Thomas Edsall in a NYT op-ed lays out the several current theories about the failure of democratic governments to deal with the problem of economic inequality. There is the Piketty theory that traditional parties of the left no longer represent the working and lower middle classes, and that constituencies that feel unrepresented by this new partisan configuration will be drawn to populism:
“In a recent Power Point presentation, “Brahmin Left vs Merchant Right,” Piketty documents how the domination of the Democratic Party here (and of socialist parties in France) by voters without college or university degrees came to an end over the period from 1948 to 2017. Both parties are now led by highly educated voters whose interests are markedly different from those in the working class. The result, Piketty argues, is a political system that pits two top-down coalitions against each other.”
Edsall also cites Adam Bonica, a political scientist at Stanford, who argued that “inequality should be at least partially self-correcting in a democracy” as “increased inequality leads the median voter to demand more redistribution.” It has not worked that way because:
“First, growing bipartisan acceptance of the tenets of free market capitalism. Second, immigration and low turnout among the poor resulting in an increasingly affluent median voter. Third, “rising real income and wealth has made a larger fraction of the population less attracted to turning to government for social insurance.” Fourth, the rich escalated their use of money to influence policy through campaign contributions, lobbying and other mechanisms. And finally, the political process has been distorted by polarization and gerrymandering in ways that “reduce the accountability of elected officials to the majority.”
Other analysts (Edsall quotes Daron Acemoglu, an economist at M.I.T.) emphasize the role of racial hostility, the adverse effects of globalization on white manufacturing workers, and the decline in social mobility as more explanatory than Piketty’s economic analysis. And there is a constituency (Dean Baker, co-founder of the Center for Economic and Policy Research) who argue that correcting inequality requires adoption of a much broader policy agenda than Piketty’s recommended redistributive “tax and transfer” strategy. Baker calls for radical reform of exchange rates, of monetary policy, of intellectual property rights and of the financial sector as well as reform of the institutional protection of doctors, dentists, and lawyers and of corporate governance rules.
Read the article!