Inequality and Democracy

Reihan Salam says his "sense is that many on the left are bothered by the massive increase in income and wealth among the top 1 percent because they believe this threatens the democracy by giving a small handful of households outsized influence." That's not really what bothers me about the massive increase in economic inequality, but in response Brad Plumer rounds up the empirical evidence for the "outsized influence" thesis and it's really quite compelling.

This paper from Larry Bartels is especially telling.

Comments

so if not that, then what does really bother you about the massive increase in economic inequality?

Posted by right | September 11, 2006 12:39 AM

Well I'm definitely one of those on the left who are bothered by inequality precisely because of the ineluctable positive correlation between wealth and power, and the resulting outsized influence of the wealthy over our social choices.

My view is that true democracy is only possible wih substantial equality of outcome in addition to equality of opportunity. It doesn't matter deeply what sorts of voting arrangements or formal political structures one has set up. Wealth consists in the possessible objects of human desire, and those who control the objects of desire control the choices people make. Even equality of opportunity is an illusion without equality of outcome. Unless you institute a sytem whereby children are taken by the state and raised as its wards in equal circumstance, then inequality of outcome for the parents' generation translates into inequality of opportunity for the children.

Posted by Dan Kervick | September 11, 2006 1:35 AM

Matt, the site you point to claims that 60% of income goes to the top 1%, but the NBER report that site links to in support of the claim does not support it. (More like 14%, which is still a lot but not as plutocratic as 60% would be.) Take a look yourself.

Posted by Barry | September 11, 2006 7:38 AM

It's worth noting that that's one of the reasons Rawls opposed large inequality- that it made preserving the "fair value" of the political liberties impossible. I think he was exactly right.

Posted by Matt | September 11, 2006 9:21 AM

Matt, the site you point to claims that 60% of income goes to the top 1%, but the NBER report that site links to in support of the claim does not support it.

From Brad Plumer's site:

"First, some statistics. Between 1979 and 2003, the income of the richest one percent of Americans more than doubled, the income of the middle 15 percent grew by only 15 percent, and the income of the poorest 20 percent barely budged, according to the CBO. By the late 1990s, the richest one percent of Americans households had a third of all wealth in the economy, and took in 14 percent of the country's income—a greater share than at any point since the Great Depression. These days you can't swing a dead gerbil without hitting some leftist faithfully reciting these figures, but I thought I'd repeat them anyway."

Perhaps he edited his post, though Plumer strike me as the sort who would have noted such edits.

Posted by SomeCallMeTim | September 11, 2006 9:55 AM

He did acknowledge the edit, in comments:

" Brad Plumer, the link for your claim that the top 1% take in 60% of income does not in fact say this.
James B. Shearer | 09.11.06 - 2:26 am | #

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Right, more like 14%. Where's the disconnect?
BG | 09.11.06 - 4:39 am | #

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Right, right, it's 14 percent. 60 percent is obviously ridiculous. Careless typo on my part, apologies -- I'll change it now.
Brad Plumer | Homepage | 09.11.06 - 5:56 am | #

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Posted by Barry | September 11, 2006 10:33 AM

I'm with Kervick. The whole "equality of opportunity" thing is silly. The world we actually live in is made up of outcomes.

Posted by lemuel pitkin | September 11, 2006 10:39 AM

By the way, the new State of Working America reports that the top 1% has 34% of all wealth, and the top 5% has 60%. So if you think wealth is a better proxy for political power than income, Plumer's original number wasn't so far off.

Posted by lemuel pitkin | September 11, 2006 11:30 AM

- The whole "equality of opportunity" thing is silly.

I know lemuel pitkin has given substantial thought to this issue, but this dismissal is still unfairly blithe. Obviously people who advocate equality of opportunity do so from a different set of assumptions and priorities. I'd agree that our society has become unduly unbalanced, but due to the circumstances that have led to the current stat of affairs, it hardly serves to dismiss the value of equality of opportunity over outcomes.

Posted by mpowell | September 11, 2006 1:01 PM

Outcomes are real. My income is $60,000, yours is $40,000, his is $250,000 - those are outcomes. The statistics quoted above on income and wealth -- outcomes. Outcomes can be measured, so equality of outcome can be defined and assessed for wahtever variable and popualtion you like. But opportunity? That's about whether someone's circumstances are the result of their own choices, whetehr they "could have" done better or worse, whether they deserve thier good or bad fortune. It's intrinsically unmeasurable and can't be separated from moral judgements.

So to put equality of outcome and equality of opportunity on the same footing is, yes, silly. One is real and measurable. The other is, quite literally, speculation about what might have been.

Posted by lemuel pitkin | September 11, 2006 2:30 PM

What do you mean, the same footing? All that you're saying is that they're very different. And then you impute one w/ a greater significance as a result.

And what kind of criticism of opportunity is this? B/c its hard to measure its less valuable to aim for? B/c its more easily enlisted to justify inequalities of outcomes arising from unfair conditions? - I think might be what you're really upset about. But even if it could be measured accurately, wouldn't you be more interested in equality of outcomes anyhow?

The set of legal and social conditions that define different individuals' opportunities are perfectly real. My justification for defending my particular preferred order is not based solely on achieving equality of opportunity nor is it dependent on being able to come up w/ a precise definition of opportunity. This is fairly typical, and I'm sure you know it. Why attack a principle of certain political philosophies b/c its name is vague?

I have two questions for Kervick. The first is very specific and not intended to challenge his position at all: what level of inequality begins to create a problem for democracy? Second, can a market economy really sustain equality of outcomes and opportunity?

Posted by mpowell | September 11, 2006 3:48 PM

Lemuel Pitkin says
"By the way, the new State of Working America reports that the top 1% has 34% of all wealth, and the top 5% has 60%. So if you think wealth is a better proxy for political power than income, Plumer's original number wasn't so far off."

I agree wholeheartedly. That's similar to the number I read in a book called "The Rich and Super Rich" by F. Lundberg back in the '60s, when I was a starry-eyed teenage capitalist, and no other statistic ever changed my political views as dramatically.

Posted by Barry | September 11, 2006 4:39 PM