Economists Care Too Much About Inequality
The raging academic debate about income and wealth distributions shouldn’t define policy making.
Wealth versus happiness.
Photographer: Fred Dufour/AFP via Getty Images
For economists, the biggest problem with inequality is how little they really know about it. For the rest of us, the question should be whether knowing more makes sense as a priority.
A recent edition of The Economist contains two primers on how the popular inequality research of star economists such as Thomas Piketty and his frequent collaborators Emmanuel Saez and Gabriel Zucman, showing that the rich are getting richer while the poor are getting poorer, has been challenged by other academics. Most recently, Gerald Auten of the U.S. Treasury Department’s Office of Tax Analysis and David Splinter of the U.S. Congress’s Joint Committee on Taxation took issue with how Piketty, Saez and Zucman used tax data to come to the conclusion that the wealthiest Americans’ share of national income has risen fast in recent decades while that of the bottom 50% has decreased. Auten and Splinter calculated that the income shares of both the richest and the poorest have barely changed since the 1960s.