Richer and Poorer: Accounting for inequality.

[No1]

Annals of Society MARCH 16, 2015 ISSUE
Richer and Poorer: Accounting for inequality.
BY JILL LEPORE


Robert Putnam focusses on the widening gap between rich kids and poor kids. CREDIT ILLUSTRATION BY OLIVER MUNDAY
I just cut out the meat of the article to read the entire thing (which is good), go to : http://www.newyorker.com/magazine/2015/03/16/richer-and-poorer?intcid=mod-most-popular

In “The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power” (Little, Brown), Steve Fraser fumes that what’s gone wrong with political discourse in America is that the left isn’t willing to blame anyone for anything anymore. There used to be battle cries. No more kings! Down with fat cats! Damn the moneycrats! Like Putnam’s argument, Fraser’s is both historical and nostalgic. Fraser longs for the passion and force with which Americans of earlier generations attacked aggregated power. Think of the way Frederick Douglass wrote about slavery, Ida B. Wells wrote about lynching, Ida Tarbell wrote about Standard Oil, Upton Sinclair wrote about the meatpacking industry, and Louis Brandeis wrote about the money trust. These people weren’t squeamish about villains.

To chronicle the rise of acquiescence, Fraser examines two differences between the long nineteenth century and today. “The first Gilded Age, despite its glaring inequities, was accompanied by a gradual rise in the standard of living; the second by a gradual erosion,” he writes. In the first Gilded Age, everyone from reporters to politicians apparently felt comfortable painting plutocrats as villains; in the second, this is, somehow, forbidden. “If the first Gilded Age was full of sound and fury,” he writes, “the second seemed to take place in a padded cell.” Fraser argues that while Progressive Era muckrakers ended the first Gilded Age by drawing on an age-old tradition of dissent to criticize prevailing economic, social, and political arrangements, today’s left doesn’t engage in dissent; it engages in consent, urging solutions that align with neoliberalism, technological determinism, and global capitalism: “Environmental despoiling arouses righteous eating; cultural decay inspires charter schools; rebellion against work becomes work as a form of rebellion; old-form anticlericalism morphs into the piety of the secular; the break with convention ends up as the politics of style; the cri de coeur against alienation surrenders to the triumph of the solitary; the marriage of political and cultural radicalism ends in divorce.” Why not blame the financial industry? Why not blame the Congress that deregulated it? Why not blame the system itself? Because, Fraser argues, the left has been cowed into silence on the main subject at hand: “What we could not do, what was not even speakable, was to tamper with the basic institutions of financial capitalism.”

Putnam closes “Our Kids” with a chapter called “What Is to Be Done?” Tampering with the basic institutions of financial capitalism is not on his to-do list. The chapter includes one table, one chart, many stories, and this statement: “The absence of personal villains in our stories does not mean that no one is at fault.” At fault are “social policies that reflect collective decisions,” and, “insofar as we have some responsibility for those collective decisions, we are implicated by our failure to address removable barriers to others’ success.” What can Putnam’s “we” do? He proposes changes in four realms: family structure, parenting, school, and community. His policy recommendations include expanding the earned-income tax credit and protecting existing anti-poverty programs; implementing more generous parental leaves, better child-care programs, and state-funded preschool; equalizing the funding of public schools, providing more community-based neighborhood schools, and increasing support for vocational high-school programs and for community colleges; ending pay-to-play extracurricular activities in public schools and developing mentorship programs that tie schools to communities and community organizations.

All of these ideas are admirable, many are excellent, none are new, and, at least at the federal level, few are achievable. The American political imagination has become as narrow as the gap between rich and poor is wide.

“Inequality: What Can Be Done?,” by Anthony Atkinson, will be published this spring (Harvard). Atkinson is a renowned expert on the measurement of economic inequality, but in “Inequality” he hides his math. “There are a number of graphs, and a small number of tables,” he writes, by way of apology, and he paraphrases Stephen Hawking: “Every equation halves the number of readers.”

Much of the book is a discussion of specific proposals. Atkinson believes that solutions like Putnam’s, which focus on inequality of opportunity, mainly through reforms having to do with public education, are inadequate. Atkinson thinks that the division between inequality of outcome and inequality of opportunity is largely false. He believes that tackling inequality of outcome is a very good way to tackle inequality of opportunity. (If you help a grownup get a job, her kids will have a better chance of climbing out of poverty, too.) Above all, he disagrees with the widespread assumption that technological progress and globalization are responsible for growing inequality. That assumption, he argues, is wrong and also dangerous, because it encourages the belief that growing inequality is inevitable.

Atkinson points out that neither globalization nor rapid technological advance is new and there are, therefore, lessons to be learned from history. Those lessons do not involve nostalgia. (Atkinson is actually an optimistic sort, and he spends time appreciating rising standards of living, worldwide.) One of those lessons is that globalizing economies aren’t like hurricanes or other acts of God or nature. Instead, they’re governed by laws regulating things like unions and trusts and banks and wages and taxes; laws are passed by legislators; in democracies, legislators are elected. So, too, new technologies don’t simply fall out of the sky, like meteors or little miracles. “The direction of technological change is the product of decisions by firms, researchers, and governments,” Atkinson writes. The iPhone exists, as Mariana Mazzucato demonstrated in her 2013 book “The Entrepreneurial State,” because various branches of the U.S. government provided research assistance that resulted in several key technological developments, including G.P.S., multi-touch screens, L.C.D. displays, lithium-ion batteries, and cellular networks.

Atkinson isn’t interested in stories the way Putnam is interested in stories. And he isn’t interested in villains the way Fraser is interested in villains. But he is interested in responsible parties, and in demanding government action. “It is not enough to say that rising inequality is due to technological forces outside our control,” Atkinson writes. “The government can influence the path taken.” In “Inequality: What Can Be Done?,” he offers fifteen proposals, from the familiar (unemployment programs, national savings bonds, and a more progressive tax structure) to the novel (a governmental role in the direction of technological development, a capital endowment or “minimum inheritance” paid to everyone on reaching adulthood), along with five “ideas to pursue,” which is where things get Piketty (a global tax on wealth, a minimum tax on corporations).

In Port Clinton, Ohio, a barbed-wire fence surrounds the abandoned Standard Products factory; the E.P.A. has posted signs warning that the site is hazardous. There’s no work there anymore, only poison. Robert Putnam finds that heartbreaking. Steve Fraser wishes people were angrier about it. Anthony Atkinson thinks something can be done. Atkinson’s specific policy recommendations are for the United Kingdom. In the United States, most of his proposals are nonstarters, no matter how many times you hear the word “inequality” on “Meet the Press” this year.

It might be that people have been studying inequality in all the wrong places. A few years ago, two scholars of comparative politics, Alfred Stepan, at Columbia, and the late Juan J. Linz—numbers men—tried to figure out why the United States has for so long had much greater income inequality than any other developed democracy. Because this disparity has been more or less constant, the question doesn’t lend itself very well to historical analysis. Nor is it easily subject to the distortions of nostalgia. But it does lend itself very well to comparative analysis.

Stepan and Linz identified twenty-three long-standing democracies with advanced economies. Then they counted the number of veto players in each of those twenty-three governments. (A veto player is a person or body that can block a policy decision. Stepan and Linz explain, “For example, in the United States, the Senate and the House of Representatives are veto players because without their consent, no bill can become a law.”) More than half of the twenty-three countries Stepan and Linz studied have only one veto player; most of these countries have unicameral parliaments. A few countries have two veto players; Switzerland and Australia have three. Only the United States has four. Then they made a chart, comparing Gini indices with veto-player numbers: the more veto players in a government, the greater the nation’s economic inequality. This is only a correlation, of course, and cross-country economic comparisons are fraught, but it’s interesting.

Then they observed something more. Their twenty-three democracies included eight federal governments with both upper and lower legislative bodies. Using the number of seats and the size of the population to calculate malapportionment, they assigned a “Gini Index of Inequality of Representation” to those eight upper houses, and found that the United States had the highest score: it has the most malapportioned and the least representative upper house. These scores, too, correlated with the countries’ Gini scores for income inequality: the less representative the upper body of a national legislature, the greater the gap between the rich and the poor.

The growth of inequality isn’t inevitable. But, insofar as Americans have been unable to adopt measures to reduce it, the numbers might seem to suggest that the problem doesn’t lie with how Americans treat one another’s kids, as lousy as that is. It lies with Congress.