As econoblog readers will know, Emmanuel Saez has won the prestigious, Nobel-forecasting Clark medal for an economist under 40. Per Economic Principals,
His most striking finding has been to confirm the widespread intuition that income inequality has been increasing that one of the key regularities of post-World War II economics had fallen apart. It was in 1955 that Simon Kuznets, then of the Johns Hopkins University, observed that inequality in developing countries tended to describe an inverted-U, rising substantially for a time as workers moved from farms into industrial cites, then steadily diminishing as output grew and gains from increased productivity were more evenly distributed.One common reading is that this award signals a progressive shift in the doxa of professional economists away from Chicagoan defenses of market capitalism as the source of common good, and surely this is to be desired. Moreover, the specific details and data the Saez provides will likely be highly useful as ground for further work.Saez demonstrated that the U had decisively turned right-side up that inequality has been rising steadily for thirty years instead of falling. Working backwards from tax data to infer household income back to 1913, when the income tax was established (modern government income surveys came into being only in 1960), he found that families making up the top ten percentile of the income distribution had been steadily increasing their share of all income since the 1970s
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But still: huh? What puzzles us here at sugarhigh! is the how Saez's findings are revelations, or even news. This information that there is an increasing inequality of wealth distribution in the U.S. is common knowledge. Not an "intuition" which has finally been verified; it's been part of a statistically based and structurally sound series of accounts in a dozen books from the last decade. And this is listing only what's on the bookshelves here at headquarters.
For one blindingly obvious example, see David Harvey's A Brief History of Neoliberalism, which perhaps suffers from being published on the obscure Oxford University Press. This book, and numerous others, lay out the data with formidable clarity, and also succeed in locating the surging disparity (as both outcome and cause) within a narrative of economic change which begins about 35 years ago ("since the 1970s," just like Saez's breakthrough).
The whole news event of this prize, then, is on par with granting the latest Fields medal for long division. What to make of this? Is the fact that the guild of professional economics doesn't know the extant scholarship relevant to their own field more shocking than the fact they are just reaching these easily reachable and socially fundamental conclusions out now? Or is the oddest element the hubris whereby knowledge can't be true despite empirical evidence until a guild member says it? In any case, welcome to reality, economists: you are making any attempt to take seriously your institutional field rather challenging.
Posted by jane at April 29, 2009 07:25 AM | TrackBack