Summary Of Edward Conard's Argument For Lower Taxes Undermine The Middle Class

Matthew Leav

PPE 400

Lowe

February 6th, 2023

Explaining Edward Conard’s Argument for Lower Taxes on the Rich

In his book The Upside of Inequality: How Good Intentions Undermine the Middle Class, Edward Conard argues that lowering taxes on the rich would lead to higher growth and further innovation which would justify any resulting economic inequality (Lowe 2023). He argues that the notion that America’s richest members are to blame for growing inequality is mistaken (Conard 12). Rather, inequality is a result of growth and innovation and is an unavoidable consequence in a developing economy (Conard 13). In this paper I will seek to explain this argument.

Conard’s Sentiment

Before delving into an explanation of Conard’s argument, it is worth

He points to two key factors that cause inequality yet are necessary engines for growth (Conard 16). Due to the uncomplicated fact that the economy is growing larger, the 1% grows richer (ibid). Conard uses an example of Taylor Swift and her ability to reach a far larger set of customers than say a doctor or lawyer (ibid). For example, the 1% which includes many performers and CEOs will naturally continue to grow richer when their products can reach more people (ibid). Thus, a larger economy disproportionately benefits the people at the top. This is not to their fault, but rather a consequence of economic growth. It is logical, Conard claims, that as the world’s population has increased, income inequality has grown on a global level (Conard 17). Similarly, the new nature of the economy grounded in information technology further benefits the most productive workers (Conard 14). Information technology has not only made workers more productive, but it has opened new investment opportunities that are primarily available to the most productive people who already have access to the most information, most talent and most wealth (Conard 18). With expanding opportunities and more skilled people demanding higher wages, the world has grown more prosperous and innovative. Therefore, it makes sense that

As Conard puts it, the “benefits of risk taking compound gradually” and there is a “positive feedback loop” associated with lower taxes on the rich (Conard 71). He identifies various areas where incentives and successful risk-taking have powerful effects. New companies like Google and Facebook are products of a successful risk which in turn create jobs and valuable employee training that is difficult to find in other countries and industries (Conard 12). Additionally, previously mentioned “synergistic” communities of experts are further reinforced and created (ibid). In these communities, people can exchange ideas more freely which leads to innovation that compounds on itself. On a larger scale, Conard argues that the “the growing success of successful innovators raises the bar for social status” (Conard 71). Like many standard arguments for capitalism, Conard essentially believes that seeing others succeed and profit will drive others to take their own risks in the pursuit of success which will further contribute to economic growth and society's well being. All of this is made possible by lowering taxes on the