William Lazonick is a Professor at the University of Massachusetts Lowell, where he directs the Center for Industrial Competitiveness. He is also a Visiting Professor at the University of Ljubljana where he teaches a PhD course on the theory of innovative enterprise. Previously he was an Assistant and Associate Professor of Economics at Harvard University, Professor of Economics at Barnard College of Columbia University, and Visiting Scholar and then Distinguished Research Professor at INSEAD.
Denmark turns out to be the best country in the world for a poor kid to grow up in — not because they’re more likely to get a middle class job but because their government helps them more than anybody else’s does. Denmark’s top marginal tax rate is 60 percent, and it applies to all income over 1.2 times the national average – and Denmark redistributes from the higher income to the lower income, so the gap is one of the smallest in all advanced nations.
By contrast, the U.S. is one of the worst of all advanced countries for a poor kid to grow up in, and fewer poor children escape poverty than in any other. The U.S. government redistributes least of all advanced nations. American parents pass on about 47 percent of their economic advantage to their children compared to just 15 percent for Danish parents.
So why is “redistribution” such a bad word in America?
It’s one of the greatest inventions of all time, and just like it says on the dollar bill – novus ordo seclorum – it created an entirely new order in human affairs. After millennia of pharaohs, emperors, kings, queens, sultans, caesars and czars, with all their attendant aristocracies and locked-down social structures, a country was founded where birth and lineage didn’t matter so much, where by application of your talents, energy, labor and willingness to play by the rules, you could improve your material lot in life and achieve a measure of economic security for yourself and your family. Peasants and proles could aspire to more than mere survival. Radical! The Guardian