The rich like to be hugged when they feel unloved, just like everyone else. And many of us are happy to help—the rich pay better. It’s not surprising, therefore, that public policy advocacy devotes a lot of energy to telling the rich that they’re okay, that their morale is of vital national importance.
Rising relative inequality in the developed world is an indisputable phenomenon, like aging and childless marriages. The affluent read about it, hear about it from the kids at Second Cup and confront it in front of their offices and on their porches on recycling day. For good reasons, it causes discomfort; historically, it leads to social and political trouble and immediately lessens the keen pleasure of material success.
In a lead editorial in the Financial Post, economist William Watson tells the rich to relax: the authoritative and comprehensive evidence of the OECD—that globalization is slowly pulling income groups apart—is complex and, anyway, only feeds impotent left conspiracy theories:
“Almost everywhere [over the last 25 years] there was growth at the bottom. But incomes at the top grew more quickly than incomes at the bottom. In effect, the rich were pulling away.
“You can imagine where this is going. Neo-liberal economic policies—deregulation, free trade, fiscal conservatism (yes, that would be neo-liberal conservatism)—are rewriting the post-war economic and social contract at the expense of the poor and to the benefit of the rich. Add in financial chicanery by giant banks and investment companies and corporate control of most of the world’s governments, but especially the U.S. Congress, and you have a conspiracy theory worthy of the NDP shadow cabinet.”
Watson tries to misrepresent the issue in two ways, by: (1) claiming the less well off didn’t fall back and (2) proving that left-wing conspiracy theories about the neo-cons and neo-liberals are stupid. These arguments are both beside the point, and they only bolster the prideful idea that everything would be fine if the Great Unwashed were less jealous toward those who got the best marks, took the risks, and put in the hours to get to the top.
In the United States, the world’s most important democratic capitalist experiment, there is ample evidence that the economic dividend from globalization has gone almost entirely to the top. It isn’t creating permanent jobs or increasing wages for others; it isn’t offering them much to maintain their support for open markets. Politicians in every region of America are popping up promising to stop big business “shipping jobs overseas.”
The problem is growing, even with the neo-cons out of office and with America’s multinationals responding successfully to global competition and emerging markets:
Thomas Piketty and Emmanuel Saez’s “study on economic equality showed that the rich have gotten richer—income for the top 1 percent rose by $261,930, or 30 percent, from 2002 to 2008—while the bottom 90 percent saw their incomes drop by $1,170, or 4 percent, on an inflation adjusted basis.”
The debate Watson is avoiding is not about the highly exaggerated accomplishments of neo-cons like Reagan and Thatcher, or of the extravagance of the rich. Can capitalism continue to best serve the general as well as a minority’s interests? The threat is to modern capitalism when it’s actually working—in a society where the unskilled, the Luddites, and the protectionists have the vote.
Inequality may be tainted as the language of the left. Conservatives who believe that progress and freedom are entwined, however, shouldn’t try to sit out this debate.
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