The Great Marginalization: Why Twentieth Century Economists Neglected Inequality

Since Thomas Piketty’s work took the economics discipline by storm in 2014, the
study of economic inequality has quickly moved to the center of academic inquiry for the first time since the nineteenth century. But why was the topic of inequality and distribution largely neglected by mainstream economists for much of the twentieth century? In examining key economic treatises and textbooks, this paper argues that it was the hegemonic rise of neoclassical economics which effectively marginalized the issue of economic distribution in the twentieth century. It contends that three central theoretical pillars were most responsible for this development: marginal productivity, a utility theory and Pareto optimality.