Thread by @robertmanduca

Did you know: until recently, there used to be broad consensus that inequality is harmful for economic growth? See my piece today in the @BostonReview bostonreview.net/class-inequali…

@BostonReview The modern notion that there’s a tradeoff between income equality and economic growth feels so ingrained today, but it’s a relatively recent idea popularized only in the 1970s.

@BostonReview In the 40s and 50s it was widely accepted—by economists, businesses, unions, Republicans, Democrats—that sustained economic growth *depended on* an egalitarian income distribution. Too much inequality would lead to unemployment and recession.

@BostonReview This straightforward logic comes directly from Keynes: for an economy to continue producing things, there must be a market for them. If nobody has the money to buy new products, companies will stop making them, and lay off workers.

@BostonReview OTOH, if demand is strong, companies have reason to invest in more and better production. The result is strong economic growth.

@BostonReview This consensus used to permeate the popular conversation. You saw publications like @FortuneMagazine magazine producing “Opportunities Unlimited,” a cartoon heaping praise for the midcentury boom on the Middle Income Consumer archive.org/details/opport…

@BostonReview @FortuneMagazine From @FortuneMagazine “Altogether the zoom in the American market after the war, the unprecedented volume of goods of all kinds, gobbled up by an insatiable tide of buyers, was largely the work of this middle-income man.” #haulvideo #haul #shoppinghaul #fortunehaul

@BostonReview @FortuneMagazine @brides Magazine told its readers that when they upgrade their appliances, “you are helping to build greater security for the industries of this country” (quote is from Lizabeth Cohen’s fascinating history A Consumer’s Republic hbswk.hbs.edu/archive/a-cons…)

@BostonReview @FortuneMagazine @brides Notice how they are framing ordinary consumers as the drivers of economic growth & prosperity, whereas we today we say that investors and entrepreneurs are the "job creators."

@BostonReview @FortuneMagazine @brides These efforts at mass communication were effective—for a few decades the country was united around a program of growth Keynesianism. Not coincidentally, those decades saw the fastest and most equitable economic growth in history.

nytimes.com/interactive/20… @DLeonhardt

@BostonReview @FortuneMagazine @brides @DLeonhardt No one encapsulated the 1950s sensibility better than WWII price czar Chester Bowles in @TmwWithoutFear: “In order to prosper, each group among us which produces goods and services must have not only a product which people want, but also customers who can afford to buy it.”

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear Remember, the Great Depression had come after a decade of skyrocketing productivity and profits but stagnating wages. Since the wealthy spend only a tiny fraction of their incomes, demand couldn't keep up with supply. Debt and speculation could only keep things going for so long.

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear If that sounds familiar today, it should!

cc @EconomicPolicy epi.org/productivity-p…

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear @EconomicPolicy The lesson for today: we can break out of our current era of plutocrats and economic stagnation, but it will require updating our economic theories AND how we talk about the economy. Our grandparents were able to do this.

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear @EconomicPolicy Read the whole thing at tmwwithoutfear.org. We’ll be posting more 🔥🔥🔥 excerpts at @TmwWithoutFear.

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear @EconomicPolicy cc @jeffspross @interfluidity @Too_Much_Online @equitablegrowth @rooseveltinst. Many thanks @Econ_Marshall for helping get this message out and @ryanlcooper for having me on @LeftAnchor leftanchor.podbean.com/e/episode-78-p…

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear @EconomicPolicy @jeffspross @interfluidity @Too_Much_Online @equitablegrowth @rooseveltinst @Econ_Marshall @ryanlcooper @LeftAnchor A coda to all of this: Chester Bowles's son is the economist Sam Bowles, who is been a key contributor to @coreeconteam, a project to update economics education for today's world. How does it start? Chapter 1.1: Income Inequality core-econ.org/the-economy/bo…

@BostonReview @FortuneMagazine @brides @DLeonhardt @TmwWithoutFear @EconomicPolicy @jeffspross @interfluidity @Too_Much_Online @equitablegrowth @rooseveltinst @Econ_Marshall @ryanlcooper @LeftAnchor @coreeconteam Sam and @jcohen570 did a great interview last summer about the parallels between CORE and Tomorrow Without Fear, and the necessity of making economics accessible to people outside the econ profession bostonreview.net/class-inequali…