Alex Tabarrok demolishes nostalgia for the lost utopia of the 1950s. But what’s odd about this whole discussion is that it started with Ben Wallace-Wells profiling Paul Krugman who reflected positively on the more egalitarian Long Island of youth. But here’s Krugman making Tabarrok’s point:
This Edenic Merrick has long since evaporated, giving way to something more socially distended and bizarre. (Amy Fisher, for instance, attended Krugman’s high school.) Would he prefer Merrick in the sixties to his current life? “Knowing that I am in fact me, this is a much better society for me to live in. And not because of the money but because it’s more open, more tolerant,” Krugman says. The food, he says, musing, is “a lot better.” You can get really good coffee just about anywhere.
Nobody’s actually saying it would be better to return to the America of the 1950s. The question is whether we in some sense had to give up the much greater degree of household-level income equality that existed then in order to obtain the better, more tolerant America of today. You can draw various kinds of causal links between social progress and growing economic inequality, but it seems to me that none of this can even begin to explain the drastic escalation in the rewards going to a relatively tiny number of high-flying financiers.