Today’s billionaires strive to contribute to social causes from “green” technologies to feeding the poor, in part to connect with the public and prevent a possible backlash against the growing income inequality that their success symbolizes, said author and commentator David Callahan.
“The rich care what people think,” he said. “The successful rule of the elite rests to some degree on public legitimacy. Their power rests on popular support of the free-market system,” low taxes and open trade, and that’s why they’re following the example of early 20th-century robber barons who embraced social reforms, he said.
So far, despite the growing wealth at the top, Americans by and large still support an open economy, the analysts said, but discontent is growing.
Harvard’s Mr. Frieden said public reaction against the polarization of incomes might have been blunted by a consumer buying binge since 2000, which was largely financed by debt, enabling people to live for a while like they were affluent even though their incomes were barely growing. But with today’s subprime mess and credit crunch, that debt-financed spending spree appears to be over, he said.
“Inequality is inherent - even essential - in a market economy,” he said, but growing public unhappiness with diminished incomes and purchasing power could undermine support for free markets.
Evidence of “increasing disenchantment with global economic integration” could be seen in the presidential primary battles over trade in key states such as Ohio and Pennsylvania, which may have been a harbinger, he said. “That is likely to be the issue of the next decade.”
'Your papers, please' must never be heard in America
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