Politics, Not Economics, Ultimately Drives Inequality

Jon Wisman

No 2017-06, Working Papers from American University, Department of Economics

Abstract: Over the past 40 years, inequality has exploded in the U.S. and significantly increased in virtually all nations. Why? The current debate typically identifies the causes as economic, due to some combination of technological change, globalization, inadequate education, demographics, and most recently, Piketty's claim that it is the rate of return on capital exceeding the growth rate. But to the extent true, these are proximate causes. They all take place within a political framework in which they could in principle be neutralized or reversed. Indeed, this mistake is itself political. It masks the true cause of inequality and presents it as if natural, due to the forces of progress, just as in pre-modern times it was the will of gods. By examining three broad distributional changes in modern times, this article demonstrates the dynamics by which inequality is a political phenomenon through and through. It places special emphasis on the role played by ideology -- politics' most powerful instrument -- in making inequality appear as necessary.

Keywords: Political power; Distribution; Legitimation; Ideology (search for similar items in EconPapers)
JEL-codes: B00 D63 N3 Z18 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-fdg, nep-his, nep-hpe, nep-pbe and nep-pke
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https://doi.org/10.17606/xnpa-7x61 First version, 2017 (application/pdf)

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