The role of government in the economy has been a major public policy issue for more than two centuries. Critics of capitalism, at least sinceKarlMarx, havearguedthatthe systemis skewedto benefitthe political and economic elite at the expense of the masses: the proletariat over the bourgeoisie, as Marx put it, or the 1 percent over the 99 percent, as the Occupy Movement that began in 2011 put it. Two recent books have looked at these issues, one from the vantage point of the political left and the other from the political right. Joseph Stiglitz, a Nobel laureate economist and frequent commentator on the political left, discusses the way the system is skewed to support the 1 percent over the 99 percent in his book The Price of Inequality (2012), while conservative writer and former Michigan congressman and budget director in the Reagan administration David Stockman addresses these same issues from the political right in The Great Deformation (2013). Considering their political leanings, it is worth emphasizing how much their books have in common when describing the causes of the major economic and political problems they perceive in the United States. Both Stiglitz and Stockman argue that corruption of the U. S. political system is damaging both the economic system and democracy. This article documents the commonality of ideas in their two books while recognizing the significant differences in their policy recommendations.

A Reply to the Comment by Zhipeng Li, Zhilin Yang, and Hongxing Xu

We show that Bailey’s rule holds true in Cole and Stockman’s (1992) modelof endogenous specialization.

We show that Bailey's rule holds true in Cole and Stockman's (1992) model of endogenous specialization.

We show that Bailey’s rule holds true in Cole and Stockman’s (1992) modelof endogenous specialization.