The Democratic Case for Tackling Economic Inequality
Crosspost from Balkinization
I share the assessment of the eminent legal scholars writing in The Constitution in 2020 that constitutional law and the judiciary offer limited promise as means of remedying the economic inequality and insecurity that are so much a part of contemporary America. But it will not do, I think, to end the assessment there. In the fraught history of social rights that William Forbath tells, there is also a larger moral about the kinds of appeals that such a movement must make if it is to succeed. The moral is that these appeals have to be grounded in an articulated vision of citizenship that makes clear why widespread economic inequality and insecurity is so starkly at odds with political equality.
This a deeply American way of approaching the problem—far more so than the idea of positive rights—and it has a long and distinguished lineage in democratic thought. Indeed, for centuries, the dominant assessment of the problem of economic distribution in a democracy saw the concentration of property and power at the top of the economic pyramid as dangerous to democracy precisely because it raised the prospect of a wealthy oligarchy corrupting political institutions.
During the Founding period, the concern that the wealthy would gain undue influence coexisted with the well-documented worries about the tyranny of the propertyless majority. The Founders saw the new American republic as marked by a highly favorable starting point: a distribution of property much broader than that found in the class-bound Old World. And they were convinced that preservation of this broad distribution was not just good in itself but essential to the institutional functioning of democracy. To be sure, they feared challenges to private property from below, but they also feared the rise of an aristocracy, which they believed just as fatal to an independent democratic republic.
New life was breathed into this perspective during the Jacksonian era (“the rich and powerful too often bend the acts of government to their selfish purposes” remain the most remembered words of Jackson veto of the national bank). Yet it rose to its greatest prominence during the Progressive Era. Progressives were alarmed about the growing concentration of wealth and income and the increasingly evident social costs of industrialization. What worried them most, however, was the distortion of politics by private economic power, the translation of economic inequality into political inequality, which in turn reinforced economic inequality. Vast excesses of wealth meant vast excesses of power, a reality directly at odds with the promise of political equality.
Running as a third-party candidate in 1912, Theodore Roosevelt summed up the critique in a famous broadside against “special interests”:
The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and the not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they themselves have brought into being….The absence of effective state, and, especially, national restraint upon unfair money getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.
The next Roosevelt in the Oval Office, facing down the greatest economic crisis the nation had ever seen, put the point even more sharply:
For too many of us the political equality we once had was meaningless in the face of economic inequality. A small group had concentrated in their own hands an almost complete control over other people’s property; other people’s money; other people’s labor—other people’s lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.
Against economic tyranny such as this, the American citizen could appeal only to the organized power of government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people’s mandate to end it. Under that mandate it is being ended.
The Progressive critique was rooted in the classical republican view, but also gained power from the rise of legal realism, as Cass Sunstein and others have noted. Legal realism insisted, rightly, that markets are inevitably shaped and channeled by political forces, dependent on the rules that are set up and enforced by those who control the coercive power of the state. And the legal realists also rightly argued that walling markets off completely from redistributive and regulatory demands required at least as strenuous an exercise of government power as intervening in them. Laissez-faire is a political choice, one with distinct and sometimes unpleasant consequences, and one that requires a great deal of government intervention to arise and survive.
Lest this critique be seen as deeply radical in spirit, it is worth quoting a little-noticed passage in Adam Smith’s 1776 The Wealth of Nations, now viewed as the bible of limited-government free-market economics. “Wherever there is great property,” Smith wrote, “there is great inequality. Civil government, so far as it is instituted for the security of property, is in reality, instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” A clearer statement of the legal-realist view of a century and a half later would be hard to find.
The fact that markets are constructed through public policies and shaped by democratic politics—and therefore that they could be reshaped to produce better outcomes—was a central observation of progressive reformers in the early twentieth century. It should also be a central argument of today’s progressives. So it is important to understand what it means and does not mean. It does not mean that democratic politics always produces well-functioning markets, or that government intervention is always justified or desirable. Rather, it is a more fundamental point. For good or ill, democratic politics makes markets. The debate over good or bad economic policies should not be over whether government is involved, for it always is. The debate should be over whether it is involved in a way conductive to a good society.
For the Progressives, the answer to that question in the early twentieth century was no, as it should be for progressives today. Policies passed in the name of free markets and justified with reference to the sanctity of private property had the effect of creating markets that were mainly in the interests of a narrow economic elite. Efforts to address these inequities were blocked in legislatures highly attentive to business concerns. Where laws promoting social reform were passed, they were thrown out by the courts. Greater economic inequality led to greater political inequality, which in turn led to government policies that reflected the interests of those at the top, worsening or at least hardening class divisions. Swamped by the tides of inequality and insecurity, democracy was giving way to oligarchy—the very concern that the recent dramatic growth in inequality and our present economic crisis have cast in stark relief.
The implication, hopefully obvious by now, is that efforts to reduce inequality can be justified not just on egalitarian grounds, but also on democratic grounds. As the political scientist Sidney Verba has written, democracy is based on the ideal of equal potential consideration of every citizen’s interests. In theory, this ideal is compatible with vast inequalities in other spheres of social life. Even the poorest citizen has the formal right to vote, after all. The problems arise when large and growing resource inequalities translate into substantial, cumulative, and self-reinforcing inequalities of political power. Sadly, these sorts of political inequalities have become increasingly apparent in American democratic practice.
This is not the place to lay out all the reasons for my concerns. Instead, I will merely refer readers to the work of the American Political Science Association’s Task Force on Inequality and American Democracy, of which I was part. The Task Force considered the effects of growing economic inequality on democratic practice from a variety of perspectives and drawing on a huge range of cutting-edge research. Its conclusion was that growing inequality did indeed threaten political equality in the United States:
Generations of Americans have worked to equalize citizen voice across lines of income, race, and gender. Today, however, the voices of American citizens are raised and heard unequally. The privileged participate more than others and are increasingly well organized to press their demands on government. Public officials, in turn, are much more responsive to the privileged than to average citizens and the least affluent. Citizens with lower or moderate incomes speak with a whisper that is lost on the ears of inattentive government officials, while the advantaged roar with a clarity and consistency that policy-makers readily hear and routinely follow.
What we have, in short, is a classic story of cumulative advantages—people who have more are being heard more by political leaders, and what government does reflects that. The political scientists Larry Bartels and Martin Gilens have found, for instance, that the votes of elected representatives and the direction of public policy are both vastly more responsive to the opinions of high-income citizens (as measured by surveys) than they are to the opinions of Americans of more modest means.
In sum, we should challenge the stark economic disparities of our day not just because they challenge our moral sensibilities, but because they pose a direct threat to political equality. And we should also challenge them because, contrary to the anti-government rhetoric of the last generation, public measures to expand economic equality and security can materially improve the quality of democratic citizenship. Indeed, as the Task Force on Inequality and American Democracy reports, some of the most vibrant examples of twentieth-century American public policy—the GI Bill, support for collective bargaining between management and unions, Social Security—were successful not just in reducing economic inequality, but also in empowering citizens. By providing Americans across the income spectrum with resources, skills, and motives for democratic citizenship, each of these policies substantially evened out disparities of participation and influence in American politics, helping to reinforce the broad-based character of postwar prosperity.
We would do well to embrace this goal again today.
Jacob Hacker is the Stanley B. Resor Professor of Political Science at Yale University and a Resident Fellow at the Institution for Social and Policy Studies. He will be appearing on Saturday's "Social Rights" panel with Risa Goluboff (University of Virginia School of Law, "Social Rights") and Benjamin Sachs (Harvard Law School, "Locating Union Rights").