Those at the bottom will move to cheaper places like Texas. He recommends beans and tortillas as a delicious and nutritious diet (as in "An Economist Gets Lunch").
Much of this is already happening to some extent. Our most liberal areas (New York, the Bay Area) have the greatest income disparities. Drive down Middlefield Road in Silicon Valley and in one mile you go from $4 million walled mansions to what looks like rural Mexico.
Brookings's William Galston, writing in the Wall Street Journal, feels "justified revulsion" at this. He accuses Cowen of "moral indifference." I would accuse him of focusing too narrowly on economics.
People get satisfaction out of more than just earning money. They get satisfaction out of what American Enterprise Institute president Arthur Brooks calls earned success.
Earned success can come from high earnings or from simply doing a job well. It can come from raising children and meeting family obligations.
It can come from working with people in your community or your church, or with others with common interests. Even people of very limited abilities can earn success and live fulfilling lives.
Cowen predicts the masses won't revolt. They will have comfortable lives and good entertainment -- bread and circuses.
I suspect he's right. America in the 1920s had more inequality than today and there was no revolution.
Inequality was then reduced by three unpredicted developments, two of them unwelcome.
The Depression of the 1930s reduced high and middle incomes. World War II ended unemployment and raised wages.
Wages rose in postwar America because labor was scarce (the 1930s birth dearth) and foreign competition imperceptible.
Those conditions ended around 1970. Inequality rose. Perhaps that's the default mode.
Galston wants to reduce inequality. I say we should do more to strengthen social capital so that everyone can earn success.
Unfortunately, neither of us seems to know how.