Summary

In "The Conscience of a Liberal," Paul Krugman embarks on an intellectual journey through the economic and political history of the United States, particularly focusing on the rise and fall of the middle class. Krugman posits that America's post-World War II prosperity, characterized by relative economic equality and bipartisan cooperation, was an exceptional period rather than the natural state of a mature nation. He argues that this 'golden age' was deliberately constructed through policies like progressive taxation, strong labor unions, and social safety nets, which compressed income inequality and fostered a sense of shared prosperity.

Krugman contends that the resurgence of economic inequality since the 1970s is not simply the result of impersonal market forces such as technological change and globalization, but also a consequence of deliberate political choices. He identifies the rise of movement conservatism within the Republican Party as a key driver of policies that favor the wealthy elite, such as tax cuts for the rich, deregulation, and attacks on unions. These policies, Krugman asserts, have led to a 'Great Divergence,' where the benefits of economic growth are increasingly concentrated at the top, while the majority of Americans experience stagnant or declining living standards.

The book delves into the historical context, examining the Long Gilded Age (1870s-1930s) and the subsequent Great Compression (1940s-1970s). Krugman highlights how political action, particularly under Franklin D. Roosevelt's New Deal, played a crucial role in creating a more equitable society. He contrasts this with the conservative dominance in the pre-New Deal era, characterized by vast inequality and minimal government intervention. He also explains how racial divisions, especially in the South, have historically undermined efforts to build a broad-based coalition for economic equality.

Furthermore, Krugman critiques the narrative that technological advancements are solely responsible for the increased demand for highly skilled workers, arguing that this view fails to account for the extraordinary gains made by a very narrow elite. Instead, he attributes surging inequality to the erosion of social norms and institutions that once promoted equality, driven by the rightward shift in American politics. The book explores the role of institutions like think tanks and media organizations in promoting a conservative agenda, and examines how the Republican Party has successfully exploited cultural and social anxieties to win elections.

In the latter part of the book, Krugman shifts his focus to the present and future, arguing for a new politics of equality centered on expanding the social safety net and reducing income disparities. He advocates for universal health care as the cornerstone of this new New Deal, drawing lessons from the success of Medicare and the failures of past reform efforts. He emphasizes the need to confront inequality head-on through policies that strengthen unions, increase the minimum wage, and restore progressivity to the tax system. Krugman urges liberals to embrace their values, challenge the dominant conservative narrative, and build a broad-based coalition to create a more just and prosperous society.