Roger A. McCain, Approaching Equality: What can be done about wealth inequality, Edward Elgar, 2017, v + 224 pp, 1 78643 143, hbk, £75
This book tackles some important and interconnected questions:
Can we envision a future social economy in which equality would be realized, to the greatest possible degree, and a social economy that is at the same time workable, efficient, and progressive? Would this social economy require our posterity to sacrifice other values, such as individual autonomy and liberty, or may we hope that these values too could be perfected? If we do envision such a social economy, what are the steps that could take us from our present status to the social economy we envision? (p. 1)
The early chapters understand capitalism as a class structure within which income inequality is inevitable and in which wealth inequality drives rent-seeking behaviour and thus further inequality. The results are ‘plutocratic oligarchy’ (p. 22), an inefficient market economy, stagnation, and economic instability. There are therefore economic as well as social reasons for tackling income and wealth inequality. The later chapters discuss what can be done about the situation, and McCain’s suggestion is a wealth tax that builds a Social Endowment Fund (with the wealth tax accompanied by a more onerous transaction tax to discourage the wealthy from avoiding the wealth tax, and with the fund’s increasing ownership of the means of production changing the ways in which companies are governed).
Two minor criticisms might be in order. The author employs a ‘working class’ and ‘employers’ class’ framework, into which he then inserts a mediating ‘middle class’. Today’s class structure is far more diverse than that framework suggests. Now a highly complex class structure is better defined in matrix fashion by differing levels of social capital, different levels of wealth and income, and increasing employment market precarity across broad earnings ranges. Fortunately, the book’s economic and social policy arguments are not necessarily tied to the class structure employed, so the anachronism does not compromise the book’s diagnosis and prescriptions in relation to income and wealth inequalities.
The second criticism relates to chapter 8, in which McCain recommends the allocation of resources according to ‘need’ (his discussion of which would have been enhanced by reading Hartley Dean’s work on the concept’s complexity). McCain suggests that ‘there are problems with the demand for distribution according to need’ (p. 152), and he understands the difference between individual and group needs, but then he does not recognise the different policy implications. To satisfy a population’s need for an income might suggest that the proposed Social Endowment Fund should pay a Citizen’s Basic Income, whereas to satisfy each individual’s need for an income might suggest means-tested benefits.
In framing his responses to his initial questions McCain employs economic and political theory from a broad spectrum of traditions (and particularly Marxist analysis), and he employs methods from a broad spectrum of disciplines. Other scholars’ work is treated both fairly and critically, and the more complex mathematical material is usefully located in appendices. The book’s basic argument is clear and persuasive. This is an important book that tackles an important problem, and it could usefully inform governments’ economic policies.