We can certainly do better on inequality than Summers

Posted: 23 November 2011 in Uncategorized
Tags: , ,

As I’ve argued many times on this blog (e.g., here), mainstream economists can barely glimpse, let alone fully understand, the problem of economic inequality.

Larry Summers is, unfortunately, no exception. Yes, he recognizes that inequality exists and that “strengthening the economy” won’t magically make it disappear. And he even makes an important argument: that “focusing on American competitiveness could exacerbate inequality, if that means corporate tax cuts or the protection of intellectual property for the benefit of companies that are not primarily producing in the US.”

But then he falls asleep. His explanation of why inequality exists remains confined to the usual neoclassical reference to “changing technology and globalisation” and his idea of responding to the problem of inequality repeats the neoclassical nostrums of avoiding special concessions, enacting pro-growth tax reform, and providing widespread access to education.

What Summers and his neoclassical colleagues simply can’t or won’t understand is that how the economy is organized—how the surplus is appropriated and distributed, by and to the 1 percent—is an important factor in determining the growing gap between the 1 percent and everyone else.

That’s an explanation that would wake neoclassical economists like Summers from their slumber.

Comments
  1. Bill Clark says:

    Hello David from an old Bowdoin classmate.
    I just found your blog and it brings back fond memories of the 70’s and our Professor David Vail. I realize you don’t like nostalgia but please indulge me!
    Not sure I agree with your views but admire your passion and concern-we have a real problem with inequality that we need to fix.
    Best
    Bill Clark

  2. David F. Ruccio says:

    Greetings, Bill. We are, indeed, indebted to David Vail, who was and remains a committed teacher and thinker.

    And, yes, the failure of the idea that we can deal with the problem of inequality by tinkering around the edges is now being recognized by many.

  3. […] the rich world.” Yes, as I have documented from the very beginning on this blog (e.g., here, here, and here), there are plenty of mainstream economists who have attempted to prove that inequality […]

  4. […] in the rich world.” Yes, as I have documented from the very beginning on this blog (e.g., here, here, and here), there are plenty of mainstream economists who have attempted to prove that inequality […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s