February 21, 2013
Capitalism and Inequality
Jerry Z. Muller in Foreign Affairs:
Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it. As the 2012 U.S. presidential election and the battles over the "fiscal cliff" have demonstrated, the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism. Each side minimizes the concerns of the other, and each seems to believe that its desired policies are sufficient to ensure prosperity and social stability. Both are wrong.
Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it -- because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords. Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism -- because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.
More here.
Posted by S. Abbas Raza at 10:20 AM | Permalink
Comments
"expanding equality of opportunity only increases it -- because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords."
That is simply untrue. The natural result of capitalism is monopoly with the most economically powerful imposing their interests on everyone else. It is only through political intervention that competition is preserved and there is opportunity for all.
Let Rockefeller keep Standard Oil's monopoly on oil and gas production and he would have also controlled the automobile industry and any other industry that depended on his product. Free Microsoft from anti-trust laws and Apple would have been out of business years ago.
The reality is that US society is now controlled by a very narrow social network. That concentration of power is the real threat to both economic opportunity and national prosperity in the United States. It is also a threat to international peace and prosperity.
Posted by: Ross Williams | Feb 21, 2013 12:27:28 PM
This is quite very misguided article. Does the author think the planet can survive capitalism's endless drive for 3% compound surplus? can we? We need to distinguish between growth and development: we need a large scale redistribution of the staggering amounts of wealth from the very rich to the rest. Remember the bulk of the world's population get by (just) on $2 a day, and that in the developed world, inequality is growing. I don't share his premises or his conclusions.
Posted by: Chris Horner | Feb 21, 2013 1:44:40 PM
"Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, . . ."
Except that it was a change in policy (GATT, WTO) which gave China most favored nation status, forcing workers in the West to "compete" with the impoverished masses of East Asia.
And it was the 1964 Immigration Act which exposed African-Americans to wage competition with tens of millions of low-skilled workers from Latin America.
Labor saving technologies certainly have contributed to the rising inequality between labor and capital too. The remedy for such technologies in the past has been statutory limits on the work week. That's politics too.
I haven't read this author's arguments. Why bother? It's like someone questioning the laws of supply and demand.
Posted by: Luke Lea | Feb 21, 2013 5:15:15 PM
"...the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism."
The prospect of 10 more pages after such a ridiculous assertion was too much.
Obviously the author is sheltered in some way from the real world. At least in the United States, 'the left' and 'the right' are united as one, and focused like a laser beam on the institutionalization of local and global serfdom.
The Kabuki theater of words that passes for honest debate on economic policy in America is for appearances only, in order to distract from the core Medieval Koch fetish that motivates our courtier politicians and all the other lord and lady wannabes who have boldly crawled out of the darkness and into broad daylight over the course of the last forty years.
Amazingly, as we see here, this Kabuki theater deception just never gets old.
The question with regards to the author is only 'deceived' or 'deceiver'?
But as I said, this is all with the qualification: after reading Muller's opening of pure nonsense, the prospect of wading through the following nine pages was too much.
Posted by: anonymous | Feb 22, 2013 1:08:29 AM
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