A fascinating paper:
Rediscovering the 1%: Economic Expertise and
Inequality Knowledge by Daniel Hirschman [University of
Michigan]
Abstract
In the 2000s,
academics and policymakers began to discuss the growth of top incomes in the
United States, especially the “top 1%.” Newly analyzed data revealed that top
income earners in the 1990s received a larger share of income than at any point
since the Great Depression, and that their incomes had begun a dramatic upward
climb in the early 1980s. This paper investigates why it took two decades for
this increase in top incomes to become politically and academically salient. I
argue that experts assembled two “regimes of perceptibility” (Murphy 2006) for
producing knowledge about income inequality, and that neither of these regimes
was capable of tracking movements in top incomes. Macroeconomists focused on labor’s
share of national income, but did not examine the distribution of income
between individuals. Labor economists, on the other hand, drew on newly
available survey data to explain wage disparities in terms of education, age,
work experience, race, and gender. By relying on surveys, these scholars
unintentionally eliminated top incomes from view: surveys top-coded high
incomes, and thus were incapable of seeing changes in the top 1%. Studies of
top incomes that relied on income tax data thus fell by the wayside, creating
the conditions under which experts, policymakers, and the public alike could be
surprised by the rise of the 1%. This historical narrative offers insights into the political
power of economic expertise by clarifying the complex linkages between
observations, stylized facts, causal theories, and policy attention.