The Economist’s latest issue on the “new politics of capitalism and inequality” should be required reading for anyone who cares about either of those subjects. The magazine reports on the uneven rise of inequality globally and the inadequacy of conversations regarding what to do about it. The editors throw down an imperative challenge for leaders to create “True Progressivism,” that is “to come up with ways of mitigating inequality without hurting economic growth.”
The magazine critiques both left and right, saying that “a failure of ideas” is at the core of the problem.
The right is still not convinced that inequality matters. The left’s default position is to raise income-tax rates for the wealthy and to increase spending still further.
The magazine advocates a three-pronged solution: 1) Attacking monopolies and vested interests. 2) Focusing government spending on the poor and the young with the aim of improving pre-school education and retraining the jobless. 3) Reforming taxes to raise money more efficiently and progressively.
Raising an alarm about inequality and advocating these types of solutions is nothing new. What has changed is the volume of voices now participating in the conversation. For anyone but a presidential candidate, 2012 seems to have thus far been a conscious-raising year for the inequality issue.