Sir Tony Atkinson: The Economist who had the measure of inequality, Canberra Times, 4 January 2017
If you've ever referred to ‘the 1 percent’, you're using the work of Tony Atkinson. Tony, who died on 1 January, aged 72, contributed as much as any modern economist to the study of poverty and inequality.
When I first met Tony in the early-2000s, I was struck by the contrast between his exalted status and his willingness to engage with a mere PhD student. He was the head of Oxford's prestigious Nuffield College, and had recently been knighted by both the British and French governments. It always made me smile when I thought that the only ‘Sir’ I knew was my inequality coauthor.
Trained originally as a mathematician, Tony could crunch numbers with the best of them. But like Adam Smith and John Maynard Keynes, he recognised the importance of economics being grounded in history and politics. He was generous to intellectual predecessors like his Cambridge teachers James Meade and Joan Robinson. When we worked together on the antipodes, he made sure that our articles acknowledged the groundbreaking work of Australian researchers like Timothy Coghlan and Colin Clark.
Tony's interest in poverty and inequality was piqued in the 1960s, when he worked with deprived children in Hamburg, Germany. Over the next five decades, there was virtually no aspect of the field that he left untouched. He created his own inequality measure (the Atkinson Index), devised a novel technique for estimating wealth inequality from inheritance data, and shook up public finance through his work on optimal taxation with Joseph Stiglitz (who would go on to win the Nobel Prize).
At the same time, he moved through a range of British economics departments, including University College London and the London School of Economics. As a UK economist once remarked to me, he seemed to leave each department friendlier and more collegial than it had been when he arrived.
Amidst it all, Tony made major contributions to policy. He once told me the story of how he'd built the first computer model to analyse a British budget, and surprised the Thatcher Government by helping the Labour Opposition to estimate the distributional impact of a proposed tax cut before the Chancellor had finished speaking. In 2005, the seminal Atkinson Review took a fresh look at how to analyse the output of a government. In 2008, he produced the definitive study of inequality in advanced countries for the OECD. In 2016, he chaired the World Bank's Commission on Global Poverty, taking a fresh look at the question of what constituted extreme poverty in the poorest nations.
Perhaps the achievement for which Tony will most be remembered is his study of top income shares, such as the top 1 percent. After Thomas Piketty showed how taxation statistics could be used to produce long-run inequality estimates for France, Tony did the same for the United Kingdom. Tony eventually produced top incomes estimates for nearly 20 other nations, of which our collaboration on Australia and New Zealand was a small part.
What distinguished this work from previous research is that the estimates went back a century or more. For the English-speaking nations, the pattern was strikingly similar. In Canada, the United States, Britain, New Zealand and Australia, inequality had been very high around World War I, before falling through the Great Depression and the aftermath of World War II. In each of these nations, inequality was at its low-point in the late-1970s. Since then, the share of the top 1 percent has approximately doubled.
Working together with Thomas Piketty, Tony set about creating a global database of top incomes. This was a herculean research effort, and formed a key source for Piketty's bestselling book Capital in the Twenty-First Century.
Meanwhile, Tony had learned that he didn't have long to live, and set about writing what he knew would be his final book. Titled Inequality: What Can be Done?, it focused on policy solutions to the rising gap between rich and poor. These included guaranteed public employment at the minimum wage, encouraging innovation that improves employability, stronger union power, and more foreign aid. Atkinson also proposed that competition policy should explicitly take account of inequality, an idea that found its way into my party's election policies at the last election.
I last saw Tony and his wife Judith Mandeville when I stayed at their home in May 2015. By coincidence, I arrived on the evening of the national election. We talked for much of the next day about why the Labour Party – of which he had once been a member – had been given another thumping by the electorate. Tony was thoughtful, funny and wise as we walked around Oxford, watching spring cricket, and discussing questions like whether robots would take all the jobs.
In his generosity and intellect, Tony was the best of scholars. I feel lucky to have known him: as a mentor, a coauthor and a friend.
Andrew Leigh is the Shadow Assistant Treasurer, and a former professor of economics at the Australian National University. This opinion piece first appeared in the Canberra Times on Wednesday, 4 January 2017.