Jim — Could not agree more. Apart from the education vs. capabilities debate, did you see Russ Roberts’s take on the Goldin and Katz inequality data (here and here)? Russ’s argument is that the graph currently making the rounds is misleading, because it does not account for economic mobility — “If you look at longitudinal studies of the same people (the Michigan PSID for example),” he writes, “you get a totally different picture than this one.” I’m not sufficiently up on the literature to comment authoritatively, but I thought you might find it interesting.