Greg Mankiw is making himself ridiculous – again

15 Nov, 2011 at 22:45 | Posted in Economics, Politics & Society | 1 Comment

During the last sixty years the top income shares in Sweden, the United-Kingdom and the United States have developed like this:

            Source: The Top Incomes Database

Commenting on the development of top income shares in different countries, Harvard economist Greg Mankiw surmises on his blog:

Might the rising share of the top 1 percent be related to the increasing use of English as a global language?

I’m not sure if this is meant as a joke or just another more or less ridiculous hypothesis on the same level as when Mankiw last weak tried to explain away the rising inequalities as having something to do with the return to education being “stochastic” (which I commented on here).

To me both these “explanations” are nothing but really big evasive actions trying to explain away a very disturbing structural shift that has taken place in our societies. A change that has very little to do with stochastic returns to education (and even less to what language you speak). Those were in place also 30 or 40 years ago. At that time they meant that perhaps a CEO earned 10-12 times what ”ordinary” people earns. Today it means that they perhaps earn 100-200 times what ”ordinary” people earns. A question of education? No way! It is a question of greed and a lost sense of a common project of building a sustainable society. And given the fact that – just eye-balling the data – there seems to be a structural shift in the 1980s, it is not improbable that the prime mover might be massive neoliberal deregulations of markets that gained momentum during that decade.

So, no, the rising inequality probably has very little to do with the rather – in this context at least – ridiculous causal factors Mankiw points at.  As Paul Krugman rightly has it, it probably has more  to do with income and wealth increasingly being concentrated in the hands of a very small and privileged elite – in Sweden as well as in the UK and the US.

1 Comment

  1. Leaving the issue if the hypothesis is right or not aside, has Mankiw thought about the implications of the idea that language affects equality in a society? Discursive struggles over social welfare and incomes does not really play well with noeclassical economics.

    Not that I think that Mankiw has thought of this implication – if he has thought about it all – but that’s what I came to think of when I read it.


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