The fact is that income inequality is real; it’s been rising for more than 25 years. The reason is clear: We have an economy that increasingly rewards education, and skills because of that education. One recent study of male earnings showed that someone with a college degree earns about 72 percent more than someone with a high school diploma. The earnings gap is now twice as wide as it was in 1980 — and it continues to grow. And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down. The key to rising in this economy is skills — and the government’s job is to make sure we have an education system that delivers them.
The president is wrong. Rising inequality is not primarily motivated by the certification gap or the skills gap, but by the regular application of policies making the intergenerational transfer of wealth easier to accomplish. But even if there are multiple causes, the results are untenable for democracy. Here’s why.
The question isn’t buying power; it doesn’t matter whether you can buy seven widgets or seventy or seven hundred thousand… the question is: how does income inequity effect the distribution of public goods? Not widgets, not cars or computers or kitchen cabinets, but the Goods: justice, beauty, excellence, etc., which we now call by other names: the rule of law, innovation, wisdom.
Certainly wealthy democracies are better at distributing necessities than wealthy tyrannies or oligarchies, but supplying food and medicine, the means of survival, is the least of the public goods. Democracies in general are better at supplying the true Goods, but their capacity to do so depends not on what they are called, but how they function.
If public office is available only to the rich, if connections get you farther than ambition or intelligence, if policies follow the dictates of the few rather than the good of all, then your so-called democracy is a lie. Growing income inequality produces hereditary, unearned wealth in the next generation, which rewards indolence and affectation. Slowly, the regime becomes despotic, the law is corrupted, the artists and engineers flee for freer places, and wisdom must again hide from the tyranny of public opinion and prejudice.
The problem is that democracy is not exactly equivalent to voting for representatives. The USSR had elections, as do many messy African dictatorships, but no one seriously considers them democracies. Even the most reductive account of democracy requires: a) multi-party elections, b) free speech and a public sphere in which to practice it, c) roughly equal access to offices and honors, and d) an uncorrupted judiciary and administrative state. The US has all of these to a larger degree than many other places in the world, but we’re far from leaders in the field. As relative income inequality increases, the judiciary becomes more easily corrupted, most offices of consequence become increasingly inaccessible to the least advantaged members of society, and ultimately the public sphere becomes fully inaccessible to those without the resources to make themselves heard.
In the US, there are multiple parties, but it remains to be seen whether the party architecture is capable of making real changes to the political economy. I’ve got my eye on the inheritance tax, myself; I doubt Clinton or Obama would be more likely to reinstate the ‘death tax’ than their Republican fellows. Truly bodacious quantities of capital are concentrated in relatively few hands, and it’s those families that will oppose any effort to reinstate the tax.
When I say income inequality is bad FOR DEMOCRACY, I’m saying something that is formally true, for reasons having to do with the conceptual relationship between freedom, governing, and necessity. It’s like saying “Circles are round,” or “No bachelor is married:” it’s a conclusion that can be reached a priori, from an analysis of the relevant concepts.
Here’s how the analysis looks: I am not free to make a decision if I am forced to do it by necessity; the two concepts are contradictory. Consider the ‘happy slave,’ who claims that he always happens to want to do what his master orders him to do: is he free? Metaphysically, maybe… but in all the relevant political senses he’s still a slave. If I owe my subsistence to another human being, I cannot claim to be free to participate in self-rule. Instead, I can only cast my vote or speak my mind as necessity demands.
This argument has previously been used AGAINST democracy, of course, but conditions currently prevail in many Western countries that allow citizens to act and speak freely because they are not indebted to other citizens, but rather to institutions like corporations, universities, non-profits, or the state itself. These inhuman accumulations of capital don’t shackle our freedom in the same way as another human being would, though their involvement in our lives does militate in favor of mercantile and entrepreneurial values as opposed to, say, pastoral or feudal ones.
Unless you grew up indolently and independently wealthy, your own experience will bear this out. Corporations don’t dominate us or foreclose our potential for political freedom: our bosses do, even if it’s some nameless, faceless boss at ‘headquarters’ or ‘the main office.’ As such, it might just feel like a sort of impersonal domination, but the corporate system also prevents these ‘bosses’ from dominating employees in an inefficient manner. Even bosses are ruled by the bottom line, but all the ‘bottom line’ demands of us is that we preserve the rule of law and foster innovation. On the other hand, when families or individuals are able to control institutional magnitudes of wealth, they’re not really hampered by concerns about efficiency or freedom, and that’s a serious problem. It reintroduces domination and unwarranted privilege into the system; we become, at best, happy slaves.
Now, I’m obviously not suggesting a communist revolution, but that doesn’t mean we have to deny that there’s a problem. In fact, the intellectually honest thing to do here is to say: “There is a problem and we don’t know how to solve it, except that all of our old methods seem to be failing.”