Inequality and Democracy
by Will Wilkinson
The Conversation
October 28th, 2009
I heartily agree with Elizabeth Anderson that a good deal of the United States' legal and regulatory regime has been rigged to lock in the advantages of well-financed corporate and other interests. However, it's not clear that this is any worse in the United States than in many European countries with significantly lower levels of income inequality. Again, it's just not clear what income inequality has to do with it. Regulatory capture, anticompetitive rent-seeking, and the like aren't so much matters of aggregate inequality as they are matters of institutional structure and design. This is why relatively firm limits on governmental legislative and regulatory discretion are ultimately progressive. The less constrained the power of politicians and bureaucrats, the more urgent it becomes for organized interests to gain and keep their favor. If interests with more resources tend to win this bidding war, it doesn't follow that inequality in resources is the problem. I can't put it any better than David Schmidtz, who says:
Realistically, if power is being bought and sold, then turned against us, the solution is not to make sure no one is rich enough to buy power but instead to learn how to stop politicians from creating and selling it. Leveling economic shares would not address the real problem. If selling X for a dollar is bad, we go after people who sell X, not people who have a dollar.
Anderson's argument that, past some critical threshold level, rising inequality can lead to the domination of democratic institutions by the wealthy and transform the government into a de facto plutocracy, in which only the rights and liberties of the wealthy are secure, is an example of what I've called the "Inequality Road to Serfdom" argument. Like its Hayekian counterpart, I find the argument implausible. In order to work, the argument would need to establish the truth of several claims that appear to be false. Most versions of the Inequality Road to Serfdom argument seem to assume that the "the wealthy" constitute a class unified by shared interests and common political objectives, and can be expected to act politically as a class to enact policy that consolidates and secures their economic advantages. But very little of this seems to be true.
The "self-interested voter hypothesis" is poorly supported. (Here is a nice overview from Bryan Caplan [pdf].) The bulk of the evidence supports the idea that individuals cast ballots more or less according to the dictates of conscience or ideology. Moreover, as Anderson's University of Michigan colleague Ronald Inglehart has discovered, as people become wealthier, they generally become less "materialistic" and more concerned with questions of meaning and social justice. It makes sense that those of us most anxious about economic security would put a relatively heavy emphasis on material concerns. Columbia political scientist Andrew Gelman and his coauthors find that Inglehart's post-materialism hypothesis fits the relationship between income level and voting in the United States. They find that while low-income voters strongly favor Democratic candidates, high-income voters are split more or less evenly between parties. The difference between high-income Republicans and high-income Democrats, they find, is largely explained by religiosity — by differences in social and spiritual values. To put it very roughly, rich people who go to church a lot are Republicans, rich people who don't are Democrats. There is very little indication that the wealthy in the United States act as a coherent class with common interests and political aims.
The Inequality Road to Serfdom arguments also tend to assume that it is easy to convert economic resources into political resources. Here's Robert Dahl summary of the idea:
Because market capitalism inevitably creates inequalities, it limits the democratic potential of [the best kind of liberal] democracy by generating inequalities in the distribution of political resources. Because of inequalities in political resources, some citizens gain significantly more influence than others over the government's policies, decisions, and actions.
However, according to Dahl, political resources are a varied lot that includes status, honor, respect, affection, charisma, prestige, information, knowledge, education, communication skills, access to the media, organization, legal standing, persuasive influence over doctrine or belief, votes, and more. Among these, Dahl tends to put special stress on the capacity to affect public opinion and the policymaking process. As much influence as FoxNews and Rush Limbaugh may have, their shtick depends crucially on the fact that left-leaning opinion is so thoroughly dominant in the academy and in most major organs of establishment media.
When it comes to directly affecting policy, academic economists such as Christina Romer, Larry Summers, and Austan Goolsbee who have been tapped to advise the president have more effective political power than most billionaires can buy. Indeed, the young grads of top law schools selected to clerk on the Supreme Court have more direct influence on law than most lobbying firms could hope to have. How about Brian Deese, the unelected, inexperienced junior member of the White House economic policy staff charged with "dismantling General Motors and rewriting the rules of American capitalism," as The New York Times put it?
The elite academic and political networks that facilitate access to this kind of immense political power are certainly exclusive, and you're probably out of luck if you were born poor or attended an unremarkable state college. At the same time, you can't exactly buy your way into Yale Law School or the MIT economics department. Say what you will about the processes that distribute access to the exclusive networks that help create and sustain high levels of inequality in political influence, but it remains that money won't get you elected the editor of the Harvard Law Review.
Many powerful opinion leaders and policymakers favor a more redistributive politics. Still, the poor are sorely lacking in political resources. What are we to make of that fact? In light of the weakness of economic class interest as a political motive (especially among the wealthy) and the significant political resources arrayed in favor of redistribution, we cannot just assume that the interests of the poor are endangered by inequalities in "voice." Anderson mentions Larry Bartels' book Unequal Democracy: The Political Economy of the New Gilded Age, which shows that congressmen are relatively unresponsive to their lower-income constituents. Such facts may lead us, reasonably enough, to worry that the interests of the least well-off will go unprotected by the democratic process — that the "cash value" of their formally equal political rights will be too little, leaving them especially vulnerable to abuse and neglect by the democratic process. But, as Bartels points out, his own analysis points to "bright spots in an otherwise gloomy picture":
First, the correlation between class positions and political views is not so substantial that support for egalitarian policies is limited to "those mired in poverty." Just as many poor people espouse antipathy to redistribution and the welfare state, many affluent people support egalitarian policies that seem inconsistent with their own narrow material interests. Insofar as the political activism of affluent egalitarians "does perform as advertised," policy makers may be much more generous than the political clout of the poor would seem to warrant.
Indeed, if we care about the welfare of the least privileged members of our society, a focus on equality of "voice" may actually be paradoxically counterproductive. The issue is improving the welfare and opportunity of the poor. That is, the issue is whether policy intended to do this "performs as advertised." It is not surprising that the poorest Americans are generally the least well-educated and have the least access to information about politics and policy. But it would be surprising if those citizens who are least likely to know the names of candidates, least likely to know the policies candidates support, and least likely to have the kind of education that would allow them to evaluate the effectiveness of alternative policy proposals would be able to use democratic participation to advance their interests and promote their values effectively. Everyone should have the means to make informed and effective democratic decisions. It would be ideal were each and every citizen to have the income and education typical of well-informed, motivated voters. To get closer to this ideal, we need policies that will actually work to promote broader prosperity and a fuller realization of basic human capacities. We may want to equalize "voice," but then we need to know what would make that happen, and the democratic public, such as it is, has to vote for it.
