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Frank Ackerman, Neva R. Goodwin, Laurie Dougherty, and Kevin Gallagher, eds.: The Political Economy of Inequality. Washington, DC: Island Press, 2000.
The editors of the series "Frontier Issues in Economic Thought" have produced a fifth volume, The Political Economy of Inequality. Each volume in the series examines a "frontier" area that will widen the focus of neoclassical economics to include "social institutional, cultural and political" issues. The new volume is an anthology of two or three page summaries of articles and book excerpts organized in ten chapters, each with an introduction by one of the editors. The editorial team reviewed thousands of books and articles, narrowing them down to a selection of 66. Their aim was to search outside the boundaries of neoclassical economics for theory and empirical research on the issue of inequality. Articles from major journals were excluded, with a focus instead on material the editors considered harder to find. The volume is an accessible digest of material on inequality featuring the work of some of the major researchers at the intersection of politics and economics.
The book addresses a wide range of topics surrounding inequality, focusing on issues from inequity in the household to the inequality of nations. One major theme underlying the volume is the striking increase in income inequality in the US and other countries in the past 25 years. Part I analyzes the shift away from the period of 25-30 years following World War II, an era characterized by a trend toward both real growth and increasing income equality. But by 1974, in what Bennett Harrison and Barry Bluestone call "The Great U-Turn," the trend reversed itself and income inequity rose dramatically. Harrison and Bluestone attribute the change to a conscious shift in corporate strategy that dramatically impacted labor relations. Corporations developed the strategy in response to a decline in profits that began to emerge during the mid-1960s. As David M. Gordon elaborates, the reaction of employers to a squeeze in profits was to take the "low road" toward employees, a short-term approach to cutting costs, especially labor costs, rather than taking the "high road" which would have brought on increased productivity through investment in employee training and technology. Corporations cut wages, laid off workers, and increasingly used part-time...