The liberal solutions to fight inequality and poverty reuduction championed by liberal economists are wrong. Deirdre McCloskey explains why to Vita International.

Joseph Stiglitz pronounced the “experiment” of the “market economy” over the past 30 years a failure. Is it true?

No, unless you think a doubling of world real incomes per head, a sharp rise in literacy and life expectancy, a dramatic improvement in access to drinking water, and on and on, all from liberal markets, is a "failure." Joe is a nice fellow, but believes that income comes from consuming more instead of producing more, and that restricting employment will raise the demand for workers, and that "struggle" is what explains rising real wages, and all manner of other fairy tales from the political left. The biggest "experiments" have been in China and India, which moved away from the policies Joe favors---slow, or fast, socialism---towards a market economy.

Even in the old countries, when the governments have not crushed market-tested betterment with regulation ("not": Ireland, Switzerland, the UK, the USA; but "crushing": Italy, France, Greece), real incomes measured to include quality improvements have risen. The longer "experiment"---Joe is a short-run sort of economist---is the new liberalism of Europe and its offshoots and then its imitators after 1800. Moving away from guilds and protectionism and mercantilist tales of aggregate demand arising from money flows raised the incomes of the poorest people in the countries that made the move by 3,000 percent. Not 300 percent, my dear students, but a factor of 30, near three thousand percent over the base in 1800. Thus Italy. Some "failure."

You say economists such as Thomas Piketty and politicians such as Bernie Sanders have been stressing the dangers of economic inequality. What do you argue?

I argue that, for one thing, important inequality has not increased. Equality of basic goods, such as housing and food and medical care and education, is much greater in Italy, say, than it was in 1960. For another, why would one care that Liliane Bettencourt, the richest woman in the world and one of Piketty's black beasts, has an absurdly large number of chateaux and yachts? I am sure that I don't. Only a silly and sinful envy would make one care. Her riches made no one poorer. For still another, Piketty and Sanders do not include the main capital in the modern world, human capital. They imagine we still live in 1848, the year of the Communist Manifesto, when indeed labor was uneducated and the bosses had all the land and factories. Now the significant factories are mainly inside your head and mine. We own them. For another, inheritance is a very small factor even in financial-asset inequality. For another, policies introduced to stop inequality routinely work to increase it. The Duke of Westminster just died, the richest man in England. Why so rich? Because restrictions on planning permission in London have made land rents soar---as his name implies, he owned much of the land on which London is built.