Barack Obama once declared economic inequality - that is, the huge disparities in income and wealth between the rich and the rest - to be “the defining challenge of our time”. In a similar vein, Bernie Sanders called inequality “the great moral issue of our time”. Such sentiments are widespread on the left and de rigueur within the upper ranks of the Democratic Party. Elizabeth Warren and Zohran Mamdani come to mind.
Yet the issue of inequality in the U.S. doesn’t seem that big of a deal for lot of other Americans. According to recent polls, just half of us consider economic inequality a “very big problem” in the U.S. (YouGov and Pew). This doesn’t mean Americans of the non-left are a cold-hearted bunch. Most want a country with less poverty, greater social mobility and equal opportunity for all. But for many, the very idea of extreme inequality elicits little more than a shrug
As with the general public, so with economists - many of whom consider inequality more a consequence than a cause of dysfunction in American society. For example:
Steven Kaplan: “Many other factors are more important.”
Angus Deaton “Inequality doesn't DO anything. It is other things that make inequality and are bad.”
David Autor: “The top is not inhibiting the bottom; both are symptoms of dysfunction.”
Bengt Holmström: “It’s a symptom of a problem.”
Larry Samuelson: Low-income children face many obstacles, but it is less clear that inequality per se is a major cause of such obstacles.”
For some, however, the problem of economic inequality goes beyond economic effects; it is also a moral and political issue. They argue that inequality in the US violates basic principles of fairness and leads to severe disparities in political power and wellbeing.
Well, ok! I accept the challenge and will be exploring these issues in a series of posts.
Next: What is fair?