Angus Deaton, the Princeton economist, has won the Nobel in economic science – which is wonderful – for his dogged, careful empirical work at the microeconomic level, tracking and making sense of individual households, their choices and why they matter.
Cue the usual complaints that this isn’t a “real” Nobel. Hey, this is just a prize given out by a bunch of Swedes, as opposed to the other prizes, which are given out by a bunch of Swedes.
Anyway, Mr. Deaton is also a fine writer with important things to say about the political economy. On his personal blog, Cardiff Garcia from The Financial Times excerpted a passage from Mr. Deaton’s book, “The Great Escape,” in which Mr. Deaton explains why we should care about the concentration of wealth at the top:
“[T]here is a danger that the rapid growth of top incomes can become self-reinforcing through the political access that money can bring. Rules are set not in the public interest but in the interest of the rich, who use those rules to become yet richer and more influential. … To worry about these consequences of extreme inequality has nothing to do with being envious of the rich and everything to do with the fear that rapidly growing top incomes are a threat to the well-being of everyone else.”
As if to illustrate Mr. Deaton’s point, a remarkable piece of recent reporting in The New York Times by Nicholas Confessore, Sarah Cohen and Karen Yourish documents the incredible fact that campaign finance this election cycle is dominated by a tiny number of extremely wealthy people in the United States: More than half the total funding is coming from just 158 families. And this money is overwhelmingly flowing to Republican candidates.
Some analysts have suggested that this is happening because there is more action on the Republican side, with the presidential nominating contest still wide open. But I’m pretty sure that’s nowhere close to the whole story. The biggest piece of the super-rich, super-donor story is money from the financial sector. And there has been a huge swing of finance capital away from Democrats toward Republicans, which began in the 2012 election cycle – that is, after the passage of financial reform.
Basically, we’re looking at the people who brought you the financial crisis trying to buy the chance to do it all over again.