Sunday, July 6, 2014

Bartels, 2008, Unequal Democracy: The Political Economy of the New Guilded Age (political economy)

Bartels is a professor of Public and International Affairs at Princeton, and combines the disciplines of political science and economics.  This is the sort of book that can only be written by combining them.  It is a compelling read, and helps to explain why economists have so little to offer by way of explanation of inequality (however, see Galbraith, 2012 on the economic consequences of inequality). Partisan politics and the ideological convictions of the elite have a significant impact on equality, and the regimes of Reagan, Bush, and Bush have pushed the US to higher levels of inequality through legislation that favours the rich.  Chapter 2 shows that Democratic and Republic presidents have presided over different patterns of income growth: “On average, the real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working poor families have grown six times as fast under Democrats as they have under Republicans.” Contrary to the myth of social conservatism, low-income whites have become more Democratic over time (Ch. 3). Ch. 4 explains why Republicans have done so well in late 20th C elections. Voters focus on recent, not long-term, trends; all voters are sensitive to growth in high income groups, which tend to be over-reported, giving an illusion of prosperity; and voters are responsive to campaign spending, which rewards bigger Republican budgets. Ch 5 shows that while citizens are concerned about inequality and sympathetic to the bottom tier, there is a lot of ignorance and misconception, which gives policy-makers freedom to respond to pressure groups. Ch 6, 7, and 8 are case studies of the Bush tax cuts, the repeal of the estate laws, and the resistance to minimum wage increases - three policies that have increased the gap between rich and poor. In these chapters, I think the role of the media needs more attention to explain the confused and superficial public understanding of things that affect them, often making them identify falsely with the hyper-wealthy.  The new opiate of the masses is dumbed-down media. Finally, Bartels addresses the fundamental question: who governs?  The answer is that elites govern, and that nominal political equality is meaningless in the face of enormous and rising economic inequality.  But the US has been here before in the Guilded age of the 1920s.  The depression wiped out that wealth, and the two world wars created the new middle class.  I think that the experience of the latest downturns and the expeditionary wars of neo-liberalism show that the hyper rich have figured out how to profit. Bartels careful dissection of the politics of inequality is also an indictment of the separation of economics and politics, despite the many economic journals cited.
(Also posted on Amazon)
David Last, 2 November 2013

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