Comment by u3sandifer

The solutions are easy....nothing new under the sun...start here:

https://deanbaker.net/images/stories/documents/Rigged.pdf

Chapter 9 Rewriting the Narrative on Economic Policy

The standard framing of economic debates divides the world into two schools. On the one hand, conservatives want to leave things to the market and have a minimal role for government. Liberals see a large role for government in alleviating poverty, reducing inequality, and correcting other perceived ill-effects of market outcomes. This book argues that this framing is fundamentally wrong. The point is that we don’t have “market outcomes” that we can decide whether to interfere with or not. Government policy shapes market outcomes. It determines aggregate levels of output and employment, which in turn affect the bargaining power of different groups of workers. Government policy structures financial markets, and the policy giving the industry special protections allows for some individuals to get enormously rich. Government policy determines the extent to which individuals can claim ownership of technology and how much they can profit from it. Government policy sets up corporate governance structures that let top management enrich itself at the expense of shareholders. And government policy determines whether highly paid professionals enjoy special protection from foreign and domestic competition.

Pretending that the distribution of income and wealth that results from a long set of policy decisions is somehow the natural workings of the market is not a serious position. It might be politically convenient for conservatives who want to lock inequality in place. It is a more politically compelling position to argue that we should not interfere with market outcomes than to argue for a system that is deliberately structured to make some people very rich while leaving others in poverty. Pretending that distributional outcomes are just the workings of the market is convenient for any beneficiaries of this inequality, even those who consider themselves liberal. They can feel entitled to their prosperity by virtue of being winners in the market, yet sufficiently benevolent to share some of their wealth with the less fortunate. For this reason, they may also find it useful to pretend that we have a set of market outcomes not determined by policy decisions.

But we should not structure our understanding of the economy around political convenience. There is no way of escaping the fact that levels of output and employment are determined by policy, that the length and strength of patent and copyright monopolies are determined by policy, and that the rules of corporate governance are determined by policy. The people who would treat these and other policy decisions determining the distribution of income as somehow given are not being honest. We can debate the merits of a policy, but there is no policy-free option out there.

This may be discomforting to people who want to believe that we have a set of market outcomes that we can fall back upon, but this is the real world. If we want to be serious, we have to get used to it.