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PARTISAN REVIEW
inspection of the same data reveals a marked slowdown for overlapping
six-year periods since
1964.
Through
1970,
price-deflated spendable
income per head rose some 20 to 24 percent every six years, but since
1973
six-year increases have dropped below
15
percent, and for
1973-1979,
down to 11 percent. The feeling that things are getting
worse may rest on something more substantial than the psychological
"money illusion " which Thurow sees at the root of the popular
malaise. (Thurow may be modifying his views; in a more recent
New
York Times
column, he concedes a 3 percent fall in "real per capita
standards of living" since
1976.)
In fact, if per capita living standards
have held up at all, the reason may be intensified labor effort-more
hours worked per unit of population . Only the proliferation of the
two-job household has allowed many Americans to "cope" with
inflation, it seems. Furthermore, as a Bureau of Labor Statistics study
showed in
1979,
a rising proportion of women entering the labor force
have husbands in the upper half of the income distribution , so that
"the gap between above-average income families and below-average
income families will widen" in the years ahead.
Doubts still more specific must be raised about the zero-sum theme
that "everyone keeps up with inflation because everyone is part of the
cause of inflation." Thurow 's contention that lower income groups
have suffered from inflation no more than upper income recipients is
undercut, for example, by his own data indicating that a doubling of
energy prices reduces average real incomes by
10
percent-but 5 percent
for the richest decile,
34
percent for the poorest. Housing costs, pushed
higher by the virtual disappearance of new rental units, likewise hit the
poor harder than the rest of us, particularly since the lower the income
percentile, the smaller the proportion of homeowners (and the rarer the
ownership of that guaranteed "inflation hedge"). Property incomes,
along with the real value of common stocks and bonds, have also felt
the whiplash of inflation, but meanwhile the rich have been switching
to alternative forms of wealth (commodities, real estate, mineral and oil
rights, stock options). Only individuals with substantial cash reserves
and knowledge of capital market opportunities can hope to find safe,
inflation-adjusted methods of holding their savings.
Yet even if we grant Thurow's argument that corporate America
has fully shared in the economic miseries of the past decade, the
question of power would remain unaffected. The corporate sector, and
its upper-income constituency, wield the veto over policies that might
be adopted as remedies for serious economic problems. Price controls
and comprehensive economic planning, nationalization of energy,
