Champions of the Rich

From Night of the Rich, Diego Rivera, 1932-1933

From Boston Review:

Winner-Take-All Politics is an important book that comes at a crucial moment in the political history of the United States. Other than the usual outrage at our incumbent politicians, there has been a deafening silence in our broader political discourse, and even in professional scholarship, about the political causes of the financial crisis, the hegemony of business interests, and growing inequality. Hacker and Pierson have begun to fill that silence.

Winner-Take-All Politics is concerned first and foremost with economic inequality in America. The book cites a mountain of data to show how the very highest tiers in the nation’s income distribution—not just the top 10 percent, but the top 1 percent and the top 0.1 percent—have become much wealthier while income growth has stagnated at the middle and bottom. In 1974 the top 0.1 percent of American families earned 2.7 percent of all income in the country. By 2007, Hacker and Pierson write, “the top 0.1 percent have seen their slice of the pie grow . . . to 12.3 percent of income—a more than fourfold increase” (emphasis in original).

But why, other than in service of envy, should we care how much more the rich rake in? One reason is welfare—greater redistribution would help those who are less well off. A second reason is democracy. In pondering the question of how much equality democracy requires, Rousseau answered, “no one should be so poor as to have to sell himself, nor so rich that he can buy another.” From this vantage, the danger of inequality is not immiseration (though there is plenty of that), but domination.

…

Who killed American equality? Hacker and Pierson deploy the motif of the whodunit. For them, the culprit is not the usual suspect of skills-based technological change, according to which those who have greater skills and education inevitably are more richly rewarded now than in the past. As Hacker and Pierson rightly point out, the economic systems of Europe also depend upon highly educated workers, but inequality there has grown much less quickly than in the United States. Instead, the pair finger the organizational dynamic of American politics: once business interests organized themselves in the 1970s, they were able to manipulate the American policy process. Thus they have been able to block efforts to constrain executive compensation or re-regulate the financial industry even when large popular majorities would favor such policies.

“Winning the Future”, Archon Fung, Boston Review