Neoliberalism and Income Mobility

♠ Posted by Emmanuel in at 5/26/2007 04:22:00 AM
The US and the UK are supposed to be countries following an "Anglo-Saxon" or "neoliberal" economic model. According to this model, the gap between the haves and have-nots is tolerable for it rewards those who work hard enough with upward mobility. As Margaret Thatcher famously said, "It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all." But, the evidence suggests this is not so. The US has the highest Gini (inequality) coefficient of all OECD countries, while the UK has the highest for Western European countries. So far, there's no surprise. Worse yet, it also turns out that the US and the UK not only have highly unequal societies, but also are bound to stay that way. From the Economic Mobility Project's "American Dream Report" (they're kidding, right?) we have this figure comparing relative income mobility in a number of industrialized nations:

If that weren't depressing enough for Americans, have a look at this figure:


The same pattern is noted in this paper by a number of Nordic researchers. The UK and the US are highly unequal and offer little room for bettering your fate. And people wonder why spreading the "American system" gets so much resistance in developed and developing countries worldwide. If social justice is your benchmark, neoliberalism fails bigtime. The American dream is dead, my friends.