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ECONOMOIC RESEARCH AN INEQUALITY (PART I – PROLOGUE)

June 30, 2015

ECONOMIC RESEARCH AND INEQUALITY (PART I – PROLOGUE)

The day I heard of the publication of Thomas Piketty’s book (Capital in the Twenty-First Century), I drove to Barnes and Noble and bought the book. The morning I heard of Joseph E. Stiglitz’s book (The Great Divide – Unequal Societies and what we can do about them), I put down my coffee cup, drove to Barnes and Noble, bought the book, and was well into its contents by lunch time. It was as though in both cases I was buying intellectual jewelry – and at bargain basement rates.

Such is one of the prices we amateur economists must pay with our eager thirst to read and try to understand what the great economists of our age have to say and their specific recommendations for what to do about current inequities in our economic system, especially the accelerating inequality in wages and wealth between the haves and the have-nots, which I think may well be the biggest issue of this young century. I do not make such an assertion lightly in view of the other great unresolved issues of the day what with (among other things) saber-rattling, global warming, over-population and trying to iron out the wrinkles of globalization as each and all of them affect the rich, poor and emerging economies and societies around the globe and since a failure to do so in any such case could bring on civil commotion and upheaval in this day and age of instant communication among the have-nots as well as the haves. All that may be missing in this dangerous mix as its components continue to be unresolved is a charismatic leader armed with torches and pitchforks, as history has proven in this and other contexts.

Of these (and others here unnamed), I think the problem of wage and wealth inequality is the most pressing and urgent one in need of solution not only because it is the fair and equitable thing to do if we are to be a democracy in something other than name only, but also since some of the other problems above identified will abate with its solution. People whose wages are doubled, for instance, are more likely to put their pitchforks back in the barn and replace their glare with a smile and work harder on the job (if they have one in this day of competition with foreign labor and rampant increase in the use of robots). Happy citizens make better citizens when they can pay their bills, educate their children and in general return to a Norman Rockwell set of societal mores and folkways even though in the midst of a transitional industrial-to-tech age.

It promises to be a bumpy ride as we decide how to distribute the fruits of an economy depending less and less on human labor while the number of humans is exploding, but that is one of our tasks; the old right-left and Adam Smith bromides will clearly need major revision and I for one am going to depend upon great minds such as those of Thomas Piketty, Joseph E. Stiglitz, Jeffery D. Sachs and other such great economists in coming up with ideas on how to solve these problems which seem to be beyond solution by our campaign contribution-hungry and ideological members of Congress who are proposing ancient solutions from an industrial age on its last legs as high tech rules the roost. Evidence of such takeover is something I just read about: The stock value of Facebook now exceeds that of Wal-Mart.

In this connection, it is interesting to hear and read accounts from those present at the Hamptons and other rich enclaves that the superrich in their cocktail discussions are also beginning to openly question whether they may have overreached with their successful practices of greed and avarice and are even using the term “pitchfork” to describe the potential response for civil commotion among the hoi polloi.

My response? Where is government? Where are the “peoples’ representatives?” Why in a democracy should it take a threat of revolution to end such gross inequalities that are tearing at our social fabric while the subsidized plunder by the few continues and our infrastructure is in ruins? What is this? Could it be because democracy has been bought and perverted to serve the few? Are two and two four? Does the sun arise in the east?

I think as the word gets out that we are nearing a tipping point where we either attend to wage and wealth inequality peacefully or otherwise, and that with even some minimum reform it doesn’t have to be this way, that progress is possible. We need to change the political atmosphere to one where our representatives eschew propaganda and campaign contributions and work for the people they represent.

We rightly hear that our representatives are working only for gift-bearing special interests. The only “special interest” our representatives should be working for is the “special interest” of the people and none other, the one identified by Lincoln at Gettysburg as that “government of the people, by the people and for the people.” (I note here that the word “corporation,” – the subject of current congressional largesse with our money – does not appear in the Constitution.)

We are not likely to get help from the current crop of ideological representatives and senators in Congress who are ignoring the gathering tsunami or just hope it will go away in time with adequate propaganda dished out by their corporate patrons, so we have to remove them and elect others who honestly listen without precondition and make decisions based on hard evidence.

Even that happy result may not yield immediate results. There will be momentum to overcome as those who have gobbled up virtually all of the fruits of our economy for their own will stoutly resist reform and it will take time to establish a new formula for fair and equitable distribution of our economic growth and wealth between and among the rich and corporate class and the rest of us.

That is the area Part II of this essay will explore with a discussion of the likely evidence such new representatives of the people will hear in committee from expert economists such as Piketty, Stiglitz, Sachs and others  in grappling with transitional change and how to end wage and wealth inequality (and preserve our democracy as an additional bonus). Time is not on our side and there are no alternatives to excising this cancer on America that I can see, so we have to succeed, or else. Stay tuned.   GERALD    E

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