Inequality Is Not Inevitable
A dangerous trend has developed over this past third of a century. A country that experienced shared growth after World WarⅡ began to tear apart, so much so that when the Great Recession hit in late 2007, one could no longer ignore the division that had come to define the American economic landscape. How did this "shining city on a hill" become the advanced country with the greatest level of inequality?
Over the past year and a half, The Great Divide, a series in The New York Times, has presented a wide range of examples that undermine the notion that there are any truly fundamental laws of capitalism. The dynamics of the imperial capitalism of the 19th century needn't apply in the democracies of the 21st. We don't need to have this much inequality in America.
Our current brand of capitalism is a fake capitalism. For proof of this go back to our response to the Great Recession, where we socialized losses, even as we privatized gains. Perfect competition should drive profits to zero, at least theoretically, but we have monopolies making persistently high profits. C.E.O.s enjoy incomes that are on average 295 times that of the typical worker, a much higher ratio than in the past, without any evidence of a proportionate increase in productivity.
If it is not the cruel laws of economics that have led to America's great divide, what is it? The straightforward answer: our policies and our politics! People get tired of hearing about Scandinavian success stories, but the fact of the matter is that Sweden, Finland and Norway have all succeeded in having about as much or faster growth in per capita(人均的) incomes than the United States and with far greater equality.
So why has America chosen these inequality-enhancing policies? Part of the answer is that as World War II faded into memory, so too did the solidarity it had created. As America triumphed in the Cold War, there didn't seem to be a real competitor to our economic model. Without this international competition, we no longer had to show that our system could deliver for most of our citizens.
Ideology and interests combined viciously. Some drew the wrong lesson from the collapse of the Soviet system in 1991. The pendulum swung from much too much government there to much too little here. Corporate interests argued for getting rid of regulations, even when those regulations had done so much to protect and improve our environment, our safety, our health and the economy itself.
But this ideology was hypocritical(虚伪的). The bankers, among the strongest advocates of laissez-faire(自由放任的) economics, were only too willing to accept hundreds of billions of dollars from the government in the aid programs that have been a recurring feature of the global economy since the beginning of the Thatcher-Reagan era of "free" markets and deregulation.
The American political system is overrun by money. Economic inequality translates into political inequality, and political inequality yields increasing economic inequality. So corporate welfare increases as we reduce welfare for the poor. Congress maintains subsidies for rich farmers as we cut back on nutritional support for the needy. Drug companies have been given hundreds of billions of dollars as we limit Medicaid benefits. The banks that brought on the global financial crisis got billions while a tiny bit went to the homeowners and victims of the same banks' predatory(掠夺性的) lending practices. This last decision was particularly foolish. There were alternatives to throwing money at the banks and hoping it would circulate through increased lending.
Our divisions are deep. Economic and geographic segregation has immunized those at the top from the problems of those down below. Like the kings of ancient times, they have come to perceive their privileged positions essentially as a natural right.
Our economy, our democracy and our society have paid for these gross inequalities. The true test of an economy is not how much wealth its princes can accumulate in tax havens(庇护所), but how well off the typical citizen is. But average incomes are lower than they were a quarter-century ago. Growth has gone to the very, very top, whose share has almost increased four times since 1980. Money that was meant to have trickled(流淌) down has instead evaporated in the agreeable climate of the Cayman Islands.
With almost a quarter of American children younger than 5 living in poverty, and with America doing so little for its poor, the deprivations of one generation are being visited upon the next. Of course, no country has ever come close to providing complete equality of opportunity. But why is America one of the advanced countries where the life prospects of the young are most sharply determined by the income and education of their parents?
Among the most bitter stories in The Great Divide were those that portrayed the frustrations of the young, who long to enter our shrinking middle class. Soaring tuitions and declining incomes have resulted in larger debt burdens. Those with only a high school diploma have seen their incomes decline by 13 percent over the past 35 years.
Where justice is concerned, there is also a huge divide. In the eyes of the rest of the world and a significant part of its own population, mass imprisonment has come to define America—a country, it bears repeating, with about 5 percent of the world's population but around a fourth of the world's prisoners.
Justice has become a commodity, affordable to only a few. While Wall Street executives used their expensive lawyers to ensure that their ranks were not held accountable for the misdeeds that the crisis in 2008 so graphically revealed, the banks abused our legal system to foreclose(取消赎回权) on mortgages and eject tenants, some of whom did not even owe money.
More than a half-century ago, America led the way in advocating for the Universal Declaration of Human Rights, adopted by the United Nations in 1948. Today, access to health care is among the most universally accepted rights, at least in the advanced countries. America, despite the implementation of the Affordable Care Act, is the exception. In the relief that many felt when the Supreme Court did not overturn the Affordable Care Act, the implications of the decision for Medicaid were not fully appreciated. Obamacare's objective—to ensure that all Americans have access to health care—has been blocked: 24 states have not implemented the expanded Medicaid program, which was the means by which Obamacare was supposed to deliver on its promise to some of the poorest.
We need not just a new war on poverty but a war to protect the middle class. Solutions to these problems do not have to be novel. Far from it. Making markets act like markets would be a good place to start. We must end the rent-seeking society we have gravitated toward, in which the wealthy obtain profits by manipulating the system.
The problem of inequality is not so much a matter of technical economics. It's really a problem of practical politics. Inequality is not just about the top marginal tax rate but also about our children's access to food and the right to justice for all. If we spent more on education, health and infrastructure(基础设施), we would strengthen our economy, now and in the future.