Chait dismisses the idea of Republican populism:
[Y]ou could eliminate every business subsidy in Washington, and you’d still have in place a massive income gulf and a wealthy elite able to pass its advantages on to the next generation (through proximity to jobs, social connections, acculturation, spending money on education) that have nothing to do with government. The egalitarian laissez-faire economy is a fantasy.
Wilkinson pushes back:
I agree that egalitarian laissez-faire is a fantasy, but I deny that rooting out all corporate welfare would do so little and that progressive transfers would do so much.
Mr Chait has set up a false alternative. To say that the “main driver of inequality today is the marketplace” is a fairly empty observation. The marketplace is a complex system of institutions itself created by legal rules, and these rules are mostly established by government. The law constitutes and codifies the corporate form. The law defines the scope of property rights, including intellectual property rights. These political artefacts specify the contours of the marketplace and have vast, systemic distributive consequences. These facts are usually trotted out to correct free-market enthusiasts in the grip of the fallacious idea that “the market” somehow exists outside politics, and that the pattern of income and wealth emerging from the operation of market exchange is therefore “natural” and not already thoroughly political. I’m sure Mr Chait has made these points himself, so it should be be easy for him to see that to say that the marketplace drives inequality is just to say that government does, because the marketplace is a creature of politics.
The Dish 