Inequality in America: Who’s to blame?

Looking at the gargantuan inequality that exists today, it’s easy to lose sight of the fact that, prior to the 1970s, increasing equality was the trend. That’s right—for over 50 years, the wealth gap was slowly closing. In the late 1970s, that trend was reversed and today the gap between the rich and the poor is the widest it has ever been. So wide, in fact, that most Americans underestimate the size of it, as I described earlier this week. (Scroll down on the right to see earlier posts.)

Who’s to blame? A synthesis of five new books on inequality tells us the answer. The source of the synthesis tells us something, too: The synthesis appears in an article by Justin Fox on, the online arm of the Harvard Business Review. HBR is not renowned as a font of liberal politics, so the message in this article is especially noteworthy.

Could “education” be the determining factor?

Education does play a role, but it’s not the whole story—or even the most important part of the story. For example, the 10% at the top of the income distribution got richer, in part due to higher educations. But many people in the remaining 90% of the population have high educations, too—yet their incomes stagnated or declined.

The HBR conclusion is this: The most important factor is the increasing success of the business community, starting just before the Reagan era, to influence policy makers. Back then, for example, business interest groups helped to kill a proposed office of consumer representation—the same sort of agency that Obama has now created.

Since then, Big Business has learned how to orchestrate legislation that favors the rich over the poor. At the same time, countervailing forces—such as labor unions—have been in decline. “No big organization had been looking out for the broader interests of the middle and working classes,” writes Fox.

Who’s looking out for you?

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