Inequality: An Entangled Political Economy Perspective

268 Pages·2018·2.525 MB·English

by  Mikayla Novak

MIKAYLA NOVAK
I N E Q U A L I T Y
AN ENTANGLED POLITICAL ECONOMY PERSPECTIVE
Palgrave Studies in Classical Liberalism
Palgrave Studies in Classical Liberalism
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Mikayla Novak
Inequality
An Entangled Political Economy
Perspective
Mikayla Novak
RMIT University
Melbourne, VIC, Australia
Palgrave Studies in Classical Liberalism
ISBN 978-3-319-89416-4 ISBN 978-3-319-89417-1 (eBook)
https://doi.org/10.1007/978-3-319-89417-1
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Preface and Acknowledgements
This book is about inequality. There are, needless to say, as many defini-
tions of inequality, as there are assessments, as to the worthiness of this
issue as a legitimate matter for public concern. As I indicate in this book,
I largely limit attention to inequality of income and wealth. I say “largely”
in this context because some sense should be given as to how economic
inequalities (i.e. skewed income and wealth distributions) shape other
kinds of inequality—such as political inequality and social inequality—
and vice versa. These considerations highlight the inherent complexities
of a topic which are often overlooked by participants in contemporary
public debates, wherein the pressure for analytical expediency and explan-
atory simplicity seems to be the norm.
Given the breadth of interest about the nature and consequences of
inequality, this book is not only aimed at academics, policymakers, and
representatives of interest groups and “think tanks.” My hope is that this
book successfully reaches out to an even broader audience, encompassing
interested laypeople whose lives are unquestionably affected by how eco-
nomic, social, and political actors respond to the inequality issue. In
some ways this book is merely an addition to an already voluminous lit-
erature. However, in writing this book I have sought to add value, by
interpreting economic inequality through the lens of “entangled political
economy” theory developed by eminent George Mason University econ-
omist Richard Wagner.
v
vi Preface and Acknowledgements
A detailed discussion will clearly be reserved for the main text, but
what could be said at this juncture is that inequality in entangled political
economy frame is reflected less in the swings and roundabouts of aggre-
gate statistics such as the Gini coefficient. My focus is trained more upon
the “bottom up” interactions within the economic, social, and political
spheres which give rise to unequal income and wealth distributions. As
might already be imagined by the reader, this book reflects an interdisci-
plinary approach to theory and analysis, inspired by the social-scientific
disciplines of economics and political economy, political science, sociol-
ogy, law, and history. Drawing upon insights from multiple disciplines
may not lend itself to a clean, stylised vision of human affairs, yet this
unavoidably appears the best way to reflect upon life as we find it—and
not as we would like it to be.
This book is organised in three parts. The first part of the book, encom-
passing Chaps. 1, 2, and 3, outlines the conceptual basis for economic
inequality in an entangled political economy perspective. It introduces
the reader to the key dimensions of the contemporary inequality debate
raging across developed countries. We also provide an account of Wagner’s
entangled political economy framework, and explain how distributional
matters may be considered using that approach. Part two of the book,
which covers Chaps. 4, 5, and 6, presents case studies illuminating how
entanglements between economic, social, and political actors bring out
redistributive effects inconsistent with the widely held desire to reduce
income and wealth inequalities. Finally, the third part of the book (Chaps.
7, 8, and 9) outlines the principles for institutional reforms to help redress
inequality in appropriate and meaningful ways, and to provide conclud-
ing remarks.
There have been many influences upon my thinking, as refined over
the best part of 20 years. I would like to briefly acknowledge them here,
in a reflection of the idea that no person is entirely unaffected by what has
been encountered during times past. The late Tomas J. F. Riha, my men-
tor and Honours thesis supervisor during my undergraduate years at The
University of Queensland (Australia), introduced me to the works of
James M. Buchanan and the twentieth-century German ordo-liberal
school of law and economics. I can never thank him enough for those
Preface and Acknowledgemen ts vii
intellectual introductions, which well and truly propelled me onto a path
of discovery and learning in the classical liberal tradition.
John Foster, Emeritus Professor at The University of Queensland,
introduced me to evolutionary economics through his Honours-level
macroeconomics class. His thought-provoking presentations of economic
theory in a heterodox light certainly made its long-lasting impression. The
work of evolutionary economist Jason Potts (RMIT University, Australia)
has also proven itself as an inspiration, with the originality and profundity
of his work representing a compelling intellectual combination.
I want to specifically acknowledge the efforts of others who have simi-
larly influenced my thinking, but may barely be aware of this fact. Peter
Boettke (George Mason University, United States) and Wolfgang Kasper
(Emeritus Professor, University of New South Wales, Australia) have
served as sources of sound economic education like no other. Richard
Wagner (George Mason University, United States), whose work predom-
inantly influences the ideas encapsulated in this book, is another exem-
plary figure of scholarly input to, and engagement with, the classical
liberal tradition I can only hope to emulate. There are obviously other
people on a personal and professional basis, too numerous to mention,
who have deeply influenced my thought patterns over the years. I take
this opportunity to thank them for doing so.
I wish to thank Palgrave Macmillan for the opportunity to publish
this, my first book, and for the superlative assistance they provided as the
manuscript took shape. I thank the editors of the Palgrave Studies in
Classical Liberalism series (David Hardwick and Leslie Marsh) for their
support and assistance to make this book a reality.
Two anonymous referees organised by Messrs Hardwick and Marsh
lent their support for the publication of this work, and I thank them for
their contributions. I would also like to thank, in alphabetical order,
Vincent Geloso (Texas Tech University, United States), Stefan Kolev
(University of Applied Sciences Zwickau, Germany), and Andrew Norton
(Grattan Institute, Australia) for their comments on a draft version of this
work. The insightful and constructive feedback by all parties is deeply
appreciated and, of course, they bear no responsibility for any errors of
omission or commission which appear in this publication.
viii Preface and Acknowledgements
Finally, I wish to thank my partner and spouse, Deanna Trainham, for
her advice, love and support, and, last but certainly not least, infinite
patience in allowing me to pursue my aspirations and dreams. This book
is dedicated to you.
Melbourne, VIC, Australia Mikayla Novak
Contents
1 Introduction 1
Part I Theoretical Foundations 27
2 Entangled Political Economy: A General Introduction 29
3 Explaining Inequality in an Entangled Political Economy 55
Part II Case Studies 83
4 Taxation and Expenditure Policies 85
5 Regulatory Policies 119
6 Social Exclusion 153
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