Reviews: May/June 2020

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The Wolf at the Door
Ian Shapiro ’83PhD, ’87JD, and Michael J. Graetz
Harvard University, Press, $29.95
Reviewed by James Ledbetter ’86

The numbers have been repeated to the point of numbness: the wealthiest 10 percent of US households now owns nearly 70 percent of the nation’s wealth and two-thirds of its assets. We read the data, we see the effects of inequality in our daily lives, and yet we usually feel powerless about effecting any kind of change.

Yale political science professor Ian Shapiro ’83PhD, ’87JD, and Michael J. Graetz, a Columbia (and former Yale) law professor, provide historical perspective on policy developments over the last half century that have exacerbated American inequality. They also emphasize the potentially dangerous political power of economic insecurity, and insist that the problem be addressed.

Solutions, though, are hard to come by. They praise those, such as the Business Roundtable, who’ve attempted to reignite a sense of social purpose in our capitalist class. They are skeptical about several approaches popular on the left, such as a universal basic income (not politically viable, they argue) and a wealth tax (vulnerable to constitutional challenge, and unlikely to raise as much revenue as its proponents project). Instead, Graetz and Shapiro focus on enhancing existing wealth-distribution devices such as the Earned Income Tax Credit. They advocate comprehensive worker retraining, expanded health-care coverage, and massive public spending to revitalize roads, bridges, and airports.

But how can any of this happen when new taxes seem politically impossible? It’s conceivable that the unprecedented peacetime government powers brought on by the COVID-19 pandemic could change the political equation to focus more on economic insecurity. Still, even pragmatists like Graetz and Shapiro despair over the perpetual failure to enact what seem like win-win solutions: “Waiting for major infrastructure improvements in the United States has become a lot like waiting for Godot.”

James Ledbetter, head of content at Sequoia Capital, is the author, most recently, of One Nation under Gold.