In a recent post on the B-P blog, Richard Posner addresses soaring inequality. In the U.S., “since 1980 the percentage of total personal income going to the top 1 percent of earners has risen from 8 percent to 16 percent.” He concedes a few bad effects from this situation, but ultimately concludes that, aside from upping the estate tax, nothing should be done. My favorite part of the post involves Posner’s speculation that “[m]assive philanthropy directed abroad can interfere with a coherent foreign policy;” fortunately, the administration is already on the case.
It’s astonishing how assiduously Posner ignores the work of Robert H. Frank. In 20 years of rigorous articles and books, Frank has documented over and over the ways that growing inequality harms society. Some of us in the legal profession have applied his theories; Cass Sunstein on cost-benefit analysis, Richard McAdams in Relative Preferences, and my own work on luxury health care and the rise of low-volume, high-margin business models in IP.
But in this post, and even in longer treatments of the subject, Posner ignores the leading American theorist on the consequences of economic inequality. Frank takes his libertarian critics seriously, but somehow falls under the Posner’s radar. (Even in articles published in Westlaw, where a search for [au(posner) and (“robert frank” or “robert h. frank”)] got no hits evidencing engagement with Frank’s work on inequality.)
In what follows, I try to “fisk” Posner’s account of the effects of inequality.