Paul Krugman Confronting Inequality Summary

In Confronting Inequality, Paul Krugman asserts that the American Dream is one of equality and a lack of clear class distinctions. He argues firstly that economic inequality leads to social inequality, which he then pronounces to be a major challenge for the American Dream. However, though I agree that the classic version of the American Dream involves the chance for an individual to harness the possibility of social mobility so as to become economically better off than his or her parents, I believe that it has changed a great deal. Currently, most Americans not only desire to do better than their parents, but they also hope to become rich beyond their wildest dreams. This is the sort of goal that can, by definition, only be achieved through inequality. Therefore, inequality is a necessary component of the new American Dream.

It is clear to most people that economic inequality not only exists but has run rampant in America.

One only has to observe the vast differences in lifestyle between the very rich, the middle class, and the very poor to see that this is true. Such differences have always existed, however they have recently grown tremendously. “The lion’s share of economic growth in America over the past thirty years has gone to a small, wealthy minority,” so much so that this minority has left the growth of the average individual behind in the dust (Krugman 561). Meanwhile, the economic improvement of ordinary people has grown at a much slower rate and, in some cases, has even stagnated. For many, “the lack of clear economic progress for lower- and middle-income families” is exceedingly concerning (Krugman 561). Income inequality seems to threaten their dearly beloved American ideals regarding the middle class and social relations. They view the growth of economic inequality as evidence that “America has moved deeper into a new Gilded Age” of income inequality and clear class divisions (Krugman

562).
However, economic inequality has not and cannot lead to the extreme forms of social inequality feared by Krugman and many others. There is no product or experience that is sold exclusively to the wealthy. Nowhere can poorer individuals be denied access simply due to their class standing. In the American economy, “If you can pay, you can play” is the gold standard, regardless of whether one is paying with his lifesavings or with mere pocket change. This is not a threat to the middle class or to social relations. I would actually argue that this equality of experiences serves to bring Americans together. Should a rich and powerful CEO meet his middle-class secretary in a bar, or a grocery store, or anywhere else really, I should think that such an encounter would have the effect of equalizing the two in their minds. Such encounters can transform members of different classes into human beings in the minds of members of any given class.
That being said, those who are wary of economic inequality are, in part, right to worry. Inevitably, economic inequality must lead to some forms of social inequality. After all, it does not much matter that “the great majority of Americans can’t afford to stay in the eleven-thousand-dollar-a-night hotel suites popping up in luxury hotels around the world. It matters a great deal that millions of middle-class families buy houses they can’t really afford, taking on more mortgage debt than they can safely handle, because they’re desperate to send their children to a good school” (Krugman 563-64). For many, education is the key to social mobility. And education is expensive. The best forms of education are often found in pricey private schools located in wealthy areas across the country. These are generally only an option for the rich and upper middle class. The rest must settle for public schooling. However, even public schools are not uniform in quality. The best public schools are still found in the wealthiest areas. Such places are very expensive to live in. Thus, quality education is still only available to the wealthier segments of society, and those members of the middle class who sacrifice almost everything to live in such areas. This is the cause of the majority of middle class debt: “they’re trying to give their children a chance in an increasingly unequal society” (Krugman 565).
Thus, difficulty in accessing quality education is a major challenge to social mobility in America today. Yet, most Americans still believe that “individuals can make their own place in society” (Krugman 565). However, there is ample evidence to the contrary. It is still monumentally harder for a child born to a lower class family to succeed than it is for a child of an upper class family. Even lower class children with far more intellectual talent and ability than some of their upper class counterparts are far less likely to finish college, which is often crucial to moving up the social ladder. What this means is that “equality of opportunity is clearly a fantasy” (Krugman 566).
So why do Americans still believe in the American Dream? I think that this is because the American Dream has changed. Previous generations wanted only the ability to move up on the social ladder, whereas the current generation wants to be rich. Ask any child, rich or poor, what he or she wants to be in life and you will most likely be given a list of professions associated with ridiculously high incomes and great prestige. Examples include singers, movie stars, astronauts, doctors; anything that usually receives a high salary. As adults, these children begin to realize that, in the real world, not everyone can be rich beyond their wildest dreams. But still they hold on to hopes of accumulating wealth. These dreams are manifested in visions of advancing in their professional career, inventing something earth-shatteringly successful, or, if all else fails, winning the lottery. These days, no one wants to just get by. However, despite the failure of the vast majority of Americans to “get rich quick,” not many of these people seem to begrudge the triumph of those who succeeded. No one ever seems to call out Beyoncé and Taylor Swift, or even Bill Gates and Mark Zuckerberg for possessing millions or billions of dollars in assets when there are common people struggling to get by. In fact, those who “made it” are heralded as role models for everyone, rich, middle class, and poor citizens alike. Of course we make an effort to choose genuinely good people to place high on pedestals, but the prerequisite to being chosen is to be very wealthy. To get rich has become the primary dream for most Americans.
However, the wealthy cannot exist without the presence of the poor. If everyone were wealthy, then in actuality no one would be wealthy. This image would look too much like socialism or communism for our capitalist nation to embrace. While, from an ethical standpoint, most Americans would agree that economic equality for all is a wonderful aspiration, it simply does not fit with the wants and desires of the average American. We want to be wealthy, richer than everyone else, and we are willing to sacrifice the wellbeing of the lowest members of society in order to achieve this goal. While this is considered to be “a shame,” it is also considered to be a necessary evil: for all things, a price must be paid. Even those people who benefit the least from the existence of the wealthy seem to accept this as truth, as they don’t express much anger about this system, except in the form of political parties. However, I think that those members of political parties that constantly berate the top one percent and champion the redistribution of wealth do this so as to give themselves a better chance. A redistribution of wealth would put the poorer individuals in a far better position to succeed and prosper in society, however, they don’t want to completely eliminate the wealthy classes. This is because they dream of joining the ranks of the richest members of society and, if they destroy those ranks now, there will be nothing left for them to aspire to.
Of course many people don’t admit such things. There are those that adamantly maintain that inequality is extremely damaging to American society, particularly because “it corrupts our politics” (Krugman 567). There is always significant public outrage whenever some scandal or another regarding the power of money over politics is exposed. Why? Because it’s not fair. As Americans we place great value upon the rules of society that dictate whether or not we succeed in life. It is only natural that we should respond with indignation when we perceive that someone is trying to make this goal harder for us to achieve. The problem is not that such people have money, but that they are attempting to use it to unlawfully inhibit others from having as much as they do. So long as the game is fair, most Americans are willing and even like to play. As for those who are not or who are truly champions of equality for all, my suggestion would be moving to some place in Europe, specifically somewhere in Scandinavia, as “mobility is highest in the Scandinavian countries” (Krugman 567).
It may be possible to transform the United States into a nation of equality, but the fact is that Americans don’t want it nearly enough to incite change; some don’t even want it at all. This is because to eradicate inequality in America is to kill their dreams of wealth. Although it sounds quite ugly, most American want only to be rich and famous. This is the new American Dream. But for the wealthy to be wealthy, there must remain a population of poorer citizens in any given society. Therefore, inequality is necessary to this new American Dream.