Attitudes Toward Economic Inequality

It is now an accepted fact that we experience inequality in various facets of our economic wellbeing. For example, the inequality could consist of wage differentials between younger and older workers, more and less educated workers, white and nonwhite workers, native and immigrant workers, male and female workers, union and nonunion workers, and so on. As a society we may examine disparities in other broader measures of economic well-being such as wealth accumulation or poverty rates. Some of these inequalities could also be analyzed in an international context (Blau and Kahn, 1996; Blackburn, 1997). The lessons we learn from critically examining, understanding, and debating trends in these inequalities will potentially benefit society by designing appropriate mechanisms to curb the evils of economic inequality. To assist in this critical mission, the American Enterprise Institute's monograph series on understanding economic inequality was launched, under the editorship of Marvin H. Kosters. It has been customary for the American Enterprise Institute to present and discuss drafts of its monograph series in a seminar format prior to publication. This latest monograph by Ladd and Bowman is based on historical and recent public-opinion-poll data and is divided into six chapters, including over fifty tables for the U.S., plus an extensive tabulated appendix consisting of cross-country comparisons on some of the key economic questions. The poll data used by the authors are from highly respected sources, covering the years 1939 through 1997. At the outset, Ladd and Bowman explore and synthesize the attitude of the general public regarding inequalities in possession of wealth, earning power, and money in our society in great detail. They also investigate thoroughly what we as a society want government to do about these perceived inequalities. The central message of this monograph is that we are a nation of great tolerance and contented individuals with a strong preference for the existing free-enterprise system and its supporting institutions. This observation seems to be amazingly consistent over time. However, such a strong belief in the power of markets can crumble if the majority of us feel that the rules of the game are unfair or favor only certain groups. In other words, citizens feel not only that the opportunities are available to most of us, but also that it is up to each of us to reap the benefits by rising to the occasion. Accordingly, most of us, though compassionate, rule out any major role for government in our economic lives. This behavior is very unique to America, compared to other industrialized democracies such as the UK, Germany, Sweden, and Australia. The book's introduction is brief but very crisp. The authors in my judgment provide a nice rationale for and scope of their monograph by drawing inferences from the popular press and citing appropriate quotes by highly visible contemporary politicians on economic inequality. Phrases such as "Corporate Killers," "corporate butchers," and "anxious class" catch the attention of even a casual reader. Chapter 2, "Opinions about Wealth," in my view is a masterpiece. The authors very skillfully analyze the term "wealth" from numerous angles. The spectrum ranges from a simple case