The Economist: The 1% solution

MY COLLEAGUE and I have something in common: we both think concentrations of power in alliances between gargantuan business instititutions and gargantuan government institutions are generally terrible. My colleague and I don't have much in common in how we analyse the formation of those concentrations of power, or what we think should be done about them. Another thing my colleague and I have in common is that we each think the other guy's approach to this problem is hopelessly naive.

And another thing we don't have in common is that I largely agreed with Joseph Stiglitz's article in Vanity Fair, which my colleague describes as an example of self-refutingly absurd liberal ideology. To sum up the basic thrust of what I agree with in Mr Stiglitz's piece: I think the rich are getting much, much richer, while regular people (in the developed world, which is what we're talking about here) are at best treading water.

I think that wealth brings power, and the fact that the rich are getting much, much richer relative to everyone else means that the rich also exert increasing influence over the economy, government and society.

I think income mobility and equality of opportunity have declined in America over the past 40 years, to the point where America is now more segregated by class divisions than many European countries. I think a major reason for these shifts has been the increasing dominance, since the Reagan era, of an ideology that is indifferent to or actively celebrates inequality of income.

I think this ideology is bad: bad for the economy, bad for society, bad for art and culture, bad for the moral character of those who subscribe to it. My chief difference with Mr Stiglitz is that I think his confidence that inequality will eventually lead to a vociferous political reaction against wealthy financial elites in America is misplaced.

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