For 25 years, he has argued:
globalization and
technological change have made most of us less competitive. The tasks we used
to do can now be done more cheaply by lower-paid workers abroad or by
computer-driven machines.
My solution—and I’m hardly alone in
suggesting this—has been an activist government that raises taxes on the
wealthy, invests the proceeds in excellent schools and other means people need
to become more productive, and redistributes to the needy. These
recommendations have been vigorously opposed by those who believe the economy
will function better for everyone if government is smaller and if taxes and
redistributions are curtailed.
But while this explanation is important:
I’ve come to believe it overlooks a
critically important phenomenon: the increasing concentration of political
power in a corporate and financial elite that has been able to influence the
rules by which the economy runs. ....Most fundamentally, the standard
explanation for what has happened ignores power. As such, it lures the
unsuspecting into thinking nothing can or should be done to alter what people
are paid because the market has decreed it.
Most fundamentally, the standard
explanation for what has happened ignores power. As such, it lures the
unsuspecting into thinking nothing can or should be done to alter what people
are paid because the market has decreed it.
His cure?
Ultimately, the trend toward widening
inequality in America, as elsewhere, can be reversed only if the vast majority,
whose incomes have stagnated and whose wealth has failed to increase, join
together to demand fundamental change. The most important political competition
over the next decades will not be between the right and left, or between
Republicans and Democrats. It will be between a majority of Americans who have
been losing ground, and an economic elite that refuses to recognize or respond
to its growing distress. (see here for entire article)
I agree with Reich, that globalization and technology has changed the ideals of the typical working individual, especially in the U.S.. The activist government that Reich explains as, "an activist government that raises taxes on the wealthy, invests the proceeds in excellent schools and other means people need to become more productive, and redistributes to the needy." is a great idea, but much of our current government is made up of the wealthy, who are not going to want to tax themselves and redistribute their own money. In my opinion, this would basically have to be the majority of Americans, who are not considered to be in the economic elite, overthrowing the government; somehow demanding fundamental change and not giving the current government any other option. I think I could see this happening in the future due to the widening gap between the majority of Americans and the economic elite. The first step would probably be electing representatives and government officials that are more like the "average American" that Reich explains in this article, but this also means that "average Americans" need to run for these political positions. Honestly, have hundreds of millions or billions of dollars baffles me. What can one individual or family even do with that much money? It really does bother me that some people have so much money that they have no clue what to do with it, while others are homeless or are struggling to feed their families. I hope that one day income can be slightly redistributed, so that the gaps between the economic elite, the average american, and the Americans that are barely getting by are not so large.
ReplyDeleteWe've been talking about what causes the financial crisis but not much about its consequences on people. I find this article eye-opening because it points out another cause for inequality that is not always discussed, "the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs." It would be interesting to watch if there's really the political competition between the majority of Americans and the economic elite. Wolf suggested that there should be a reform to the financial system. Would this competition be one of the triggers for such reform?
ReplyDeleteI agree with Veronica and Hang. I think there needs to be a fundamental change with the U.S. government system. Also, I think there may be a political uproar between the majority of Americans and the economic elites. I do agree that the majority of Americans should vocalize their opinion and demand change. Personally, I think there needs to be a more political representative that accurately reflects the majority of the Americans citizens. However, I think there needs to be restructuring of how one becomes runs or is selected to office. The reason being, the candidates who run for office usually have a lot of economic resources and connections. This is the reason why there are are economic elites who get elected for office, which further the perpetuates the cycle of income inequality and income gap.
ReplyDeleteI agree with Reich's suggestions in the article although they tend to lean more towards a socialism system. As suggested in some of the comments above , I also believe in a new American government system which will fight against inequality instead of being a source of it.
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