imperialist nations were exiting their colonies and a new set of nation states were emerging in Asia and Africa. Hence, during the period, 1914-1980, there was a discernible decline in inequalities across the world.
The two World Wars, the Great Depression, and the Russian Revolution changed the nature of State policies and brought about an urgency to rebuild broken economies and bring a degree of stability to the institutions of market capitalism. Despite these changes, the degree of wealth and income inequalities were very high by the beginning of the twentieth century.
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