The economics of inequality
Inequality, power and policy conclusions
Dr. Matthias Schnetzer
December 23, 2022
A exercises power over B when A affects B in a manner contrary to B‘s interest. (Max Weber)
Person A has power over person B is equivalent to saying that A’s behaviour causes B’s behaviour. (Robert Dahl)
Rather than A getting B to do something B would not otherwise do, social relations of power typically involve both A and B doing what they ordinarily do. (Karl Marx)
I attempt to show that social classes should be analyzed as power and production relations between social groups, not just as deciles in statistical distributions.
The main question confronting us today is not really about capital in the twenty-first century. It is about democracy in the twenty-first century.
I start from the rather pragmatic concern that current levels of inequality are too high and that this outcome in part reflects the fact that the balance of power is weighted against consumers and workers.
It is my belief that the rise in inequality can in many cases be traced directly or indirectly to changes in the balance of powers. If that is correct, then measures to reduce inequality can be successful only if countervailing power is brought to bear.
PI 2159 Special Topics in Economic Policy | Winter term 2022/23