This talk offers a new perspective on the role of capital in Western economies, examining wealth generation and inequality over 130 years. It highlights three central facts. First, the world is significantly richer today than it was a century ago. Household assets, adjusted for inflation, have increased substantially. The value of wealth relative to national income has returned to pre-World War I levels, indicating a more even distribution aligned with macroeconomic models. Second, the 20th century witnessed the democratisation of wealth. Once concentrated among the wealthy in agricultural and corporate assets, it is now more evenly distributed due to higher education, better incomes and policies that encourage home ownership and retirement savings. Property and pension savings are now the main forms of household wealth. Third, the concentration of wealth has declined markedly over the past 100 years, a trend called the "Great Wealth Equalisation". In Europe, inequality fell dramatically until the 1970s and has remained low since then. In the US, the fall was less pronounced, followed by a rise until the 2000s.

These findings challenge the idea that unregulated capitalism inevitably leads to extreme wealth accumulation and that wars and progressive taxation were the main equalisers in the 20th century. Instead, it was political and economic institutional changes that allowed workers to participate in market expansion, buy homes and save for retirement. Future research should focus more on the role of historical institutional change in understanding long-term trends in wealth accumulation and inequality in the West.

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