MANY AMERICANS are demanding more and more of government and seem to be receiving less and less. For others, "getting the government off our backs" seems to have become the dominant public philosophy of the day. At such a time, reasoned debate about Washington's role in shaping the distribution of income is desperately needed. In this book, Benjamin Page, a University of Chicago political scientist, moves that essential discussion forward.
For those who view controversy over inequality as apocalyptic Armageddon, Page's analysis will seem a chilly breeze rather than a tongue of fire. There are no startling findings here, no clamorous call to arms. His arguments for greater equality are neither novel nor conclusive, his agenda for reform familiar, perhaps even pallid. Nevertheless, Page makes an extremely valuable contribution. He conducts the reader on a journey through the American welfare state, summarizing what is known (rather than what is merely hoped or asserted) about the impacts of each major program upon the distribution of income among different economic classes. This ambitious task compelled Page to wade through innumerable academic studies in diverse and technical fields. From this mind- numbing miasma of arcane methodologies, statistical reports, and arrant speculation, he has somehow managed to extract useful and important insights, synthesizing them in ways that respect the subject's great complexity and uncertainty while being accessible to any serious reader.
This tour d'horizon, however, is not always a tour de force. As the author marches down the pages of the U.S. Code in search of governmental influence on the income distribution, he proceeds from the relative terra firma of cash transfer programs, near-cash transfers, large in- kind programs, and tax policies into the analytical quicksand of public goods (e.g., defense, foreign policy, the space program, and environmental protection), regulatory programs and even the Constitution itself. He sometimes thinks to rescue himself by grasping at simplicities that crumble at the touch. Thus, "if American workers would, in fact, be better off under socialism, it is possible that their tax dollars spent on defense against international socialism do them harm rather than good. If so, military spending is fundamentally pro- rich." Some points are not only unhelpful but simply wrong: "The thrust of U.S. foreign policy since World War II, in fact, has been . . . to prevent leftist governments from coming to power anywhere in the world . . . even (by) peaceful means." "Anywhere"? What about Mitterrand in France, Palme in Sweden, Gonzalez in Spain? He views mass transit as "clearly pro-poor," interstate highways as pro-rich. But the reality is far more complicated; the Washington subway, for example, has added some $2 billion to land values near Metro stations (relatively few in poor neighborhoods) while burdening taxpayers in Kansas and Watts; the highway system has had numerous ripple effects that help poor and working- class individuals, including access to better housing and suburban jobs. It is not, as Page maintains, "a simple matter of selfishness that few Americans are willing to lower their living standard in order to help the needy of the world." Selfishness, to be sure, but also legitimate concerns about which poor people have the strongest moral claims on us and how those claims can most effectively be addressed.
For the most part, however, Page scrupulously emphasizes how little we understand about the distributional effects of government programs. Limited data, complex causal patterns, definitional problems, unrealistic assumptions, unmeasurable costs and benefits, and indirect incentive effects mar the best analyses of even the most straightforward transfer programs. Indeed, his exhaustive review of the evidence convinces him that "problems of data and theory and method . . . make it essentially impossible to be sure how government affects the income distribution or even to specify precisely what we mean by 'affects.' " Still, he insists that government has left that distribution very unequal and that it could reduce inequality without destroying economic efficiency and incentives.
I am inclined to agree, but both these propositions leave important questions unanswered. How unequal would the income distribution be if age were held constant, thereby controlling for the fact that the earnings of children and relatively new workers are naturally lower than for more experienced workers in their peak earning years? Even if the share of the lowest stratum has changed little since World War II, an altered age composition may imply greater long-term income mobility. As for the tradeoff between equity and efficiency, we need to know much more about its precise terms than Page (or perhaps anyone else) can tell us.
Why has activist government altered the distribution of income so little since 1940? Page maintains that our interest-group politics "transmits economic inequality and perpetuates economic inequality." This system, he argues, is legitimated and sustained for some in order to produce a high standard of living for almost all. This political-economic structure leads to what Charles Lindblom calls "the market as prison." Page also sites polling evidence indicating that most Americans favor the existing, only mildly progressive tax system: "without question, ordinary working people tend to oppose equalizing incomes even if they would benefit from it." Although he suggests, without much conviction or precision, that public opinion on these questions may be "manipulated,""it is not obvious what remedy liberal government can provide for a demos that cannot perceive its own best interest.
In such a world, even the author's moderate prescriptions for the future --improved public information, elimination of regressive regulations and subsidies, universalization of social welfare benefits, direct cash transfers instead of services, political mobilization of the poor --seem visionary. And the greatest and most intractable sources of unequality may lie in precisely those realms, such as family life and genetic endowment, that only a government of the most exquisite intelligence and delicacy, one quite alien to our politics, would presume to enter. Perfect equality will always elude imperfect men and women. But surely it is not utopian to suggest that we can do a good deal better than we have done up until now.