Inequality

Summary

62% of the expert panel agreed and only 12% disagreed that the “increasing share of income and wealth among the richest Americans” is major threat to capitalism. In contrast, only 46% of the PhD respondents agreed and 30% in fact disagreed with this statement.

On whether the same trend causes damage to the economic opportunities of children from lower-income families, both sets of respondents generally agreed. Similar consensus among both sets of respondents was found on whether this trend “is giving significantly more political power to the wealthy.”

Question A

The increasing share of income and wealth among the richest Americans is a major threat to capitalism.

Select Explanations

• The inability of capitalism to redistribute profits is seen by many as a failure of ‘trickle down economics’ and capitalism. Whether that is true, is a value judgement, but arguably it’s a threat to its success, as perceived.
• The most likely measure coming from political action against increased in equality are redistribution measures. Redistribution of income ex post doesn’t mean that firms continue to be privately owned, just that there are distortions.
• Is that an established fact? Anyway, I don’t see that private ownership of production factors (capitalism) in the US will disappear because of the current levels of inequality. There’s not enough revolutionary potential (yet).
• I assume “capitalism” is meant to refer the current American economic system, wherein most workers rely primarily on labor income and a few workers rely primarily on capital income. In this case, it is unclear why increasing rents/wealth to the capitalists will destroy this system.

Question B

The increasing share of income and wealth among the richest Americans is causing significant damage to the economic opportunities of children from lower-income families.

Select Explanations

• Many opportunities are zero-sum. Wealth buys access, damaging children from low-income families.
• Poverty may.
• Local school funding, segregation of neighborhoods by race, income etc
• The children from low-income families are competing with higher-income families for education and eventually careers, and therefore growing inequality exacerbates the opportunity spread, which will make upward mobility even harder.

Question C

The increasing share of income and wealth among the richest Americans is giving significantly more political power to the wealthy.

Select Explanations

• While Trump might have been richer than Clinton privately, she raised some 40% more than Trump in 2016 https://www.washingtonpost.com/graphics/politics/2016-election/campaign-finance/ However, Trump won the presidency. Generally, I’d have to be convinced with data that the power of the wealthy is increasing over time.
• While I do not believe money can currently directly interfere with voting and election outcomes, money can operate through many other channels (campaigning, lobbying, access to policymakers), which means the wealthy have more opportunities to influence political outcomes.