The Great Polarization: How Ideas, Power, and Policies Drive Inequality

This volume of essays focuses on the rise of inequality in advanced economies, a phenomenon typically attributed to two forces: technical change that has favored well-educated, highly skilled workers and globalization that has thrown less skilled workers into competition with those in the developing world. Although they do not dismiss these ideas, von Arnim and Stiglitz observe that inequality outcomes vary enormously across countries similarly exposed to technical change and globalization. Rising inequality has been more pronounced in the English-speaking world than in other advanced economies. Those differences arise from the economic, political, and social policies that have accompanied technical change and globalization. The contributors discuss tax-and-transfer policies as well as those dealing with education, competition, intellectual property, labor organization, and collective bargaining. Throughout, they emphasize how the interests of economic and political elites often lie behind policy choices. Such arguments are not new, but they are made here with singular clarity and accompanied by extensive documentation, mainly (although not exclusively) relating to the United States. Contributors are less convincing in specifying how governments might pursue alternative approaches in the present political climate. It is easier to imagine inequality-reducing policies than it is to determine how they might be implemented.