Inequality and Poverty

The French economist Thomas Piketty’s recent tome, Capital in the Twenty-First Century, has captured the attention of economists, politicians, and even the general public. And while the book focuses primarily on widening economic inequality, it may well influence our discourse surrounding the related issues of poverty and opportunity as well.

The book۪s central thesis is that, generally speaking, capitalist economies tend to grow more unequal over time with the return on assets like stocks outpacing the rate of economic growth. He argues that, if left unchecked, these trends threaten economic opportunity and political equality.

For many, especially those on the left, Piketty’s argument has been informative in thinking about the challenges facing low- and middle-income Americans.

In a piece for The Nation, Jeff Faux, the principal founder of the Economic Policy Institute, argues that over the last 40 years we۪ve failed to make any real progress in combatting poverty. He says that Piketty۪s argument helps explain this failure and “makes hash” of the idea that “small-bore reforms will eventually achieve social justice on the cheap.”

In contrast, conservative reaction has been more mixed. In his New York Times column, David Brooks praises the book as “very interesting” but argues “the reaction to Pikettysays more about class rivalry within the educated classes than it does about how to really expand opportunity.” Brooks argues that we should pivot away from inequality rhetoric and focus on “lifting people from the bottom with human capital reform, not pushing down the top.”

It۪s also worth noting that while Piketty has brought a fresh and extensive new analysis, the debate surrounding these issues predates his new book. For example, last year Spotlight published an Exclusive Commentary featuring two differing views on wealth inequality in America by Reid Cramer of the New America Foundation and Stuart Butler of the Heritage Foundation.

Is inequality central to understanding poverty, or does it do more to distract and obscure the challenges facing low-income Americans? Given the popularity of Piketty۪s work, and the renewed interest in fighting poverty, it۪s clear we will be discussing these questions for the foreseeable future.
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Here at Out of the Spotlight, we offer a behind-the-scenes look at the latest news and information essential to anyone working to fight poverty. From key political appointees to clashes over policy, we cover the news that doesn’t always make the evening news. Check out Out of the Spotlight for our take on the twists and turns of the latest political developments and their impact on poverty reduction. Topics and ideas are welcome! Just contactmlaracy@aecf.org or watersboots@hotmail.com.