Professor Mankiw: " fight 1%'er rent-seeking if it exists"

A nice catch in Journal of Economic Perspectives: Vol. 27 No. 3, from vbounded:

...Imagine that the government were to favor its political allies by granting the monopoly power over certain products, favorable regulations, or restrictions them monopoly power over certain products, favorable regulations, or restrictions on trade. Such a policy would likely lead to both inequality and inefficiency. Econo-on trade.  Such a policy would likely lead to both inequality and inefficiency. Econo-mists of a ll stripes would deplore it. I certainly would I certainly would.

There is no good reason to believe thatrent- seeking by the rich is more pervasive today than it was in the 1970s, when the rent-seeking by the rich is more pervasive today than it was in the 1970s, when the income share of the top1 percent was much lower than it is today. income share of the top 1 percent was much lower than it is today.

I am more persuaded by the thesis advanced by Claudia Goldin and LawrenceKatz(2008)intheirbookKatz (2008) in their book The Race between Education and Technology.GoldinandKatz. Goldin and Katzarguethatskill- biased technological change continually increases the demand for argue that skill-biased technological change continually increases the demand for skilled labor. By itself, this force tends to increase the earnings gap between skilled skilled labor.....

Nonetheless, to the extent that Stiglitz is right that inefficient rent-seeking is a driving force behind rising inequality, the appropriate policy response is to address the root cause.  ..

I'm skeptical that such rent-seeking activities are the reason why inequality has risen in recent that such rent-seeking activities are the reason why inequality has risen in recent decades, but I would support attempts to reduce whatever rent-seeking does occur.

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