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Economists have long taught that there is a tradeoff between efficiency and equity -- that is, between making a bigger pie and dividing it more fairly. This idea is what makes our current predicament so puzzling: today we are faced with both a stagnating economy and sky-high inequality. Both problems have many causes, but Brink Lindsey and Steven M. Teles argue that one cause-state action to entrench privilege by subverting market competition - is common to both. When the state assumes this role, the tradeoff between equity and efficiency no longer holds.
Over the past 40 years or so,...