Monday, August 17, 2015

Lessons from Atkinson's "Inequality: What can be done?"

I already read many parts of the book by Anthony Atkinson on inequality. This is the last in a collection of fundamental contributions to this debate, which also include the books by Piketty, Milanovic, Bowles, Deaton and Bourguignon. The book by Atkinson has a first part of diagnosis, a second of concrete proposals, and a last one about the contraints to the implementation of these proposals. A very useful discussion about the book can be found in this debate between Paul Krugman and Robert Solow. I would stress three insights from the book:
-A very concrete one, close to my research interests, about the need to make competition policy also redistributive, freeing it from a sole concern on average consumer welfare. There is not much debate about this, and most industrial economists would reject the idea, but I believe that in an imperfect second best world, it is worth debating it (as many other proposals that reject or qualify the notion of an efficiency-equity trade-off).
-The radical proposals about the job market, in particular about making government the employer of last resort, with a careful program of public employment to complement the private market, in a context where the notion of employment is completely different from 50 years ago.
-Finally, there is an interesting tension in the book betwen what can be done at the national level and what should be done internationally or at least in the European Union. Although most of the proposals are national in scope, there is a positive attitude towards the contribution from the EU and other international institutions.
Atkinson is a great British economist. I would not vote for Jeremy Corbyn in the Labour Party, but those who endorse Atkinson's proposals would not like many policies of Tony Blair either, and not only because of the Irak war. Any intermediate candidate would do well to read this book.

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