Will Inequality Lead to Illegitimacy?
The threat of plutocratic populism to American democracy.
American politicians are fond of quoting the Declaration of Independence. Equality, unalienable rights, life, liberty, the pursuit of happiness—you know the drill.
But the line right after the famous one, while less quoted, is no less important: “To secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”
That claim, like the one about all men being created equal, seems obvious to most Americans today. Even the world’s worst despots generally try to couch their regimes in language about popular support. But it wasn’t always obvious. Even during John Locke’s lifetime, modern Europeans—having already largely abandoned the idea of divine right—still had to balance the interests of “the people” writ large against those of both the aristocracy and the king.
But small-d democracy has marched on. In the 1830s, Alexis de Tocqueville wrote that the “great democratic revolution” was “irresistible”:
“The gradual development of the equality of conditions is … a providential fact, and it possesses all the characteristics of a divine decree: it is universal, it is durable, it constantly eludes all human interference, and all events as well as all men contribute to its progress.”
The democratization Tocqueville saw at work in America played out in an unusual way. “Among the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of conditions,” he wrote in the first line of his book. In other words, democracy took root in America in a society far more equal than that of Europe. In contrast, Tocqueville’s native France was long roiled by bitter conflict between the descendants of the old aristocracy and the descendants of commoners. America had material wealth and chattel slavery, but it also had a wealth of social mobility that the Old World lacked.
Tocqueville’s words proved to be prophetic. When he was writing, only white men could vote in the United States. Since then, democracy has expanded to more and more people—both in America and around the world—and the United States has become stronger and more prosperous.
Still, his confident proclamations can strike contemporary ears as naive. Although the January 6 rioters failed in their attempt at election subversion and are being prosecuted and investigated, the legitimacy of our democracy often feels more threatened today than it has in decades, if not longer—and we may be experiencing some of the same pressures of low social mobility and high inequality that affected Europe in the 19th century.
Political scientists Jacob Hacker and Paul Pierson have been studying the relationship between inequality and democracy for decades and have written three books together, most recently Let Them Eat Tweets: How the Right Rules in an Age of Extreme Inequality. They argue that in times of inequality, democratization and conservatism can have an uneasy relationship defined by “plutocratic populism.”
“The basic issue is, if you’re a country that’s becoming [more] democratic but is highly unequal, and your [conservative] party has traditionally been aligned with the higher economic groups, then you face a big challenge, because on economic issues you’re likely vulnerable,” Pierson told The Dispatch. “… The conservative party is going to try to compete on economic issues, and sometimes they can do that reasonably successfully, but most of the time they’re going to be kind of outbid by the party that’s more open to more redistribution. And so what they want to do is to introduce what political scientists call a second dimension to politics, a non-economic dimension, and that can take different forms in different countries.”
Of course, it’s Political Science 101 to say that politics has both economic and social dimensions—hence the four-quadrant graphs you’ve likely seen ad nauseum. But conservative parties trying to maintain both popular and plutocratic support face a particular dilemma. “People can compromise over economics,” Pierson said. “It’s a lot harder to compromise over religion, or over race. And so, if you amp up those kinds of elements of politics, there is a danger that it’s kind of like opening Pandora’s box, and it can get out of control.”
Conservative coalitions of the past have navigated this treacherous terrain with varying degrees of success. Pierson pointed to the work of Daniel Ziblatt, who argues that in the 19th and early 20th centuries, the Conservative Party in the U.K. was able to thread the populism/plutocracy needle more or less successfully. Germany was not.
“One really important factor that prevented the regime [of the Weimar Republic] from stabilizing was the inability of the conservative party to bind all of the right-wing forces to the regime,” Ziblatt toldThe Atlantic in 2017. In contrast, “the Conservative Party [in the U.K.], because it was a well-organized political party, thrived in the face of democratic changes.”
Pierson and Hacker argue that, as inequality and polarization have both increased over the last 30 years, plutocratic populism has come to define the Republican Party, giving it nondemocratic incentives it didn’t used to have. And those incentives are exacerbated by the electoral advantages afforded to the GOP through the Electoral College and the Senate.
Pierson emphasized that this is not a conspiracy—there’s no group of rich folks in a back room turning a racial resentment dial or typing up messaging bills to make sure they can cut their own taxes. Riling up the base about social issues isn’t necessarily the task of the party itself; a lot of it is left to outside groups like Fox News or the NRA. Those groups, and the base voters they interact with, may be totally sincere in their beliefs. But more often than not, they end up paving the way for more tax cuts, not serious legislation on guns, abortion, affirmative action, or other non-economic issues. The Tax Cuts and Jobs Act, for example, was the main Republican legislative accomplishment when the party had unified control of Congress and the White House during the first two years of the Trump presidency.
“Why does a major political party advance policies that are quite unpopular?” Pierson asked rhetorically. “… It’s pretty clear, I think, in polling, that most voters are not really at all excited about big tax cuts for high-income people and for businesses—on the contrary, they’d actually like to see their taxes go up—and that’s been true pretty steadily as far back as I’ve looked, so it’s puzzling.”
Conservative economists have made the case that the much-lamented rise in inequality that underlies Hacker and Pierson’s argument is just as much a function of changes in how we measure inequality than changes in the structure of the economy itself. (Our own Scott Lincicome reviewed the recent literature on this topic in a recent Capitolism.) And regardless of how big a deal inequality is, it’s not necessarily top of mind—voters don’t like it, but they mostly just want the economy to be doing well.
“When a lot of people complain about inequality, they’re really upset about how their own family is doing on an absolute level rather than a relative level,” Manhattan Institute senior fellow Brian Riedl told The Dispatch. “… There have been a lot of studies that have shown that people get more upset about inequality when the absolute level of wage growth is slow regardless of what’s happening relatively.”
Riedl also said recent GOP tax cuts have appeared more plutocratic than they really were. Republicans have been the party of small government and tax cuts since the Reagan era, and while that may be changing now, the mindset that tax cuts are always good is ingrained in a lot of GOP lawmakers.
“Republicans reflexively say ‘let's cut taxes,’” Riedl said. “And then when they actually design the tax cut bill, it ends up looking like a tax cut for the rich—not because Republicans love rich people, but because they're the only people who are left paying taxes for anyone to cut. And that’s what happened in 2017, and that’s why the TCJA wasn’t as popular.”
Yuval Levin, director of social, cultural, and constitutional studies at the American Enterprise Institute, concurs. “The Republicans ended up advancing only a tax cut in the Trump years because they came into that period having spent a generation and more making the argument that tax cuts advanced growth. They believe it, and there’s truth to it, too. It’s basically true. … But they’ve made this argument to the exclusion of almost every other argument about economics and society.”
Levin, Riedl, and Pierson all agree that the GOP is becoming more populist more quickly than many people realize. That doesn’t mean the Chamber of Commerce is about to become gung-ho about President Biden’s government spending agenda. But it does mean the plutocrats have lost or are losing whatever control they once had of the party apparatus. Pierson worries that this will further empower the Trump loyalists in the party.
“The increasing degree to which the Republican Party has organized around Donald Trump, even though he’s not in office anymore, and around those who are expressing the strongest loyalty to Donald Trump—that’s a very powerful dynamic in the party and it probably does not serve the political interests of these economic elites very well,” he said.
Levin, too, sees reasons for pessimism, rooted in deeper problems of our political culture. Trump’s place in the party, he said, suggests that “a lot of Republicans don’t value basic social peace enough.”
“The political culture of the right is in a very bad place, and … there is a willingness to sort of play around with the basic foundations of social peace and legitimacy that is very alarming. And it’s driven by anti-leftism more than by any substantive concern, and that’s alarming, too. You know, to come to the point where you think the other party is the country’s biggest problem is a very bad situation in a democracy, let alone in a two-party democracy, and I think both parties are at that point now.”
Still, Levin is hopeful that someone will come along to do for the right what Joe Biden has done, to some degree, for the left: “channel populist energies in more constructive directions.”
“The reason to hope is that people feel that things have gotten very bad,” he said. “And one of the hardest things for conservatives—we always have this problem—one of the hardest things for us to imagine is renewal, is recovery. We see the straight line going down, and we think ‘well, it was nice while it lasted!’ And I think there actually are ways that, you know, when it goes down, people say, ‘let’s not keep going down.’ … How do we turn this around is not a simple matter. But I think people are not just resigned to catastrophic collapse, we just never are, and so I’m on the whole fairly hopeful.”