Most of it is echoing the thoughts of economist Thomas Piketty’s from his book, Capital in the Twenty-First Century, which I coincidentally finished listening to just days ago. I am not saying that Solow did not have these idea independent of Piketty, but it is safe to say that, at the least, he agrees with Piketty’s conclusions. He had just reviewed Capital in the Twenty-First Century for New Republic when he gave this interview.
Wikipedia’s entry for “oligarchy” states that it is “a form of power structure in which power rests with a small number of people.” Both Solow and Piketty conclude that, if income inequality is increasing, and the rich are getting richer, then they MUST also be consolidating power AND using that power to corrupt democracy in America.
I want to reserve most of my comments about Piketty’s book for my dedicated post about it, but we do have the benefit of 4 years since its publication, and 3 years since these comments by Solow. We can accept the data they reference (growing inequality due to return on capital outpacing growth in the developed world, slowly returning the wealth inequality levels to those seen before the shocks of two world wars), but we don’t necessarily have to accept their conclusions.
I am not arguing against the seemingly obvious connection between having monetary interests and wanting to use one’s available interests to protect and/or grow those interests. There is corruption in the Western Democracies. There are ways for people who have money and power to use them to try to influence the decisions of others. However, I have yet to be convinced that income or wealth inequality levels change the amount of that corruption and influence.
Do Apple and Google have more influence now than GE and IBM did 40 years ago? Do Bill Gates and the Koch brothers have more influence than Howard Hughes and Daniel Ludwig did? The current democratic system system is flawed, but as long as one vote still equals one vote, people retain their right to pool their power and influence into something far stronger than any supposed oligarchy ever could.