Robert Samuelson devotes his most recent column to Thomas Piketty, the French economist whose work on income inequality has become a cause célèbre among American progressives:
Agree or disagree with his views, Piketty’s project represents a prodigious research achievement. With other economists, he has constructed statistics tracing the distribution of income and wealth for many major countries back to the 1800s. The most obvious conclusion from the data is common-sensical: Even relatively egalitarian societies have huge disparities in economic fortune.
Dr. Piketty’s preferred solution seems to be taxation. My own view is that taxation is probably the easiest to enact but the least effective way of solving the problem, at least in the current state of American political policy.
Some people have always been more talented, hardworking, or just plain lucky than others. They haven’t always been able to corral such a large proportion of income and wealth. I don’t believe that the difference is either in the people or in the underlying economy but in the policies that have been put into place for which there are significant consensuses in both Congressional caucuses. Over the period of the last thirty or forty years a series of what are called “neoliberal” policies have given a significant advantage to areas that receive subsidies while stripping them from areas that don’t.
Another solution that progressives sometimes propose, stronger labor unions, is even less likely to succeed. That’s a cargo cult mentality, a form of the post hoc propter hoc fallacy. I believe that the underlying labor conditions, conditions of relatively tight labor markets and increasing marginal productivity of labor, made labor unions attractive and promoted the distribution of income and wealth. We don’t have those conditions any more.
Meanwhile, I think we need to recognize that if we keep doing what we’ve been doing, we’ll keep getting what we’ve been getting. The political class is more than happy with that.