Have just read Jerry Muller’s article in this month’s Foreign Affairs, Capitalism and Inequality, What the Right and the Left Get Wrong.  His conclusion? Capitalism results in inequality and along with it, insecurity, and there may be little within our power to change this situation, although Muller does mention three possible remedies, the first two being favored by Democrats and the third by Republicans.

1. One potential cure is simply to redistribute income from the top of the economy to the bottom. This has two drawbacks, however. The first is that over time, the very forces that lead to greater inequality reassert themselves, requiring still more, or more aggressive, redistribution. The second is that at some point, redistribution produces substantial resentment and impedes the drivers of economic growth.

2. A second cure might be to use government policy to close the gaps between individuals and groups by offering preferential treatment to under performers. This, the author says, may be worse than the disease for whatever their purported benefits, mandated rewards to certain categories of citizens inevitably create a sense of injustice among the rest of the population , not to mention the loss, of course, of economic efficiency, given that less-qualified individuals are promoted to positions they would not attain on the basis of merit alone.

3. A third possible cure, that of the government actively promoting and encouraging economic innovation might be more promising in that everyone would benefit. For example, the present combination of the Internet and computational revolutions that we are all experiencing might prove comparable to the earlier coming of electricity. And just as electricity facilitated an almost unimaginable range of other activities so the digital revolution could transform society at large in similarly unpredictable and often highly beneficial ways.

Muller points out that recent political debate in the United States and other advanced capitalist democracies has been dominated by the two issues: the rise of economic inequality and the scale of government intervention to address it. …and that the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism. Each side minimizes the concerns of the other, and each seems to believe that its desired policies are sufficient to ensure prosperity and social stability. Both, he says, are wrong.

As is often the case the Comments following this article contain some of the best writing, some of the most interesting ideas. I take from the hundreds of comments, just this one, by Shah Jamali:

Nobody is claiming that capitalism is free of flaws and imperfections. It is a historical fact that best societal changes have been evolutionary not revolutionary in nature. Almost all revolutions failed in some shape or form … i.e., French revolution produced Napoleonic dictatorship and communist revolution in its haste for pushing social reforms resulted in atrocities committed by autocratic regimes of Lenin, Stalin and others. American rise was not really a revolution, and after the inevitable expulsion of British colonialists, the society went through a deliberately envisioned evolution.
What we learn from history is that social reforms cannot be hastily pushed through executive powers. If dictators failed to impose their will on the dominated and terrorized nations, who were without choices and options, it is logically inconceivable that democratic governments could impose unwanted reforms unto free people who have choices and options. Therefore, reforms need to percolate beneath the nations until the time is right for surfacing and eventual incremental evolution.