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This paper reviews the trends in income inequality over the last 40 years, and proposes a new explanation for their evolution – that it is hoped will be tested empirically by many studies in the years ahead – to see whether the observed increases in inequality of the last four decades have been caused by an aggravation of its traditional causes (such as land an human capital concentration), or by a widespread increase in instability in five key areas affecting inequality, the Human Development Index and human capabilities. The five areas where a sharp increase in instability has been observed concern: (a) the financial sector; (b) industry 4.0, especially the development of robotics and artificial intelligence; (c) diseases such as ebola, aids and covid; (d) number of conflicts and (e) a growing environmental crisis. A key unanswered question in the above proposed overall explanation is whether these five crises are interconnected and whether there is a  primum movens  that explains this series of problematic events.

Inequality and Capabilities in an Era of Rising Instability