Income inquality creates political inequality (31 January 2007)

Often when income inequality is debated, the focus is fixed on individual happiness -- one's income is conceived primarily as a proxy for one's personal pleasure. Thus if you are happy with what you make, it should make no difference to you if your boss makes in a day what it takes you all year to make. If you were troubled by such comparisons, you will have fallen prey to the insidious politics of envy. This TNR piece by Brad Plumer does a good job refuting that notion. Income inequality is not a problem merely because it invites invidious comparisons and provokes questions about society's basic fairness; the overriding problem is that it undermines the way democracy functions, allowing the rich to fashion a stealth oligarchy. Plumer notes how most legislators are rich (as you'd expect in the absence of publicly financed elections) and they listen primarily to rich constituents (who they can relate to and who generally support their campaigns and who are far more likely to vote than the poor). The consequences? The government's power is used to accelerate the redistribution of wealth upward -- Plumer directs us to CEPR economist Dean Baker's highly readable book The Conservative Nanny State (available free here) for an explanation of the various tools used for this -- bankruptcy laws, protectionism for white-collar professionals, tort reform, subsidies, tax loopholes, etc. And thus a feedback loop is fashioned and the wealthy get wealthier and more politically powerful -- the recent income data seems to bear this out.

So what do we do? Despair? As Scott Lemieux explains, "The most important means of redressing the problem (given current First Amendment law) is robust public financing of campaigns--but the pre-existing structural inequalities essentially make this virtually impossible." Julian Sanchez notes that he has argued that "the best response was to have a government too limited in its economic power to merit buying, though there's surely something of a chicken-and-egg problem there." He wonders also if income isn't a proxy for education. It may be that highly educated people (like the not-so-wealthy writers working for political journals, perhaps) influence politics disproportionately. It seems to me that at a certain point political involvement becomes a sociological question, a matter of having the accumulated influence, connections, and know how to participate and truly affect the process in a way that goes beyond voting -- having cash to contribute to a campaign or hire lobbyists is just the most obvious way of acquiring political capital; belonging to a union that serves as a counterveiling power representing your interests might be the most feasible alternative for those with less cash flow. Of course then the union itself becomes subject to questions about whose interests its leadership really represents as well.