Who cares about inequality? Wonks

Posted on May 3, 2014 in Equality Debates

TheGlobeandMail.com – Globe Debate
May 03 2014.   Margaret Wente

If you haven’t heard of Thomas Piketty by now, you’re definitely behind the curve. Mr. Piketty – boyishly handsome, French and really smart – is the new heartthrob of the wonk set.

Mr. Piketty and his new book, Capital in the Twenty-First Century, are being received with rapturous praise everywhere from the White House to The New York Times. He has written the most important book of the year, or perhaps the century. He is the new de Tocqueville. He has brilliantly analyzed the defining issue of our time. The book was Amazon’s No. 1 bestseller until Amazon ran out of stock.

The news he brings isn’t good. In Mr. Piketty’s analysis, the dynamics of capital appreciation mean that over time, wealth will accumulate in fewer and fewer hands. Marx was basically right. The American (and Canadian) dream was always just a fantasy, because meritocracy won’t win out in the end. Rising inequality is baked into the capitalist cake.

Yow! It’s even worse than we thought.

I’m not qualified to analyze Mr. Piketty’s work, which even critics have described as “brilliant.” My question is, why now?

One answer is that the progressive elites have been completely captured by the declinist narrative. It goes like this: Class lines are hardening, the middle class is shrinking, mobility is disappearing and a filthy rich plutocratic class of 0.1-per-centers are becoming increasingly entrenched. Unless we do something, social unrest is all but inevitable.

There’s just one problem with this. Although highly educated social progressives are alarmed by the scenario, hardly anybody else is. In a recent Associated Press poll on Americans’ top concerns, just 5 per cent of respondents said inequality was a major problem that needed attention. Nearly all of those who said it was a problem said they doubted the government could do anything immediate to address it. In fact, long-running Gallup polls have consistently found that Americans’ top issue is dissatisfaction with government.

In Canada, the narrative of rising inequality is a central campaign plank of the Liberals (who swiped it from Barack Obama), and an article of faith among certain media that are dedicated to documenting the grinding hardships of the middle class. Any evidence that the middle class is doing pretty well is greeted with horrified denial.

Not quite two weeks ago, for example, the Times published a story saying that for the first time in modern history, the American middle class is no longer the most prosperous in the world. Whose is? Canada’s!

You’d think this news might be greeted with a certain amount of modest chest-thumping. Naw. Liberal LeaderJustin Trudeau didn’t want to talk about it. A bunch of experts fell all over themselves to explain that this was just one data set, and the data weren’t that clear-cut anyway. The CBC took pains to explain that things aren’t nearly as good as they look. The Toronto Star arguedthat the only reason we look so good is that the Americans are so screwed up, and we’re following them on the road to perdition.

My hunch is that Mr. Trudeau, the CBC and the Star would have felt happier about this story if, say, the Liberals, rather than the Conservatives, were in power. Not that the Conservatives particularly deserve the credit, either – that goes to Canadian prudence, good fiscal management and luck. We have better banking and mortgage regulations. We have an energy bonanza. We spread the wealth around a lot more, and yes, we have less inequality. Sure, we have a pile of challenges. But most Canadians don’t think inequality is one of them.

Darrell Bricker, CEO of Ipsos Public Affairs, puts it this way. “Do they see themselves as being deprived of their economic due because somebody else is doing better? They do not,” he told me. Canadians believe they live in an overwhelmingly middle-class nation. They simply don’t perceive a problem. “They don’t even think about bank chairmen. What they care about is people like [Alison] Redford and [Mike] Duffy – people living high off the hog on public dollars.”

Even if Canadians believe inequality is growing, they don’t necessarily think government can fix it. Nor do they feel that they, personally, need more government help. When asked whether they’d prefer tax cuts or more government programs, 60 per cent choose tax cuts. “When it comes to the government’s ability to solve problems, government has a lot of credibility issues,” Mr. Bricker says.

In other words, what we have is a great disconnect between the things the progressive policy elite worries about and the things everybody else worries about. Perhaps the middle class, drugged and duped into complacency by cheap Big Macs and wide-screen TVs, is suffering from a case of what Marxists used to call false consciousness. Or perhaps things aren’t quite as dire as we think.

This week, the Times dispatched a crack reporting team to the suburbs of Toronto. Their assignment was to explore life in “the world’s most affluent middle class.” (The story was delightfully labelled Up North, On Top.)

They found a surprising lack of class discontent. Sure, people said, it’s hard to save and get ahead. But they didn’t sound particularly oppressed. They like their health care and they haven’t lost their houses. They also mentioned something else that seems to give us an advantage: strong families.

“Our family values are huge,” said Deborrah Mustachi, an educational assistant with three grown children. “From what I see on TV, I don’t get a sense of that in the States.”

Will Mr. Piketty catch on in the suburbs? I doubt it. (He hasn’t even caught on in France, where his message isn’t seen as especially new.) The obsession with inequality is overwhelmingly a concern of the liberal policy elites – the people who live in rich liberal coastal states, or Toronto’s Annex, or Ottawa’s Glebe. As economist Justin Wolfers has pointed out, these are the people buying this book.

Maybe the biggest social divide isn’t between the 99 per cent and the 1 per cent after all – maybe it’s between the policy elites and the masses. They really do live on different planets.

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