Paul Krugman's good column on SCHIP today has a paragraph that is worth examining. Here's what I mean: The great majority of Americans believe that everyone is entitled to a chance to make the most of his or her life. Even conservatives usually claim to believe that. For example, N. Gregory Mankiw, the former chairman of the Bush Council of Economic Advisers, contrasts the position of liberals, who he says believe in equality of outcomes, with that of conservatives, who he says believe that the goal of policy should be "to give everyone the same shot and not be surprised or concerned when outcomes differ wildly." It's funny this summary of the liberal-conservative divide is still being used. If I have my history right, it's a product of a debate that began in the early 1970s between two heavyweights, John Rawls and Robert Nozick. I don't quite have the time or the chops to do their debate justice, but it was unique to the era when it occurred, the "golden era" of growing equality, with the major disagreement being over how to address systemic racial injustice. Today, things look much different, and the gap between the very rich and everyone else, and the growing divergence between the median wage and productivity growth are much more important than they were in the 60s and 70s. You'd think the way we talk about the difference between liberals and conservatives would change, but at least in the op-ed section of the NY Times, it hasn't. Here's a suggestion: the most important difference between liberals and conservatives these days is over the reliability of the market to respond correctly to economic inputs. Conservatives think the market more accurately rewards things like hard work and talent the less government is involved. Liberals believe that government must intervene in the economy to ensure that effort is justly rewarded. To me, inequality is "interesting" because it demonstrates that there is something deeply wrong with how our economy distributes things. The people at the top seem to be getting richer without doing anything to deserve it, while everyone else contributes more but doesn't get anything in return. This development has coincided with the retreat of government invervention in the economy. Nozick and Rawls, to my knowledge, did not address the question of what best ensures the full return to labor and capital. Essentially, I imagine, it was taken for granted that people got their full return. It's time for the debate to move on.