Capitalism and Inequality: What the Right and the Left Get Wrong

Jerry Z. Muller writes about Capitalism and Inequality: What the Right and the Left Get Wrong in the March/April 2013 edition of Foreign Affairs.

Muller describes what the acceptable limits of the debate about inequality are:

Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it.

Muller seems to be in the managed Capitalism camp.

Muller explains the reason for inequality as:

Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it — because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords. (p.30)

So, Muller thinks that failure to achieve is the individual's fault. This is an interesting approach to take, however, because Muller admits that inequality arises naturally in the Capitalism through the inequality of opportunities which individuals are ill-equiped to take advantage of.

Muller is clearly worried that this inequality will lead to mischief caused by those who fail to understand that they are the problem, not the system:

Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism — because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large. (p.30)

What Muller wants is:

Contemporary capitalist politics need to accept that inequality and insecurity will continue to be the inevitable result of market operations and find ways to shield citizens from their consequences — while somehow still preserving the dynamism that produces capitalism's vast economic and cultural benefits in the first place. (p.31)

Emphasis Mine

In Muller's view, there is no longer need to pretend that Capitalism will eventually make everyone better off. That is a myth.

What Muller fails to realise is that such government intervention requires teh exapnsion of the tax base which the rich are resisting. Since the wealth is accumulating at the top end, this means that the tax base is actually shrinking. So, we have the need to increase the tax base to avoid unrest, while those who are in danger refuse to sacrifice more of their wealth to do so.

All we need now is for some silly bitch to say: Let them cake!