Stuart M. Butler thinks we’re being distracted by the Great Gatsby curve (which, remember, posits a positive relationship between income inequality and income immobility).
I agree—but for very different reasons.
Butler’s argument is that we’re focusing too much on inequality instead of mobility, that is, finding ways to move people at the bottom (characterized by “high school dropouts, pitiful savings rates, and the problem of children parenting children”) up the income ladder.
The problem, of course, is, even if some individuals succeed (within or between generations) in moving up the ladder, the existence of the ladder and the growing gap between rungs on the ladder mean we’re still faced with the fundamental problem of grotesque levels of inequality. The only change (if upward and, with it, downward mobility increase) is different people occupy those highly unequal positions, that is, a highly unequal society remains.
It’s a bit like the problem with Paul Samuelson’s famous statement (in “Wages and interest: a modern dissection of Marxian economics,” American Economic Review 47 , 894): “Remember that in a perfectly competitive market, it really does not matter who hires whom; so have labor hire capital.”
The fact is, if labor and capital changed sides, and labor hired capital, it would still be the case that capital and labor occupy different positions in capitalist production: labor receives wages in exchange for their ability to work, while capital gets the profits produced by the laborers.
So, we can either focus on who occupies which rung in the distribution of income (or who hires whom in the capital-labor relationship) or we can focus instead on the obscenely and increasingly unequal distribution of income (and the fact that, in the existing capital-labor relationship, the capital share is growing while the labor share is declining).
If we don’t focus on the real problems of inequality and class, we’ll just continue to be distracted by the Great Gatsby curve.