Those who defend concentrated wealth

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The New York Times this week has a fascinating profile on Edward Conard, an extremely wealthy man who used to run a private-equity firm you’ve probably heard of. It’s called Bain Capital. He’s now one of Mitt Romney’s most generous campaign donors.

There’s quite a bit in the piece, but the part that’s hard to get over comes in the last paragraph: “At base, having a small elite with vast wealth is good for the poor and middle class. ‘From my perspective,’ [Conard] wrote, ‘it’s not a close call.’”

The quote made for some worthwhile conversation between Rachel and Paul Krugman last night.

Krugman, by the way, added some additional thoughts on his site, explaining that Conard’s candor actually represents a departure from the usual line from the right.

Until now, the official line has been that what we need are incentives – that jaawwb creeaytohrs won’t do their thing unless we dangle the carrot of immense wealth in front of them. But now we’re supposed to think that it’s not the prospect of future wealth, but wealth in being, that’s what is really so wonderful.

There are many things you could say about this, but surely high on the list is the degree of historical ignorance it requires. I mean, this argument might have some surface plausibility if the era when America didn’t have such an overweening plutocracy – the 50s and 60s, when the top 0.01% received only about a fifth the share of income that it commands today – were a time of economic stagnation and low innovation. In fact, the postwar generation experienced the best economic growth – and the fastest productivity growth – of any era in the past century.

But this is how it’s going. If the right continues to make political gains, coming next is a reaffirmation of the hereditary principle.

Well, with due respect to Krugman, I’m not sure if the hereditary principle is “coming next” or if it’s already here.

Paul Krugman

Those who defend concentrated wealth

Updated