Tuesday, March 13, 2012

MIT Inequality Talk

As part of the technology and culture forum at MIT, I attended a talk featuring the notable economists Frank Levy (Professor of Urban Economics at MIT), David Autor (Associate Chair of the MIT economics department), Peter Diamond (MIT Institute Professor Emeritus), and Arjun Jayadev (Assistant Professor Economics at UMass-Boston). I've read quite a bit of their work, and they have all conducted important research on inequality, poverty, and policy; for instance, Frank Levy's The New Dollars and Dreams: American Incomes and Economic Change is still (over a decade later since the last edition was published) one of the best overviews of trends in economic conditions in the United States since World War II. The panelists focused on the causes and consequences of income and wage inequality, as well as possible solutions, with moderation by David Autor.

I appreciated all of their summaries, especially Arjun's since he highlighted an often-ignored cause of the concentration of income and wealth: increasing economic returns from capital versus labor. However, none of the panelists mentioned that the discipline of economics is itself to blame at least in part for the growth of economic inequality, by exporting disproved neoclassical models of the economy into the public realm. Accordingly, I asked the panelists to what extent the cultural environment of economics (with a unique set of disciplinary values, beliefs, and norms based in utilitarianism) has contributed to the rise of economic inequality in the United States and elsewhere. In general they responded in the affirmative, although with a number of qualifications.

P.S. An overview of the talk can be found here.