83 Pages Posted: 19 Nov 2015 Last revised: 20 Nov 2015
Date Written: November 1, 2015
I describe the American economy in the twenty-first century as a dual economy in the spirit of W. Arthur Lewis. Similar to the subsistence and capitalist economies characterized by Lewis, I distinguish a low-wage sector and a FTE (Finance, Technology, and Electronics) sector. The transition from the low-wage to the FTE sector is through education, which is becoming increasingly difficult for members of the low-wage sector because the FTE sector has largely abandoned the American tradition of quality public schools and universities. Policy debates about public education and other policies that serve the low-wage sector often characterize members of the low-wage sector as black even though the low-wage sector is largely white. This model of a modern dual economy explains difficulties in many current policy debates, including education, healthcare, criminal justice, infrastructure and household debts.
Keywords: inequality, dual economy, race, education, criminal justice, Nixon, Reagan, political economy
JEL Classification: H53, J68, N32
Suggested Citation: Suggested Citation
Temin, Peter, The American Dual Economy: Race, Globalization, and the Politics of Exclusion (November 1, 2015). Institute for New Economic Thinking Working Paper Series No. 26. Available at SSRN: https://ssrn.com/abstract=2692634 or http://dx.doi.org/10.2139/ssrn.2692634