Monday, October 5, 2009

European Style Equality

Ross Douthat, the lone conservative voice on the New York Times' op-ed page, puts the Democrats on the spot for fixing the inequality they so often blame on Republicans:

This landscape will put liberalism to the test. Since Ronald Reagan was elected nearly 30 years ago, Democratic politicians have promised that their program could reverse the steady post-1970s growth of income inequality without sacrificing America’s economic dynamism.

With Barack Obama as president and Democratic majorities in the House and Senatee, we'll see if the Democrats can actually do what they promise.

There is, however, one way that a Democrat majority can plausibly bring down inequality: Just let government keep growing.

This is the lesson of Western Europe, where the public sector is larger and the income distribution much more egalitarian. The European experience suggests that specific policy interventions — the shape of the tax code, the design of the education system — may matter less in the long run than the sheer size of the state. If you funnel enough of a nation’s gross domestic product through a bureaucracy, the gap between the upper class and everybody else usually compresses.

But economic growth often compresses along with it. This is already the logic of our current fiscal trajectory: ever-larger government, and ever-slower growth.

This reminds me of a Churchill quote, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery."

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