are poor because those who have power make choices
that create poverty. They get it wrong not by mistake or
ignorance but on purpose. To understand this, you have to
go beyond economics and expert advice on the best thing
to do and, instead, study how decisions actually get made,
who gets to make them, and why those people decide to
do what they do. This is the study of politics and political
processes. Traditionally economics has ignored politics,
but understanding politics is crucial for explaining world
inequality. As the economist Abba Lerner noted in the
1970s, “Economics has gained the title Queen of the
Social Sciences by choosing solved political problems as
its domain.”
We will argue that achieving prosperity depends on
solving some basic political problems. It is precisely
because economics has assumed that political problems
are solved that it has not been able to come up with a
convincing explanation for world inequality. Explaining
world inequality still needs economics to understand how
different types of policies and social arrangements affect
economic incentives and behavior. But it also needs
politics.