Popular discussions about income inequality often make politically appealing yet empirically weak claims. Those on the left emphasize the impact of deregulation, tax cuts, and globalization on inequality. Yet these policies have a weak empirical relationship with income inequality. Those on the right tend to dismiss concerns about inequality and refocus attention on income mobility. They also confuse genuine concern about the consequences of inequality with envy; they downplay the effect rising inequality has on social polarization. This lecture will explain where the left and right went wrong and offer an alternative explanation focused on the evolution of legal and political institutions.