Chalk one up for continental Europe’s economic architects. For the past several decades, the Anglo-Saxon consensus was that state interference in the private-sector economy was a mistake. Government bureaucrats were in no position to pick economic winners and losers – and if standing aside meant letting the forces of creative destruction sweep away entire industries, so be it.
We know now that trickle-down economics doesn’t really work – the past decade in the United States has seen incomes at the very top soar, while the earnings of the middle class stagnated or declined. But a growing body of academic research is suggesting that this benign force’s wicked stepsister, a phenomenon two economists have dubbed ‘‘trickle-down consumption,’’ is having a powerful impact on the economy and politics of the United States.
With hindsight, we may find that the 2016 U.S. presidential race began last week, when Hillary Rodham Clinton made a politically electrifying point. ‘‘Why extremists always focus on women remains a mystery to me,’’ she said at the Women in the World conference in New York. ‘‘But they all seem to. It doesn’t matter what country they’re in or what religion they claim. They want to control women.’’
Forget Roman Catholics and contraception, evangelicals and Mormonism, Newt Gingrich’s three wives and even Mitt Romney’s dog. If you are struggling to understand a roller-coaster U.S. election season, described by one writer as “wackadoodle,” your Rosetta Stone should be a dry academic paper by the economist Emmanuel Saez.
To understand the significance of the presidential election this weekend in Russia, read a book by two U.S.-based academics that is being published this month. Why Nations Fail by Daron Acemoglu and James Robinson, of the Massachusetts Institute of Technology and Harvard University, respectively, is a wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don’t.