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America’s Inequality Trap, Nathan J. Kelly

Reviewed by Matthew J. Lacombe

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In a democratic system, it is reasonable to expect that government will address economic inequality by enacting redistributive policies. Average citizens, the theory goes, will use their political voice to collectively push back on an increasing concentration of economic resources in the hands of an elite few. Policymakers, sensitive to these organized efforts, will respond by taking actions that rebalance society’s economic scales. But this pluralist vision of politics has not been realized in the United States, which for the past half-century has witnessed a steady increase in economic inequality—the income share of the top 0.01 percent of earners is now higher than at any point in the past hundred years—without a corresponding policy response. If anything, economic policy has become even more inegalitarian in recent decades.

In Americas Inequality Trap, Nathan J. Kelly provides a convincing—if troubling—explanation to this puzzle. He argues, in short, that economic inequality shapes politics in ways that beget further economic inequality; economic conditions favoring the wealthy, in other words, produce political conditions that make addressing inequality more challenging. Kelly identifies several distinct pathways through which economic and political inequality feed back into each other. In so doing, he deftly applies theories and concepts from the study of both mass political behavior and historical-institutionalism.

Focusing first on mass behavior, Kelly explains that inequality produces neither a surge in public support for redistribution nor an electoral disadvantage for Republican candidates (despite their party’s relative support for inegalitarian policies). Here, Kelly sheds fascinating light on the ongoing debate about the relative impact of racism versus economic precarity on Donald Trump’s 2016 triumph; he shows that racially biased Americans actually become less supportive of redistribution and more supportive of Republicans in response to rising inequality. Inequality and racism, in other words, tend to work in tandem—a pattern that politicians like Trump have been able to exploit by stoking racial tensions. Kelly’s findings provide a nice quantitative complement to Katherine J. Cramer’s ethnographic tour de force, The Politics of Resentment, which likewise provides insights into why voters do not always respond to economic inequality in ways that social scientists might expect.

Turning next to the role of political institutions and the policymaking process, Kelly, through a detailed case study of financial deregulation, shows how increasing inequality can shift the incentives of politicians in ways that encourage the enactment of policies that further enhance inequality. His discussion here is impressively nuanced and touches on an array of interrelated conditions that lead to what he describes as partisan convergence; in short, inequality—and other sociopolitical developments tied up with it, like the decline of unions—has pushed Democratic policymakers closer to Republicans on issues that are important to wealthy donors, such as regulation of the financial sector, which has then subsequently stimulated more inequality. Finally, Kelly demonstrates that once inequality is high, the status quo bias inherent in the United States’ legislative institutions—a bias that has been intensified by rising polarization—makes it difficult to address inequality. And the longer inequality goes unaddressed, the more the social and political advantages it provides the rich grow.

Americas Inequality Trap makes an important contribution to our understanding of the causes and consequences of inequality in the contemporary United States. Clearly written, methodologically sophisticated and diverse, and full of useful tables and figures, this book—especially given its thoughtful engagement with ideas from distinct corners of political science—is recommended for all readers interested in American political economy, broadly conceived.

 

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