Jacob Hacker and Paul Pierson argue in their current book, Winner-Take-All Politics, that it’s the evil corporations, campaign-finance law, lobbyists, and compromised policy-makers that explain rising inequality. The plutocrats hoodwinked America.
Ezra Klein’s review [“The ‘Hood Robin’ Economy,” Issue #20] is appropriately skeptical of many of Hacker and Pierson’s claims. After expressing admiration for their theory of politics, he nevertheless wonders whether things would be much different if unions had remained strong (he might also have pointed out that unions had been in decline for decades before Ronald Reagan took office and inequality really began to take off).
But he seems enamored of their concept of “drift”—that the failure to act can be not just a facilitator of social problems but a cause of them. Klein states that their theory best explains not rising inequality but “why the political system has been so feckless and haphazard about responding.”
In this regard he buys into the Hacker-Pierson late-night-dorm-room-soapbox-stoner theory of inequality and national political moderation: It’s campaign finance, dude! An alternative hypothesis is that Americans don’t mind inequality, dude. As I argued recently in a New York Times “Room for Debate” forum, inequality is a negligible political concern among Americans. Americans are more tolerant of inequality than citizens of 26 other countries, according to data from the International Social Survey Program, and they are also least likely to believe it is government’s responsibility to reduce inequality.
In a remarkable coincidence, Hacker and Pierson have also managed simultaneously to overstate the rise in inequality and understate improvement in the living standards of the non-rich. I have estimated elsewhere that the increase in the share of income going to the top is something like half as great as the data used by Hacker and Pierson show. I have also shown how living standards for the typical American have risen by roughly twice as much as Hacker and Pierson claim.
Hacker and Pierson also fail to provide a reason why rising inequality or the current level of inequality is a problem. Would the household in the middle really have been better off by $12,300 if inequality hadn’t grown between 1979 and 2006, as Hacker and Pierson contend? To believe it you have to assume that whatever draconian regulation or redistribution government might have enacted differently to get to equal income growth among poor, middle, and rich alike would not have had a negative impact on growth. Otherwise the size of the economic pie would be smaller, so the increase in income would have been less dramatic.
Winner-Take-All Politics feels like an argument in search of data, tailor-made for its intended audience of liberals, and likely to convince them that their obviously superior vision for society just has to beat back the corporations, bankers, and conservatives that stand in the way of giving the public what it truly wants. I mean, what’s the alternative—accept that people feel better off than liberals believe, that they care less about inequality, and that politics in America today is about neither economic survival nor class resentment? Smart liberals like Klein need to reconsider the extent to which Americans are routinely hoodwinked and become less susceptible to being hoodwinked by fellow denizens of ideological echo chambers.
Jacob Hacker and Paul Pierson reply:
When someone writes an attack on a book in response to a review of that book, he must feel strongly. But what does Scott Winship feel strongly about? Our argument that the rich have pulled away from the rest? That this gap was fostered by policy, from upper-income tax cuts to deregulation to executive compensation rules? That such policies reflected organized business and conservative pressure?
Apparently not. These core arguments are only indirectly Winship’s target. Instead, he reduces our book to a crude claim about campaign finance (“It’s campaign finance, dude!”), despite the fact that we argue explicitly that neither campaigns nor their financing are the heart of the problem.
What appears to get Winship really exercised, however, is our documentation of rising inequality and our contention that middle-class voters aren’t driving this trend. Which is also strange, because these are the two aspects of our book that draw most heavily on recent research by leading scholars.
Winship disputes, for example, Emmanuel Saez’s research showing income inequality at levels not seen since before the Great Depression. Saez has refuted this critique elsewhere, but in any case Winship’s technical complaint has virtually no bearing on our basic story, which is that the richest have pulled away from the rest.
Precisely to avoid such debates, we used as our prime source the CBO’s income dataset, widely considered the gold standard. Its message? The average income of the top 1 percent rose 281 percent between 1979 and 2007, while that for the middle fifth of Americans increased by 25 percent. Winship wants us to believe the middle’s modest gains would have been even smaller if the rich had not shot into the economic stratosphere. As we point out in our book, however, U.S. economic growth was roughly on par with that of other rich democracies over this period.
Are middle-class Americans somehow driving the shifts in policy that have advantaged those at the top, as Winship implies? To argue this is not simply to ignore the powerful role of organized economic interests that we examine. It is also to miss the realities that Larry Bartels and other political scientists have increasingly documented: Voters have an extremely difficult time connecting complex policies with their own circumstances, and upper-income voters seem to factor much more in politicians’ calculations than those lower down the economic ladder.
We give much attention to this and other research on the relationship between public opinion, voting, and economic governance in our book. Characteristically, Winship ignores all of it, just as he ignores the telling study suggesting public support for greater equality that Ezra Klein describes in his review. Those interested in learning what we have to say, and whether we can back it up, would do well to read Klein’s assessment (among the many that are available)—or, better yet, the book we actually wrote.