What Is A Great Gatsby Curve And Why Do I Care?

A blog about business and economics.
Jan. 18 2012 8:24 AM

What Is A Great Gatsby Curve And Why Do I Care?

Council on Economic Advisors Chairman Alan Krueger sparked a lot of debate with a recent speech (PDF) on inequality at the Center for American Progress where he made reference to, among other things, a chart he called "The Great Gatsby Curve" illustrating that countries with more unequal distributions of income have less social mobility. That gave rise to a critique from Scott Winship, a reply to Winship from Miles Corak, and an effort by Tyler Cowen to dismiss the whole thing as meaningless.

I think the discussion is getting a bit turned around and confused.


For starters, I don't understand what any of this has to do with The Great Gatsby, an excellent book that as far as I can tell has nothing to do with the impact of ex ante income inequality on future social mobility. If anything Gatsby seems to be a critique of America's tendency toward knee-jerk valorization of upward mobility and grasping ambition. Which is perhaps a theme Krueger should have stook with. At the same time, Krueger's antagonists should remember the proper context for this debate. Income inequality has increased a lot in the United States over the past thirty years, and American politics is increasingly organized around one coalition that wants to respond to that with higher tax rates on high income earners and another coalition which wants to oppose those efforts. Everything we're talking about here are rhetorical and analytic moves in that game. And the reason mobility is relevant is that one move Team Don't Soak The Rich has made is to argue that income inequality doesn't matter because the United States is a uniquely wonderful classless society with massive social mobility. That means the onus is on Team Don't Soak to demonstrate that this is true and relevant or else to withdraw the claim. Krueger, like many others on Team Soak, is making an effort to show that it's not true. Attacks on Krueger that end up attacking the conceptual underpinnings of measuring or caring about social mobility undermine Team Don't Soak's side of the argument. 

It's important to get that straight. It's Paul Ryan and Mitt Romney who brought social mobility and equal opportunity up as an alleged alternative to welfare-enhancing redistribution of income. I agree with Cowen—and for that matter F. Scott Fitzgerald—that this is a somewhat confused idea that doesn't withstand much practical scrutiny. But that puts us back where we started with the fact that the American economy has grown a lot over the past thirty years but a huge share of that growth has gone to a very small slice of the population and that this is not compensated for in any meaninful way by the existence of boundless upward opportunities.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Crying Rape

False rape accusations exist, and they are a serious problem.

Scotland Learns That Breaking Up a Country Is Hard to Do

There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

How Will You Carry Around Your Huge New iPhone? Apple Pants!


Theo’s Joint and Vanessa’s Whiskey

No sitcom did the “Very Special Episode” as well as The Cosby Show.


The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Cliff Huxtable Explains the World: Five Lessons From TV’s Greatest Dad

Why Television Needs a New Cosby Show Right Now

  News & Politics
The World
Sept. 19 2014 11:36 AM Breaking Up Countries Is Still Hard to Do
Sept. 19 2014 12:09 PM How Accelerators Have Changed Startup Funding
The Vault
Sept. 19 2014 12:08 PM The CIA Used to Have a Commute-by-Canoe Club. One Member’s Memories.
  Double X
The XX Factor
Sept. 19 2014 11:33 AM Planned Parenthood Is About to Make It a Lot Easier to Get Birth Control
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
Brow Beat
Sept. 19 2014 12:10 PM Watch the Trailer for Big Eyes, a Tim Burton Movie About People With Normal-Sized Eyes
Future Tense
Sept. 19 2014 11:40 AM Apple Invented the Perfect Way to Handle Your Giant New Phone
  Health & Science
Medical Examiner
Sept. 19 2014 12:13 PM The Most Terrifying Thing About Ebola  The disease threatens humanity by preying on humanity.
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.