Robert Solow in Conversation with Paul Krugman: "Inequality: What Can Be Done?"

On May 1, 2015, Robert Solow (Professor of Economics, Emeritus, MIT) and Paul Krugman (Distinguished Professor of Economics, The Graduate Center, beginning Fall 2015) discussed Anthony B. Atkinson’s new book, “Inequality: What Can Be Done?” (Harvard University Press, 2015: www.hup.harvard.edu/catalog.p...) at the Russell Sage Foundation in New York City.
Solow and Krugman’s conversation was introduced and moderated by LIS Director Janet Gornick, professor of Political Science and Sociology at the Graduate Center.
The British economist and renowned inequality scholar Tony Atkinson (Oxford and London School of Economics) argues that economic inequality has reached unacceptable levels in many countries. In this ambitious book, Atkinson lays out an agenda for reducing inequality. His policy proposals span five areas: technology, employment, the sharing of capital, taxation, and social security.
“Inequality: What Can Be Done” is a vigorous and powerful call to action, rich in theory, evidence, and practical experience. Solow and Krugman examine the desirability, viability, and feasibility of Atkinson’s policy recommendations-with an eye toward translating his arguments into the United States context.
Further, Atkinson discussed the book in a 35-minute presentation taped in London, April 2015: • Inequality: What can b... .
Sponsored by the Luxembourg Income Study (LIS) Center

[@realtrance]

Great. Maybe in two generations we can get back to where we were a century ago. How inspiring.

[@markteague8889]

The reality is that change can and sometimes does come very quickly when the populace resorts to violence. I'm not promoting that. It is just a reality of any civilization that when power rests in the hands of too few it is often rested away from them by force. The powerful do not give up their privilege and authority quietly or easily. We tend to pride ourselves in the USA on peaceful transitions of power through periodic Democratic elections. In the past experience of the United States it has sometimes involved assassination attempts on such wealthy and powerful figures as Henry Clay Frick and William Mckinley. While assassination and vigilantism are dangerous, one could argue that Frick was deserving of such having been responsible for the deaths of ~2200 citizens of Johnstown when he helped create the conditions for the flood that took their lives by insisting that the engineers lower the dam so that his carriage could cross it gaining access to their society's Gentleman's Club on the far side of the river. Did J.P. Morgan, John D. Rockefeller or Andrew Carnegie believe that they were signing Mckinley's death warrant by essentially buying the U.S. Presidency for him to prevent antitrust measures from being enacted by a figure such as William Jennings Bryan?

[@ArthurWuYeah211]

there is a reason Neo-Keynesian Economics did not remain the orthodoxy. There are many shortcomings to that orthodoxy, we may view them with glinted glasses because it is nostalgic but it had real problems.

[@webcelt]

Have the moderator move closer to the mic. She's nearly inaudible. Turning up the sound in general would be a good idea. Maybe it's just my PC, but I had to have the volume nearly maximized in order to hear anything.

[@pjamesbda]

Any book on Inequality that goes beyond "theory" and "discussion" and purposes action, is a welcome change (even if that action were in-action). We're starting to feel it has become a bit like racism, in that the more we go on about it, the more energy we feed it, and the worse it gets. What if we stopped thinking of having "things" or of being more equal as defined by those terms, and focus instead on over coming what we think is an innate desire for over accumulation? I think we might find it isn't (innate that is).

[@rd264]

Our economy is said to be doing well --- but only if if you look at the stock market, which is wealth held by a small wealthy share of the population. Unemployment figures suggest low unemployment -- but only if you look at those figures and ignore all the unemployed that are not on the rolls and looking for work, the actual numbers of unemployed people. The national deficit is huge and rising, but PK has said for a long time that deficits dont matter- we can just print more money! but rising debt payments eat up the annual budget and thus debt reduces the cash available for social needs like health care and drives even further borrowing that undermines society.

[@unbrnwsh]

Creating a new billion dollars in purchasing power in the hands of the poorest could do miracles to the economy. Also for the benefit of the libertarians who may scream that it is not fair and the .01% that they adore also be given an equal amount to those at the bottom, not to worry since that billion dollars eventually will trickle up to the pockets of the .01% since they own all oligopolies that sell the poor things if not through corporate welfare given to the .01% by the government they own.

[@easytherepilgrim2339]

Andrew Weeraratne You're a Communist. You would steal my hard-earned money and just hand-it-out to whoever you see fit. Probably bribe votes for other Communists. That's the worst thing you can do for the economy - create false incentive NOT to work. And the worst form of class warfare. But even if it did work (which it wouldn't)....you have no right to do that! Unless you're a Communist dictator. Sorry for picking on you....but you're the first commenter. I suspect there are many other Communists followers of Paul Krugman here.

[@unbrnwsh]

EasyThere Pilgrim I am against any sort of welfare since it demoralizes people and I am against taxing income. If you watch MMT people (Warren Mosler and Stephanie Kelton etc) you will learn that you don't have to tax people for govt to spend money. In the USA most of the welfare goes to the .01% wealthiest few (read "Free Lunch" ), so I am not sure what you are talking about. The fact is when the poor don't have employment government has a duty to create employment since it helps the capitalist to produce since there will be people with money to buy them. I feel you are bit clueless as to what's going on this country so just throwing slogans. I don't blame you since you cannot learn the truth by listening to corporate propaganda by the media. I have a business and it is only when the consumer has money my business will be successful. When there is no employment and when people have no money I cannot run my business.

[@easytherepilgrim2339]

Andrew Weeraratne Oh, well you sounded like you wanted to just hand money to people. Not sure what you're advocating I guess. But....most of the welfare does NOT go to the rich. The vast majority goes to the poor. America spends more on these handouts (to the poor, but including social security) than it takes-in in total revenues. It's what's killing the economy. Everything else is secondary. Peanuts.

[@unbrnwsh]

EasyThere Pilgrim You have your facts wrong as most people do. The Federal Reserve hands out welfare to the .01% each month and the Treasury do the same to almost to all major corporations adding up to trillions. Social security is a retirement program and if you really know the facts it is stacked against the working poor. You have to know the facts. Private Insurance annuities are a bigger welfare program than SS if you look at the facts since those annuities guarantee no downside in the market that is not possible and they depend on government to bail them out in the event all pull out money at the same time. There are only a few nations where all citizens equally get a humane social safety net (Scandinavia, Swiss and Germany for example) perhaps according to the principles of Christ that advocate taking care of the poor and the sick. The rest of the nations including the USA the major welfare programs go to the very wealthy because they write the laws while the media they own convince you otherwise. I have no reason to convince you so continue to believe what you believe if that makes you feel good.

[@easytherepilgrim2339]

Andrew Weeraratne You're facts are wrong. Simple common sense. Take a look around. Open your eyes. An incredibly large amount of Americans receive handouts. Welfare, disability, early social security, housing credits, food stamps, money for each kid, money for taking-care of other people's kids or old people, all kinds of loan and give-away programs, etc., etc. The list is endless. Half of Americans receive this. You can get 'disability' for ADD, fibromyalgia, bipolar....it's a Communist scam. 40% of working-age Americans do NOT work. Then add-in regular social security. Then add-in government-workers' pay and pensions. THESE ENTITLEMENTS ARE WHAT'S KILLING THE ECONOMY. Nothing else matters. Giving tax-incentives to businesses is NOTHING.

[@G11713]

At about 48min, Rober Solow explained that most legislators, even a lot of democrats, prefer and expect businesses to resolve the inequality issue by paying people at the top less (not by paying those at the bottom more). Effectively, they expect executives to cut their own salaries for the common good. If such legislators are earnest, then they are clearly too stupid for office.

[@markteague8889]

It's just double speak.

[@roc7880]

so they should be forced by law to pay workers more every time a ceo gets a bonus.

[@roc7880]

only Samuelson is missing from the panel.

[@johnwaller9797]

Where do these guys teach again? Just who do they think they are teaching?

[@TheWhitehiker]

talent and perseverance decide success in life, but there should be equal opportunity, that is, equal starting points; with socialism/communism, the commissars decide all; have freedom while keeping an eye on the very rich.

[@schmetterling4477]

I grew up under Communism. On paper we were the largest banana producer on the planet. It was just strange that there was never even one banana in the store. ;-)

[@TheWhitehiker]

True that. 'Yes, you had no bananas!'@@schmetterling4477

[@lyhs0219]

But even service jobs can now be outsourced

[@stephenyang2844]

During the WWII US economy was booming because everyone was contributing and inequality was at the lowest, society was functioning optimally. Until, Ronald Reagan became president, reducing the tax rate on the richest by nearly 2/3; started a long march towards inequality til today. Stalled growth, homelessness and starvation are signs of extreme inequality. With a larger portion of our population striving to feed and house themselves, not contributing to development, our society operates suboptimally.

[@borninthenorthMi]

Chad Solow and Virgin Krugman

[@mr.wrongthink.1325]

I agree excess inequality is a problem. The rich buy political power, for example. This leads to something that could be called neo-feudalism. Cumulative wealth by inheritance is unjust and should be disallowed. Attempt to dismantle a system based on it is the real reason for the French Revolution. Money of a dying person should be fully confiscated by the government an redirected to public and free education and health. But, at 9:03 the guy says that people that believe that we should guarantee equality of opportunity, but not equality of outcome, are phonies. Further, he says at 9:59 he says that in unequal society cannot have equal opportunity. This maybe unfortunate and perhaps society could and should make sure it is fairly minimized, but there is no way you can make functioning society that is perfectly equal. Those that think that are fools.

[@gorthorki]

+Andy Hoffman "Money of a dying person should be fully confiscated by the government an redirected to public and free education and health." If you like communist so much, send yourself to a gulag.

[@mr.wrongthink.1325]

+gorthorki I don't care what is communism. I never studied it. I think communists would not let anybody get ahead. I do not believe that. I believe everybody must be able to get ahead by talent and work. Not by inheritance. Otherwise we would have monarchy and aristocracy, i.e., feudal system again. (And that's what is happening slowly now.) You may be a talented peasant boy, and you would need to remain a peasant boy, because you made the mistake and got yourself born to poor parents.

[@Gabriel-nj6ks]

@@mr.wrongthink.1325 ''I don't care what is communism. I never studied it. '' That's why you are saying non-sense like this.

[@mr.wrongthink.1325]

@@Gabriel-nj6ks Which part is nonsense?

[@windokeluanda]

Cumulative tax... interesting...

[@Rob-fx2dw]

Kruman is Nuts. Firstly believing the threat of Aliens invading would solve problems in the economy and secondly by saying " The idea of something like equal dignity even though, yes some people, no one expects exact equality or anything close to it, but the idea that everyone feels correctly that they are being treated as a person of equal worth with other people" and extreme inequality is inconsistent with that". Who feels they are being treated as a person of equal worth when they have been frugal, worked harder and for longer than others and are getting less or equal reward for it compared to someone else who has contributed considerably less and an economist tells them that some enforced equality will make things better so those with more have to subsidize those with less because he believes that is better despite his own income being massively higher than the average person.

[@kohlopez]

you missed the point- it's equality of opportunity that is being pursued NOT of outcome

[@Rob-fx2dw]

@@kohlopez How do you measure equality of opportunity ? How after do you have addressed it do you measure who has had an equal opportunity given people have different skills that they are born with or have been exposed to because of their differing experiences through life or their personal choices. Who decides what is equal to start with? Is equality being an airline pilot as compared to an engineer or a lawyer or scientist? Which is more than the other if they differ to start with and who decides?

[@kohlopez]

@@Rob-fx2dw The pursuit of equality of opportunity is an attempt to provide the facilities of good schools, nutrition , health care normally enjoyed by the more affluent so as to better compete.Just trying to aid the marginalized.

[@Rob-fx2dw]

@@kohlopez I don't argue with your motives but you should be addressing what is actually achievable based on reality and not some utopian sense of why you hope can be achieved but is clearly against any rational understanding based on clear observations. The clear facts are that people have different skills and that is innate in humans as well as all animals. You can see that difference in people if you are observant enough to do so. No scheme of government or law can produce equality. All it can do is ignore the diversity by applying arrogantly based beliefs and dumb down people because it treats people as equal in skill when they are so different.

[@kohlopez]

@@Rob-fx2dw you really are not trying to understand the cause and effect of inequalities and the necessity to mitigate the uglier consequences. This was discussed by the two eminent economists but to no avail. What two Nobel winners fail to convince you,no one can.Well let's agree to disagree.Good night.

[@paulwarren796]

"END THIS DEPRESSION NOW " TALKS ABOUT LESS EXPENSES OF HAVING THE EURO AS OPPOSED TO INDIVIDUAL CURRENCIES . PERHAPS WHILE WE HAVE THE QUEEN OVER HERE WE COULD ESTABLISH A SINGULAR CURRENCY BETWEEN US & CANADA....... PWW PS OF COURSE , THE US COULD DESPERATELY USE THE BETTER EDUCATIONAL SYSTEM OF CANADA'S TO BRING UP OUR AVERAGES IN ACADEMICS IF WE MERGED WITH CANADA . POOR CANADA , I BET THEY DON.T WANT TO .

[@alvaroanton636]

Listen, if economic rent explains why inequality is becoming increasingly large, entrenched and systemic, why don’t we just tax rent and then use the income to fund a sane and logical welfare state? Tax land rent at close to 100%, tax or control all monopolies, use the money for decent public healthcare, decent public education, unemployment benefits, old age and disability pensions and then if anything is left pay a citizen’s dividend. I think that’s the way to go.

[@criticalcog6363]

Henry George’s LVT was and still is one of the best attacks at the root of inequality.

[@saturngenesis1306]

@@criticalcog6363 Meh.

[@nickvoutsas5144]

There always seems to be a pendulum movement in economics and maintaining a healthy swing keeps the economic system in Check. There will always be inequality but once this inequality starts destroying the dignity of the poor then we should re look at our economic theories.The eco system has hugely favorited very few and we should incentivize that few to attain their growth by uplifting many less fortunate. Perhaps we measure wealth in too narrowly as meaning money rather than uplifting your fellow man.

[@earlpierce7173]

Why beat around the bush?? In order to truly control inequality, We need wage control from the bottom to the top. We need to replace private banking with publicly owned banking. We need to make credit lines available to everyone when they become adults, and tie taxes paid in with repayment of credit lines. Allow everyone to have an equal grant to guarantee college or trade school opportunities. Money is created from nothing as a convenient means of exchange to benefit society as a whole, so let's talk and act like it already!

[@AmolAmrit]

First it's repercussions will be out of our hand to control.

[@Syncopator]

"Chelsea Clinton's second term" -- gak! If that's where were headed, we're doomed! We've had enough nepotism in politics, that's a big part of the problem.

[@unbrnwsh]

All we have to do is to get our priorities right and get the Federal Reserve to give the $80 billion in new money they are creating each month to eliminate poverty than giving it to the .01% and continue to increase income inequality that is unprecedented in history. If the FED gave that to the most needed they would become consumers and get rid of our ongoing recession in a few months and create enough employment. Also that would help reduce the income gap that makes the .01% even more arrogant (by thinking they make money because they are smart not because the FED giving it to them) and use those through the corporate media to brainwash naive innocent and gullible people to ridicule the most vulnerable in society so as to clear the guilty conscience of the .01%.

[@randymain298]

Aged well...HAHAHA

[@stephen2849]

I think these two are too similar in their viewpoints. While I am inclined to agree with them, I think it would have been more useful to have had a conversation between one of these two and a libertarian

[@markteague8889]

There certainly were an awful lot of replies of, "That's exactly right," to Krugman's theories and statements.

[@widehotep9257]

Krugman doesn't know how money is created or how banks work. Not exactly a knowledgeable expert on economic issues.

[@funkymonk5344]

Surely you know more clown