denisdman wrote:
It’s actually the defining feature of most economic systems. And while Europe has lower inequality, they have higher unemployment, lower growth, lower per capita income, and less innovation.
Yeah, and most economic systems have produced violent conflict or upheaval in one form or another. As Marx famously wrote almost two centuries ago, "the history of all hitherto existing society is the history of class struggles."
In any event, my original point of comparison was not between Europe and the U.S., but between two periods of U.S. history. The economic dynamism of the New Deal era certainly shows that the stark inequality that is both a key feature and the principal goal of neoliberalism can be avoided even as the corporate class maintains capitalist hegemony.
Finally, it should be noted that some of the main innovations of the neoliberal era--including the internet itself--are products of public investment, not private sector ingenuity. Moreover, much of the laboring class fueling private sector innovation acquired the skills necessary to contribute to our high-tech economy at public research institutions. Given this context, it can be reasonably argued that the Morrill Land Grant Act of 1862 stands as the greatest catalyst of innovation in the history of the United States, and one of the greatest such catalysts in the history of the world.
Every political and economic system has class struggle. And many of these systems try so hard to make everything equal- be it the social democracies of Europe or any of the communist systems, result in much lower overall economic activity. What the U.S. has accomplished in a quite messy way is create the largest economy in the world with a huge middle class and the highest per capita GDP of any major country. And for all the concern about a shrinking middle class, as I have shown many times here, the shrinkage is because so many have moved into the upper middle class category. Meaning, our economy has created a significant amount of high paying jobs.
Now there is a place for government spending on critical infrastructure. But I do not think going back to New Deal tax rates, over 90%, make much sense.
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