VIEWS OF EQUITY THROUGH GOOD TIMES

I have made the case in this blog that the prominent view of politics among our citizens is the natural rights perspective. To summarize this view, it is a highly individualistic perspective in which we believe governmental action should be kept to a minimum. The emphasis is on the right to choose and do those actions we, individually, see as best for us as long as we do not interfere with anyone else enjoying the same latitude in his/her choices. Under such a view, we promote competitive relations usually under the auspices of a free market. The view is highly associated with capitalism. We have adopted this view to such a degree that we have begun to call it the “American way,” as if this bias has always been the way we see politics and, in general, social arrangements. While American culture has been from its very beginning a relatively individualistic one, to the degree this view has “taken over” is a product of the last fifty to sixty years – since the end of World War II. In terms of more specific policies, this view has encouraged reduced governmental regulations – which have increased, but mostly as a result of the globalization of the economy and the resulting worldwide markets. It has also encouraged a weakening of labor unions and of the role of government in determining labor relations between workers and employers. Overall, the strength of labor laws has been weakened. Oversight of markets became much looser. All of this gained impetus in the years leading up to 2008.

Then came the financial crisis that led to the worst economic recession since the Great Depression of the 1930s. This development brought into question, among informed circles, the prudence of a view that promotes such a hands-off approach by government in relation to economic activity. As a result, the Congress passed the Dodd-Frank Act to reimpose regulations on the buying and selling of securities. But what of the general public and its views regarding how free economic actors should be? Have the American people, in general, been able to turn on a dime and seek another view to replace the extremely laissez-fare attitude that had become so prevalent?

According to Leslie McCall,¹ the public had reached the highest point of support for laissez-fare in 2008 – at least as measured by available survey data on our tolerance of inequities, a by-product of a laissez-fare economy. But this high point was not reached in a straight line over the years and analysis of this progression provides evidence that suggests a period of time in which the whole view came into question not during a time of economic distress, but in a time when economic conditions were good and improving. She points out that during the nineties, when the nation was enjoying a healthy economic uptick, that there was an increase in questioning the results of this uninhibited economic policy. That is, people began to question the level of inequality that was increasing since the seventies. Robert Y. Shapiro, reporting on McCall's research, writes

… there is an unfairness suggested in the more-pronounced beliefs in the 1990s, in which rising income inequality is seen as benefitting mainly the rich and not producing prosperity for all. … [This time of improved economic conditions] signifies opportunity, so that what has changed in the public's mind … is that rising income inequality can affect individuals' perceptions of opportunity.²

Shapiro points out that this finding goes contrary to what was previously understood to be the relation between economic conditions and the public's view of opportunity. That is, it was believed that good economic conditions would correlate with a higher sense of opportunity and therefore a higher level of tolerance toward or, at least, ambivalence over degrees of inequality in regard to opportunity – that such views would hold off calls from the public for a redistributive policy response to meet existing inequality. Instead, and one needs to remember that inequality grew in the 1990s, McCall finds that the improving economic conditions coexisted with a more prevalent belief that there was no longer a rich segment of the population that deserved its riches. What seems to have come under question was whether the contemporary rich should be “celebrated” for ushering in equitable growth – a tide lifting all boats. The general public seems to have begun establishing a general view of the rich as undeserving “who are implicated in producing a form of inequality that is perceived to either symbolize or directly contribute to limited opportunities”.³

What I see is a tension among the populous or among different segments of the population. That tension is between what has become more and more obvious, the extreme inequality of income between the very rich and the rest of us, and the prevailing political view of the natural rights perspective. When the financial crisis hit, I would argue that the popular view was still under the influence of the heightened support for the more individualistic perspective. What complicated the distinction between views of individualism and a more collective, government friendly view were a few economic and social conditions. One, the crisis and the resulting recession did not reach Great Depression levels of misery. Yes, the recession was severe, but we did not have the bread lines and other extreme deprivations that the American society suffered during the Depression years. Two, despite its salutary effect, the bailing out of the Wall Street banks and the auto industry united the dismay of both extreme right-wingers and many on the left, an anti-corporatist faction of the political spectrum. Both of these factors muddied the waters concerning the justification for strong governmental response in regard to the economic dangers facing the nation. There resulted no clear lesson as to the need for a strong government presence in the operations of the economy. Therefore, in 2008, the public which became enamored by the more laissez-fare policies of the George Bush Administration did not find it easy to give up on those biases through the time when the dam burst and the economy fell into the Great Recession.

Since then, we have had the Occupy Wall Street movement which has brought to the fore the inequality issue in a much clearer perspective. It has become common knowledge of how unequal income has become. We are even becoming aware of how unequal wealth is. While the defenders of the inequity have tried to steer the language of the discussion in terms of “either/or” – either we have an economy that rewards those who run businesses and create jobs or we don't – many more Americans are becoming aware that the question has more to do with the extremity of the disparity than whether we should reward the successful. What I find worth taking away from McCall's research is how expectations, especially during better economic times, are affected. Increased economic activity does not help in hindering our perception of how opportunities are affected by a mal-distribution of income and wealth. Perhaps, as the economy improves, we will not forget about this issue of inequality and begin to demand, from the rich, behaviors and policies that will lead us to the judgment that they are, in effect, deserving.

1McCall, L. (2013). The undeserving rich: American beliefs about inequality, opportunity, and redistribution. New York, NY: Cambridge University Press. The presentation of the study in this posting is based on a book review by Robert Y. Shapiro which appears in Political Science Quarterly, Winter 2013-14, 128 (4), pp. 750-753.

2Ibid, Shapiro, p. 752.

3Ibid.