Government Is Whose Problem?

Jon Wisman

Journal of Economic Issues, 2013, vol. 47, issue 4, 911-938

Abstract: This article addresses the political meaning of President Ronald Reagan's 1981 declaration that "government is the problem." Whereas, historically, the state had been used by elites to extract as much from producers as possible, with democratization of the franchise, the state became the sole instrument that could limit — or potentially end — this extraction. In principle, once control of the state is democratized by the ballot box, the fortunes of elites largely depend upon controlling ideology. In 1955, Simon Kuznets offered the highly influential conjecture that, while rising inequality characterizes early economic development, advanced development promises greater equality. However, rising inequality in most wealthy countries over the past four decades has challenged this hypothesis. What those who embraced Kuznets's conjecture failed to recognize is the dynamics by which the rich inevitably regain control over ideology — and thereby the state — with their far greater command over resources, education, and status. In the course of history, only the very severe crisis of the 1930s discredited the elites' ideology sufficiently to enable a sustained period of rising equality. However, by 1980, they had regained ideological ascendancy. This article examines how this struggle over ideology has unfolded in the US since the democratization of the franchise in the nineteenth century. It concludes with reflections on whether the current crisis holds promise of de-legitimating the elites' hold on power once more and of ushering in another period of rising equality.

Date: 2013
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DOI: 10.2753/JEI0021-3624470406

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