Indeed, the twentieth century was a time when social capital as emphasized by Ryan Avent, was greatly augmented by secondary markets. Today, however, social capital - in and of itself - can't create a stronger long term growth trajectory, without the additional impetus of primary market formation. Even now, the general equilibrium conditions of the present continue to be tightened, and too few understand how central bankers are further exacerbating the process. For instance, labor markets are supposedly in recovery, according to this Reuter's headline, "U.S. jobless claims fall, point to labor market strength":
The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, an indication of firmness in the labor market which may support an interest rate increase by the U.S. Federal Reserve this year.Still: the labor firmness that does exist, is of a specific general equilibrium form - one which continues to exclude economic participation and access along its margins. Worse, some forms of knowledge use participation have already peaked in general equilibrium conditions, which only points to the growing need for an alternative equilibrium approach.
What has changed? Both public and private market activity once contributed to broad income gains, especially in developed nations. Even though the fiscal transmission mechanisms of governments have lost much of their earlier capacity for efficient coordination, they nonetheless broadened the base of income capacity, in previous decades. The unique nature of fiat monetary systems was defined by both public and private financial integration, which in turn supported the productive complexity of knowledge based services. Developed nations in particular, gained equilibrium characteristics by which complex economies accumulated successive income "layers" of additional GDP growth.
In some respects, it's a shame that income taxation has became too open ended to serve a truly useful purpose, since initially this form of redistribution contributed to structural underpinnings in a way that may otherwise have proven difficult to replicate. In particular, knowledge based service sector activity became more complex and dynamic, than might have occurred via discretionary income alone.
Just the same, today's governments are increasingly at an impasse. Often, they cannot expect economic conditions to remain strong, should they remain reluctant to support a more structural economic approach to long term growth potential. Further taxation would be hard pressed, to provide the kinds of effective economic measures once promised. However, in order to productively supplant further redistribution, populations need to take a more direct role in the economic activities they believe to be most important. Otherwise, the productive knowledge based services of the twentieth century could eventually become hollowed out, with little to replace their value.