By Pete Davis
i. The economic inequality crisis in the spotlight
The crisis of economic inequality has reached the center of Democratic Party politics. The recession, the Occupy movement, Elizabeth Warren’s popularity, strikes for higher wages at fast food restaurants, the reception of Thomas Piketty’s Capital in the 21st Century, and now the Presidential campaign of Bernie Sanders have together, step by step, put it there. Even Republicans are starting to listen, thanks in part to Robert Putnam’s recent book Our Kids, which frames the problem of economic inequality in conservative–friendly terms: not as a problem of suffering adults, but rather as a dangerous opportunity gap for America’s children.
Diverse descriptions of this crisis of economic inequality abound. Some describe it in terms of income inequality (emphasizing wage stagnation and CEO pay); others in terms of wealth inequality (emphasizing large inheritances and capital gains); and the most visionary thinkers on the subject, such as Roberto Unger and Gar Alperovitz, speak in terms of structural inequality (emphasizing the undemocratic structure of most economic firms and markets). Yet, implicit in most descriptions is a shared premise that solutions to the crisis will necessitate government action. True, the project of lessening America’s economic power disparity can be partially forwarded by non-state actors—the CEO who voluntarily raises worker pay, the billionaire who donates most of his wealth, the union organizer who reinvigorates unionization within an industry, or the new business school set up for training entrepreneurs interested in launching worker cooperatives. However, the enormity of this power disparity is going to require the participation of a much more powerful actor: the government. Take the major proposals for better distributing economic power: raising the minimum wage, allowing card check unionization, equalizing public school quality, funding the broadening of higher education access, taxing capital gains equal to income, increasing the estate tax, providing for the health security required for economic risk-taking. All these proposals necessitate state action.
This shared premise — that the state should play a role in addressing economic power disparities — is an echo of the basic idea that came out of Theodore Roosevelt’s New Nationalism proposals of the early 1900’s. The idea was that economic power runs its course by a certain set of rules and logic that support certain interests (e.g., those with more wealth are in charge; one has the liberty to arrange, rearrange and withdrawal personal capital to achieve personal goals), but that state power can be deployed under a different set of rules and logic that counterbalance economic power by supporting different interests (e.g. citizens, regardless of their wealth, are collectively in charge; you have the freedom to form coalitions that can pressure the state to deploy its power for your public goals). President Obama explained the idea succinctly in his 2011 speech in Osawatomie, Kansas, the same location where Roosevelt had given his New Nationalism speech a century earlier:
“At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: Would we settle for a country where most of the new railroads and factories were being controlled by a few giant monopolies that kept prices high and wages low? Would we allow our citizens and even our children to work ungodly hours in conditions that were unsafe and unsanitary? Would we restrict education to the privileged few? Because there were people who thought massive inequality and exploitation of people was just the price you pay for progress.
Theodore Roosevelt disagreed… [he] knew that the free market has never been a free license to take whatever you can from whomever you can. He understood the free market only works when there are rules of the road that ensure competition is fair and open and honest. And so he busted up monopolies, forcing those companies to compete for consumers with better services and better prices. And today, they still must. He fought to make sure businesses couldn’t profit by exploiting children or selling food or medicine that wasn’t safe. And today, they still can’t…
…Now, for this, Roosevelt was called a radical. He was called a socialist, even a communist. But today, we are a richer nation and a stronger democracy because of what he fought for in his last campaign: an eight-hour work day and a minimum wage for women, insurance for the unemployed and for the elderly, and those with disabilities; political reform and a progressive income tax.”
Indeed, in this Second Gilded Age of today, the fighting spirit of the First Gilded Age’s most notable foe is back.
ii. The political inequality crisis sidelined
Although the same sentiments are expressed, President Obama and his fellow “New New Nationalists” have echoed only half of Roosevelt’s program. They have failed to articulate the role political equality plays in achieving economic equality. The progressives of the First Gilded Age understood that if they wanted the New Nationalism to work — if they wanted state power to be able to occasionally counterbalance free-wheeling economic power — they had to ensure that state power was free from the control of economic power. They had to fight for state power to be deployed democratically, in the interest of the public sentiment of equal citizens.
In the Gilded Age that Roosevelt faced, state power was not deployed democratically. In practice, there was not an equal distribution of political power. Worse, the disparity in political power mapped on to the disparity in economic power, so that those with economic power had political power and those without economic power did not have political power. The government was not in the control of the People; rather, it was controlled by those with the economic power. Our nation — conceived as a democracy of citizens with equal political power — suffered a crisis of immeasurable political inequality.
Roosevelt understood that political inequality and economic inequality go hand in hand, devoting paragraphs in his Osawatomie speech to his era’s crisis of political inequality:
“…Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit…
…There can be no effective control of corporations while their political activity remains…
…The duty of Congress is to provide a method by which the interest of the whole people shall be all that receives consideration…”
A century later, we face a similar crisis of political inequality.
The crisis is well documented: The most concise study is a 2014 article by Martin Gilens and Benjamin Page in the American Political Science Association’s Perspectives on Politics journal, in which they find, using multivariate analysis on a dataset of 1,779 policy issues, that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.” In an earlier study from 2005 — “Inequality and Democratic Responsiveness” published in Public Opinion Quarterly — Gilens also found that “when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of poor or middle-income Americans.
To zoom in on one corner of the crisis, you can turn to the recent work of creative legal scholar and former presidential candidate) Lawrence Lessig, who spent years spotlighting a major mechanism through which today’s political inequality is exacerbated: the structure of our campaign finance system. Lessig shows that before any Congressional candidate campaigns for votes, she must campaign for the money that pays for the ads and materials she will use to win votes. You can think of these as two separate elections she has to win: the money election and then the ballot election. If she wins the money election, the ballot election is easier; if she loses the money election, it’s an uphill battle to win the ballot election.
Here’s the problem with this structure: although the ballot election is as close to a purely democratic institution as one can get (one person gets one vote), the money election is dominated by those with economic power. As Americans for Campaign Reform explains, less than 1% of Americans ‘cast’ 80% of the ‘votes’ (read: dollars donated) in the money election; large donors (giving $2300 or more) cast 64% of the ‘votes’; men cast 71% of the ‘votes’; and those from predominantly white zip codes ‘cast’ 90% of the ‘votes’. In 2008, 96% of Americans did not even donate a single dollar to a candidate—i.e. they did not even ‘vote’ in this money election. The result, as one might expect, is politicians spending most of the money election campaigning for the donations of the small group of people who have the economic power to easily donate to them. Outside of election season, elected officials seriously consider the preferences of such donors when deciding whether to introduce, support or oppose legislation. Those without a voice in the money election — chiefly those without the excess economic power to spend on campaign donations — are ignored.
Lessig understands our time in a way that Roosevelt understood his. They key issues are (1) access to economic power is drastically unequal in this country; (2) we have a powerful tool — the government — to help balance this economic power disparity; but (3) political power is drastically unequal in this country. Like it had been a century ago, our tool of public action has been infested and corroded by money. So Lessig asks, as Roosevelt did before, why do we expect the crisis of economic inequality to be addressed if our major tool to address it is not in our control? Why do we expect the crisis of economic inequality to be addressed if our major tool to address it is in the control of those benefiting from our present economic power gap? Why are we surprised that those benefiting from our present economic power gap and in control of the only tool that can address it are attempting to weaken the power of that tool?
Or, to put it simply: why do we expect the crisis of economic inequality to be addressed without addressing the crisis of political inequality?
iii. Political equality first
Unlike Lessig, most of today’s economic progressives have failed to take seriously this connection between closing the economic power gap and closing the political power gap— between economic opportunity and equal citizenship. In Obama’s Osawatomie speech, which ran almost an hour long, he devoted only three sentences to themes of political equality:
“Inequality also distorts our democracy. It gives an outsized voice to the few who can afford high-priced lobbyists and unlimited campaign contributions, and it runs the risk of selling out our democracy to the highest bidder. It leaves everyone else rightly suspicious that the system in Washington is rigged against them, that our elected representatives aren’t looking out for the interests of most Americans.”
Compare this to Roosevelt’s speech, which he peppered with almost as many proposals for increasing political equality as he included for increasing economic inequality:
“…Now, this means that our government, National and State, must be freed from the sinister influence or control of special interests…
…For every special interest is entitled to justice, but not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation…
…It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes…
…It is particularly important that all moneys received or expended for campaign purposes should be publicly accounted for, not only after election, but before election as well…
…I believe that every national officer, elected or appointed, should be forbidden to perform any service or receive any compensation, directly or indirectly, from interstate corporations; and a similar provision could not fail to be useful within the States.”
He even went beyond basic ‘clean government’ proposals and advocated for reforms that provide for more open, responsive, and vigorous democracy in general:
“We need to make our political representatives more quickly and sensitively responsive to the people whose servants they are. More direct action by the people in their own affairs under proper safeguards is vitally necessary. The direct primary is a step in this direction… Political action must be made simpler, easier, and freer from confusion for every citizen…”
Today, with the crisis of economic inequality in the spotlight, but the crisis of political inequality sidelined, we must finally address this second strand of Roosevelt’s New Nationalism and give the cause of political equality its due. Even more, we should call for Political Equality First: the strategic prioritization of equalizing our distribution of political power. If we want to use state power to better achieve income equality, wealth equality, or structural equality — or even gender equality or racial equality — we need political equality first. We need to wrest back control of state power from those with economic power.
Practicing a strategy of Political Equality First comes with important benefits. Whereas a sizable portion of Americans are — rightly or wrongly (in my view, wrongly) — philosophically opposed to efforts to increase economic equality, most Americans believe in the democratic principle of political equality. Political equality takes the relatively popular sentiment of “the rich deserve their economic power” off the table and centers focus on the even more popular sentiment of “the citizens deserve their political power.” Whereas most efforts to increase economic equality will immediately affect the direct experiences of only a segment of Americans, the 90+% of Americans who have little to no voice in government would — given efforts to increase political equality — immediately experience increased political power.
How can we achieve political equality? For now, we can start by supporting proposals to address campaign finance inequality, such as Lessig’s Democracy Vouchers idea. The idea is to (1) give every citizen a $100 voucher that they can use to donate to candidates; and (2) limit campaign donations to the vouchers. In terms of the principle of “equal votes for equal citizens,” this makes the money election equivalent to the ballot election. When a candidate wants to raise money, it is just as useful to go to the poor side of town as it is to go to the rich side of town. When an elected official is voting for a bill based on how it will affect campaign contributions, she’s thinking about all of her constituents, because she can receive just as much money from any one constituent as any other. This plan would be one step in the direction towards political equality: towards returning state power to the hands of the people, under a different rules and logic than economic power.
Political equality is not a visceral issue: no one has been shot, imprisoned, malnourished or starved directly because of relatively unequal access to state power. It is perhaps not the most important issue to any of us either: some may care about #BlackLivesMatters’ racial justice proposals or Bill McKibben’s environmentalist proposals or, as outlined above, the economic equality proposals of Occupy, Piketty, Warren, or Sanders much more than they care about tinkering with our political institutions. But Political Equality must be the first issue. It is what we must achieve before we can achieve anything else that necessitates significant state action in the public interest.
Not ten years ago, it must have seemed hopeless to bring the crisis of economic inequality to the center of Democratic Party politics. Today, it has arrived. We must do the same for the crisis of political inequality, ending our neglect of the second facet of our revived New Nationalism. If we succeed, we can better achieve what Roosevelt called the meaning of “this great Republic”: “the triumph of a real democracy, the triumph of popular government, and, in the long run, of an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him.”
This piece was originally published at ProgressiveAlternative.org, an online magazine devoted to restoring the integrity and broadening the vision of the Democratic Party.