Inequality Is About Access to Public Goods, Not Income


Claude S. Fischer in Boston Review:

Many explanations for growing inequality are on the table. Technical and structural changes, such as computerization and globalization, have strengthened the market position of educated specialists while undermining that of uneducated workers. Business rearrangements, including the growing role of finance in the economy and of “shareholder value” in corporate affairs, enrich managers and asset-holders more than workers. Social trends, such as the increasing delay of marriage, more children raised by single parents, women’s entry into the professions, and growing marital “homogamy”—high earners marrying high earners—have also widened the economic gap between top and bottom.

Almost all the possible causes of growing inequality are, however, conditioned by policy. Inequality trends vary substantially among Western nations. Inequality has surged in the United States and a few other English-speaking countries since 1970, while other countries, such as Australia and France, have experienced only mild or even negligible increases in inequality. Even within the United States, states vary in the pace of increasing inequality, variation that seems connected to state policy. Economist Thomas Piketty, whose work has been interpreted as suggesting that rising inequality is inevitable, demurs: “The history of the distribution of wealth has always been deeply political. . . . It is shaped by the way economic, social, and political actors view what is just and what is not, as well as by the relative power of those actors and the collective choices that result.”

As British economist Tony Atkinson wrote in his last book, Inequality (2015), even the most seemingly technical or market forces are guided by government actions. For Atkinson the rise in inequality has been the joint result of market forces driving inequality (such as global trade) and weakening state action against such forces. Policy can affect earnings through, for example, rules for wages, corporate governance, and labor bargaining. The weakening of organized labor has been the key force, Atkinson argues, for worsening income inequality in the United States and the UK. And policy of course affects any post-market adjustments through taxes, subsidies, health provision, and so on. Policy even shapes social trends such as delayed marriage through provisions for housing and child care, equal rights laws, and the like.

More here.