American Oligarchy

Apr 25, 2014

When asked to name one idea that would change the world, venture capitalist Tom Perkins responded that wealthy Americans who pay more taxes should get more votes.  Pay a million dollars in taxes, get a million votes.  His audience laughed.  But Tom Perkins, a very wealthy man, wasn’t joking.  The sad fact is that, in a certain respect, his wish has already come true.

A recent study by Professors Martin Gilens and Benjamin Page has confirmed what many people have long felt, namely, that America is more of an oligarchy than a true democracy.  They examined the relationship between U.S. government policy and the preferences of the wealthy elite on the one hand, and the preferences of average citizens and mass-based interest groups on the other hand.  What they found was that “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”  In other words, the wealthy usually get what they want, regardless of what the rest of us want.

            Welcome to the American oligarchy—the rule by the few. No wonder many people don’t vote.

Responding to the study, Manhattan Institute’s Scott Winship wasn’t terribly alarmed.  After all, he claims, the middle-class and upper-class agree three-quarters of the time, so the fact that the wealthiest citizens have more influence isn’t that consequential

In fact, he claims, it’s possible that wealthier and business classes are better informed than middle-class voters, or that wealthier citizens favor better policies.

Let’s consider that for a moment.  Where the wealthy are more likely to disagree with the rest of us is regarding policies that impact their wealth. While the wealthy of both parties tend to agree on such matters, the Republican Party’s policies have been shown to widen economic inequality to a greater degree.  Consider, for example, Representative Paul Ryan’s recent federal budget proposal approved by a majority of House Republicans, including Montana’s Steve Daines.  According to the Center on Budget and Policy Priorities, nearly 70 percent of the non-defense budget cuts over the next ten years—equivalent to $3.3 trillion—would come from programs that serve people of limited means.  For the wealthy, the budget cuts the top tax rate from 35 to 25 percent and eliminates taxes on income such as on interest, dividends, capital gains, and estates.  These and other measures benefiting the wealthy would cost us $5 trillion in revenue that could more than maintain the social safety net that the budget cuts.

The upshot is that political inequality worsens economic inequality.  A study commissioned by the New York Times just concluded that the American middle class is no longer the most affluent in the world.  America’s poor are now worse off than Europe’s, but America’s wealthy are outpacing most of the rich elsewhere.  The top 10 percent wealthiest Americans took home over half of the income in 2012, the highest level in recorded history. 

There is, arguably, no more fundamental problem facing American society than our shift toward oligarchy.  What’s good for the wealthy is not always what’s good for the rest of us.  So what can we do?

First, protect the vote.  Efforts are underway across the country to throw up roadblocks to voter registration where no evidence of fraud exists.  Such obstacles usually most disadvantage the poor.

Second, vote.  Look for candidates who promote fairness over privilege.  Be wary of claims of fiscal responsibility that actually pad the pockets of the 1 percent.  Look for a greater diversity of economic backgrounds among our representatives.  The median net worth of members of the U.S. House and Senate is now over $1 million.  Support bold measures that get money out of politics and promote equality and equal representation.

Finally, stand up for equality whenever you can.  Contact your representatives and express moral outrage.  This isn’t about class war or envy.  It’s about being shut out of a government that was founded to be a representative democracy, whose legislators, according to James Madison, were to exercise wise judgment on behalf of the good of the whole country.  It’s about the morally obscene results of policies that favor the rich while enhancing the suffering of the poor.

In light of the Gilens and Page study, resignation and cynicism come easily.  Hope, however, lies in the fact that sometimes, the majority prevails—but only if we elect those who weight our interests equally.

This is Mark Hanson, guest commentator for the Mansfield Program in Ethics and Public Affairs at the University of Montana.