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Making Sense of Inequality
From the August 13, 2012, issue of NR

Timothy Noah, author of The Great Divergence

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The recent stagnation of male earnings has led many analysts to argue that middle-class families have stayed economically afloat only because wives increasingly bail out the boat. Noah cites the work of lawyer (and U.S. Senate candidate) Elizabeth Warren. There are three problems with the theory that families’ gains have come from the employment of economically pressured wives. First, all signs are that the embrace of work among wives is part of a longer-term story in which women get to lead more fulfilling lives. In developed countries around the world, birth rates have declined, marriage and parenthood have been pushed off to increasingly older ages, and women have had more educational opportunities. A June 2000 NBC News/Wall Street Journal poll found that just one-fifth of married parents had a wife who worked “to make ends meet” but preferred staying home. Second, husbands’ earnings are likely lower than they would have been because some of them have reduced the hours that they work and changed the type of jobs they take in response to the money their wives now bring in. Finally, husbands’ earnings would be higher today if not for the increased competition from working wives.

Reflecting his misguided view that it’s been downhill for the last 50 years, Noah titles his first chapter “Paradise Lost.” He writes that the political economy of the Golden Age “represents a path that would be abandoned in the late 1970s,” suggesting that paradise was not so much lost as thrown away. But he never provides a convincing case that things might have evolved differently. Economic growth slowed throughout Europe after the 1960s, and median-income growth since 1980 has been no better in Canada, France, Germany, or Sweden than in the U.S.

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Noah says we should worry about rising inequality, but he evades the central questions: Do gains at the top really come at the expense of the incomes of the middle and bottom? If they do not, do the gains worsen inequality of opportunity in the next generation? Noah’s discussion hardly even attempts to make the case that inequality matters. Instead, he counters various arguments that inequality does not matter, which he invariably describes as “conservative.” He spends a single paragraph shrugging off the view that absolute living standards are more important to people than equality.

On the question of income mobility, Noah casually dismisses the possibility that having a higher absolute standard of living than one’s parents is more important to Americans than ending up at a higher rank than one’s parents when assessed against peers. But if “absolute mobility” is what really matters to Americans, and if the U.S. looks more impressive than other countries in this regard, then the American Dream doesn’t look quite so delusional, nor ambivalence about inequality quite so misguided. These are empirical questions that have not been answered, but Noah cannot even imagine a story in which Americans’ conceptions of their opportunities are consistent with reality.

Noah closes the book with the obligatory policy-recommendation chapter that so often proves unsatisfactory even when written by genuine policy experts. Noah wants to “soak the rich,” create a public-jobs program, “impose price controls” on colleges, “revive the labor movement,” and “elect Democratic Presidents.” This last recommendation derives from research by Princeton political scientist Larry Bartels claiming to show that the middle class and poor do better when a Democrat is in the White House — research debunked, separately, by National Review contributor Jim Manzi and political scientist James Campbell as dependent on fragile methodological specifications.

In the course of the book, Noah deftly explains the relative roles of discrimination, rising economic returns to education, increased trade and immigration, declining unionization, and public policies in contributing to rising inequality. Where the topics are narrower and more clear-cut, Noah is on firm ground in his presentation of the evidence and his conclusions about where it points. Where they involve broad questions of economic and political power, his ideological presuppositions tend to bring back one’s frustration, even as his writing remains engaging. I learned a lot from Noah’s thoughtful mini-history of the labor movement, even as I marveled at his refusal to concede that there is any legitimacy in corporate concerns about the fairness of the regime that New Deal policy created. His chapter focusing on the unique factors behind the divergence of the top 1 percent from everyone else is particularly well done, but readers who are not inclined to view the top 1 percent as the “stinking rich” will have to get past Noah’s demagogic chapter title.

It is probably too much to ask of an inequality primer that it be engaging and simultaneously transcend the ideological commitments that taint so much treatment of the topic. Inequality, after all, is an issue that inspires even Nobel laureates to make sweeping arguments that academic research does not support. At least Noah writes well. But I do hope that in five years I can refer interested parties to a second inequality primer against which The Great Divergence can be balanced.

Scott Winship is a fellow at the Brookings Institution. This article appears in the August 13, 2012, issue of National Review.



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