For those on the right, inequality is a nonissue because gaps between the top and the bottom only serve to incentivize those at the bottom to work harder. That is, after all, how market economies work. For those on the left, inequality only illustrates how the wealthy have stolen from the poor, for which the only real answer is punitive redistribution. Unfortunately, both miss the point. Inequality is a serious issue because it truly threatens democracy. And, yet, one would not know this from the language of Democrats in Congress or running for president.
For Democrats, our democracy is only threatened when a foreign government interferes in our elections by nothing other than releasing information into the public domain that might affect the choices of voters. Even this is only a threat to democracy when it can be used to mobilize bias for the purpose of deligitimizing the other side. But the real threat to democracy is the resistance and politics of diversion that obscures serious economic issues. Inequality has become a bromide and campaign slogan, but it is also the real threat to our democracy.
Let’s talk about the threat that nobody is talking about. First of all, democratic theory assumes a society of free, equal, and autonomous individuals. On a basic level, this means each individual is equal before the law, has the same vote as other individuals, the same rights to express one’s self in the political sphere, and most importantly the same potential to influence what government does. All citizens, then, are said to have the same access to governing institutions. By this understanding, money should be irrelevant to one’s standing, because both rich and poor alike are equal before government.
Although democracy promotes self-development by affording people the opportunity to be autonomous, as well as to have voice in the political process, such voice is meaningless if their personal autonomy is undermined because those at the bottom find themselves dependent on others, and therefore subject to exploitation. The personal autonomy that democracy requires means that there can be no domination.
This requirement, then, adds yet another dimension to democracy in America. American political culture and its constitutional system are predicated on republican political philosophy which stressed the goal of political virtue and that government would place the public good above individual interests. In this vein, republicanism needs to be understood as a doctrine of non-domination — that truly free individuals are not subject to domination. Rather being dominated involves occupying a position where one can interfere in one’s life on an arbitrary basis. On the contrary, domination involves a relationship between people and restricts choice through the effects it has on the person who is being dominated.
To be free means that one is not in any way subject to the arbitrary whims of another. The republican tradition casts freedom as the opposite of slavery. A slave, by contrast, is subject to the arbitrary will of the master. For the republican tradition, then, freedom as non-domination is indeed a supreme political value. Therefore, freedom as non-domination requires reducing the capacities for arbitrary interference in which a person may be exposed. If republican liberty as non-domination is to be successfully secured in the modern state, those values and virtues that support this conception need to be secured through its political institutions. Inequality, however, threatens this.
On an individual level, unequal distribution of wealth and income can adversely affect an individual’s ability to participate in the democratic process on the same footing as equals. This can lead to procedural inequality to the extent that those lacking in wealth and income may not enjoy the same access to political and policy officials as those who possess wealth and income. With greater concentration of wealth at the top, those at the top are in a better position to use their wealth toward the attainment of their political and other ideological objectives.
Those at the top of the distribution often enjoy inordinate power and are able to not only limit redistribution, but shape the rules of the game in favor of those with more resources. Studies already show legislative bodies to be more responsive to affluent constituents than non-affluent constituents. Democracy requires a measure of trust between people, but growing income inequality threatens trust, when various groups, mainly those at the bottom, experience political alienation and perceive the system not to be fair.
A trusting population tends to be more cooperative, and governments with trusting populations tend to be less corrupt and function with less conflict and greater responsiveness. And yet, a market economy based on capitalism is by definition one of control. Workers are effectively exploited by their employers precisely because of an asymmetrical power imbalance between them.
Because workers don’t have the means to live without being dependent on others for income through work, they are forced to conform to the dictates of those who control their employment situations or face the uncertainty that comes with unemployment and eventual poverty. Therefore, as income inequality increases, those at the bottom of the distribution become more dependent and ultimately more vulnerable. Consequently, their rights as workers also diminish.
The wider the gap between the top and the bottom, the more vulnerable are those at the bottom. With more wealth concentrated at the top, the better positioned they are to get policy favorable to their interests and damaging to those at the bottom. In short, those at the top can use the apparatus of the state to exploit those at the bottom, with few protections for those at the bottom because the political system has effectively become completely unresponsive to them.
Democracy requires a broad middle class, but rising inequality signals the decline of the middle class. Although Democratic party elites seeking to divert attention from the real issues want to decry so-called foreign interference in our democracy, the real threat to our democracy comes from within. That is, our democracy is threatened by a neoliberal orthodoxy that has resulted in greater globalization at a cost to American workers, and it is threatened by the increase in income inequality that has resulted.
Why is there not any real discussion, especially by our Democratic party elites? Because they are very much part of the problem, whose good fortune rests on the exploitation of those at the bottom. Surely, stronger labor market institutions will help. More importantly, there needs to be a willingness to confront the real threat to democracy. No rise in stock prices is going to change that, but neither will continued investigations and the politics of diversion..