As noted earlier (6.7.1), there is a stark difference between the views of individualists and collectivists on ‘fairness’, and a government’s role in reducing economic inequality. OECD data showed that inequality of disposable income in the U.S. is among the highest in the OECD countries, so the policies of the two American political parties are contrasted here as an example of conflicting political viewpoints on inequality:
· The Democratic Party has some collectivist leanings: the wish to prioritise ‘the common good’ (6.2.3). It is taking aim at Republican economic policies, as illustrated by this excerpt from the 2024 Democratic Party Platform: “They’re rigging our economy for their rich friends and big corporations, pushing more trickle-down tax cuts for the wealthy and powerful”. Democrat policies are “To grow our economy from the middle out and bottom up, not the top down. To reward work not wealth.” That choice of words is an indirect reference to ‘middle-out economics’, which has been shown to greatly benefit economic growth (3.5.6.4).
· The 2024 Republican Party Platform takes an individualist line (6.2.2). It promises to “slash Regulations that stifle Jobs, Freedom, Innovation and make everything more expensive” and “Make Trump Tax Cuts Permanent”. It has been testified that Extending Trump-Era Tax Cuts Would Worsen Income Inequality though:
“Permanently extending the cuts would benefit households in the top 1% more than twice as much as those in the bottom 60% as a share of their incomes – providing a roughly $41,000 annual tax cut for the top 1% compared to $500 for households in the bottom 60%, on average – at a cost of around $300 billion per year,”
The conflicting political viewpoints on inequality can be summarised as a difference of opinion about whether it is important to people. Both political parties believe that economic growth would benefit the population, but Republican policies for growth would benefit the wealthy and increase inequality whereas Democrat policies aim to benefit those on lower and middle incomes. There is a similar contrast between the UK Conservative and Labour parties.
A suggested answer, to the question of whether or not inequality is important, is to say that it depends upon whether people feel comfortable with their economic circumstances. If people are struggling to survive whilst others are excessively rich, they start to look carefully at inequality. They become angry if the politicians can be accused of favouring the rich: sleaze, as described earlier (6.4.5.3). Action to reduce poverty becomes a political wedge issue.
(This is an archive of a page intended to form part of Edition 4 of the Patterns of Power series of books. The latest versions are at book contents).