All of these developments add to inequality. But none of these developments should have you reaching for your handy copy of the Communist Manifesto and the Marx-Engels forecast, "Society as a whole is more and more splitting into two great hostile camps, into two great classes directly facing each other."
Market forces are already in motion to change some of these trends. As more and more imitators follow the path of the original private equity players, those profits are being competed down--which is what happens to all builders of better mousetraps in the long run. CEO compensation is now under greater scrutiny than ever, as increasingly active shareholders and corporate boards, awakened to their fiduciary responsibilities by Sarbanes-Oxley, become less generous. More and more workers are enrolling in community (two-year) colleges to upgrade their skills. Wages in China and India are rising, easing some of the pressure on wages of unskilled workers in developed countries.
Throw in a bit of political pressure--easy to deride, but sometimes useful in injecting equity considerations into policy debates--and the prospect is that grumbling might produce some jiggling of the tax system, but no sustained assault on market capitalism--at least, not in America where we still believe that although academics Marx and Engels had it wrong, Deng Xiaoping, one of the founders of Communist China and for the last 18 years of its life its "paramount leader," had it right, "To be rich is glorious."
Did you miss that?
Do you think this is the ONLY time there has been large income inequality in this country, much less in the world?
Oeconimicus, have you ever heard of Adam Smith's Invisible Hand? |
