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The Inequality Road to Serfdom

- December 7, 2010

There are many lines of argument in Larry Bartels’ important book _Unequal Democracy_, and I’m in no position to constructively evaluate the most data-intensive among them. But I think I can discern a general overarching argument, and I hope I’ll be able to say something useful about that.

I interpret Bartels to be offering a complex version of what I like to call the “Inequality Road to Serfdom” argument. This argument, in a nutshell, is that once the level of economic inequality passes a certain critical threshold, the wealthy as a class will be in a position to capture the democratic process, bend it to their interests, and leave the middle and lower classes with insufficient protection of their political rights and economic interests. The further we travel down the road of rising inequality, the closer we come to the gutting democracy and replacing it with plutocracy or oligarchy. Bartels’ quotation from Louis Brandeis sums up the thought: “We can have a democratic society or we can have concentrated wealth in the hands of a few. We cannot have both.”

Central to all versions of the Inequality Road to Serfdom arguments are a set of assumption about the convertibility of economic power into political power and a set of assumptions about the self-interested motivation of voters. The plausibility of the argument stands or falls on the plausibility of these assumptions.

One of Bartels’ most important contributions is his finding that “the affluent have considerable clout, while the preferences of people in the bottom third of the income distribution have no apparent impact on the behavior of elected officials.” Bartels argues that such findings are

bq. …especially troubling because they suggest the possibility for a debilitating feedback cycle linking the economic and political realms: increasing economic inequality may produce increasing inequality in political responsiveness, which in turn produces public policies that are increasingly detrimental to the interests of poor citizens, which in turn produces even greater economic inequality, and so on.

One of my chief difficulties with _Unequal Democracy_ is that it is unclear how the inequality-reducing redistributive policies Bartels seems strongly to favor would make any difference whatsoever to this sort of dynamic. Is the idea that senators pay more attention to their lower-income constituents when those constituents receive more generous government transfers? Bartels says that wealthier Americans are more likely to know about politics and more likely to actually contact their representatives. But it’s not clear to me how progressive redistribution decreases the level of knowledge or engagement of the wealthy relative to the poor. Perhaps this could be clarified.

Income-related disparities in political knowledge raise another profoundly important question that Bartels seems to me to avoid addressing directly. Would equalization of political responsiveness make lower-income voters better off?

In _Unequal Democracy_, Bartels argues that the American electorate is characterized by myopic retrospective voting, meaning that the decisions of voters are heavily influence by past economic performance–but only very recently past performance. Bartels also shows that lower-income voters are especially bad at assessing the effects of very recently past economic performance on their economic interests; their behavior at the ballot box is actually more sensitive to how the wealthy have recently fared. Bartels characterizes this as “false consciousness,” but it is probably more fruitfully described as ignorance. As it happens, lower-income voters are also more likely than wealthier voters to vote from the pocketbook. (The salience of “social issues” increases with income.) The problem is that lower-income voters are relatively poor at accurately evaluating the complex relationship between past performance, policy, and their economic welfare.

Bartels argues that, generally, “ordinary citizens fail to translate their broad values and ideological impulses into consistent views about specific policy issues.” In his discussion of the Bush tax cuts, he notes that “those who said they supported more spending on a variety of government programs were more likely to favor the tax cut.” Bartels sensibly adds that “These results suggest a good deal of confusion in the connections between people’s political values and their policy preferences…” And Bartels observes that a voter’s level of political information makes a difference. Poorly-informed voters are less likely to know which party supports which policy. If we add this mix the finding that low-income voters are least likely to be well-informed voters, then it becomes very puzzling indeed how it is that increasing the influence of low-income voters relative to middle- and high-income voters is supposed to improve their fortunes.

Indeed, Bartels himself notes that his analysis points to some “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,” policymakers may be much more generous than the political clout of the poor would seem to warrant.

On its face, almost all the data Bartels brings forth about political knowledge and engagement seems to imply that it is a good thing for the poor that they have so little influence! That is not, I take it, what UD is intended to establish. But doesn’t the argument imply this? And doesn’t this call into question the idea that increasing inequality should be expected to produce the sort of “debilitating feedback cycle” Bartels posits. Indeed, it’s hard to see how such a loop would even get started. If, as Ronald Inglehart finds, people get less materialistic as they get wealthier, and become more motivated to vote according to social conscience rather than economic self-interest, then it would seem that the wealthier a society gets, the more likely will be that the best-informed and most politically influential voters will have the interests of the poor in mind. Wasn’t 2008 the apex of the recent trend in rising income inequality? And didn’t a record proportion of high-income voters choose the avowedly pro-redistribution Democratic presidential candidate that year? I’m pretty uncomfortable with the “white man’s burden” aspects of the idea that it is good for the poor to be democratically underrepresented relative to the rich, but curious to know why Bartels does not address the idea more directly.

As I’ve argued “at length”:http://www.cato.org/pubs/pas/pa640.pdf “elsewhere”:http://www.cato-unbound.org/2009/10/12/will-wilkinson/economic-inequality-and-the-mirage-of-injustice/, inequality is a distraction and the real issue is that of improving the welfare and opportunity of the poor. The real issue is whether policy intended to do this “performs as advertised,” as Bartels puts it. 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. 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, we need policies that will actually work to promote broader prosperity and a fuller realization of basic human capacities. We may want to equalize political voice, but then we need to know what would make that happen, and the democratic public has to vote for it. My worry is that lower-income voters are poorly positioned to act as democratic advocates on their own behalf, and that higher-income voters are more interested in signaling concern for the welfare of the poor (and for the environment, etc.) than in actually getting down to the business of finding out what would really improve it. I suspect that if there were more bona fide concern, there would be much less interest in strong signals, like party affiliation, and much more concern with the ins and outs of policy.

Before I close, I’ll note that there seemed to me a frustrating question-begging air hovering about _Unequal Democracy_. Bartels does argue, and at length, that lower and middle-class Americans fare better economically when a Democrat is in charge of the executive branch of the federal government. The methodological grounds for focusing on the party of presidents rather than on the partisan composition of the legislature remains unclear to me. And the mechanism underlying Bartels’ truly striking correlations remain for me (and I suspect for many others) mysterious. I think this vagueness about mechanism has something to do with why I kept getting the nagging sense reading _Unequal Democracy_ that Bartels cares too little about policy and too much about the Democratic Party. At many points in _Unequal Democracy_, Bartels’ rhetoric leaves the reader with the impression that Democratic policies, whatever they may be, will be tend to be better for the poor and middle-classes than will Republican policies. But Bartels offers surprisingly little discussion of the way specific policy initiatives might help or harm the poor and middle classes.

The chapters of _Unequal Democracy_ that are devoted to specific policies concern the Bush tax cuts, the estate tax, and the minimum wage. But Bartels does little in those chapters to illuminate how it is exactly that increased government revenue or a bump in the minimum wage would actually help. Again, what are the mechanisms? A trillion dollars in tax revenue certainly doesn’t help disadvantaged families in Chicago and Miami when the government squanders it dropping bombs on disadvantaged families in Iraq and Afghanistan. Is the problem really that there is too little money in the system to effectively finance programs that would really help the poor, or is the problem that the money that is in the system is captured and misspent by the various interest groups that make up both parties?

With respect to the minimum wage, Bartels argues that the consensus among economists that wage floors harm the poor has eroded somewhat. (But see “Neumark and Wachser”:http://www.amazon.com/Minimum-Wages-David-Neumark/dp/0262141027/ref=sr_1_1?ie=UTF8&s=books&qid=1263939681&sr=1-1.) Yet in light of the far-from-entirely-eroded professional consensus, it would have been nice to see some evidence that the minimum wage actually helps. Instead, Bartels emphasizes that the issue has considerable “symbolic importance” because the erosion of the real value of the minimum wage “stands as a dramatic example of the American political system’s unresponsiveness to public sentiment.”

Sure, but the American political system was designed to be occasionally unresponsive to public sentiment, and for a number of pretty good reasons. The evidence that the minimum wage is harmful remains at least as strong as the evidence that it isn’t. Suppose it is harmful. In that case, the limited and selective responsiveness of the American political system might look like a feature, not a bug. I think that if one is committed to prioritizing the welfare of the least well-off, given what Bartels tells us about political ignorance and engagement, it will look like a feature. But if one is committed to a certain substantive ideal of democratic equality, it will look like a bug.