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Analysis

A long goodbye to American democracy?

  • File - An Occupy Wall Street activist shouts slogans while marching through the financial district in Lower Manhattan on the one-year anniversary of the movement in New York September 17, 2012.

WASHINGTON: The United States’ status as a democratic society is under threat as it turns into an oligarchy where policy is shaped by a rich elite and the average citizen has little or no influence. That is the conclusion of a new study, challenging most Americans’ belief that their country is a model of democracy for the world. Two respected political scientists, Martin Gilens of Princeton University and Benjamin Page of Northwestern University, reviewed opinion surveys on public policy issues over a 21-year period and analyzed how often the preferences of various income groups became law. They found that the opinions of lower income groups counted for little. In contrast, the rich wielded an effective veto – when they opposed a measure, it had only an 18 percent chance of becoming law. In other words, the majority does not rule.

“When a majority of citizens disagrees with economic elites ... they generally lose,” the academics state.

“Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts. Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association. ... But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

That finding did not come as a surprise to liberal economists or the many thousands of disgruntled Americans who took part in the Occupy Wall Street movement that sprang up in 2011, drawing noisy attention to their country’s income inequality and the imbalance of power that accompanies it. But the study by Gilens and Page was the first to examine such a wide range of policy issues – 1,799 in total – and the impact on enacting them by the economic elite, average Americans, and the bottom 20 percent.

The academics call the resulting system “economic elite domination,” a polite way of describing oligarchy. Their conclusion runs counter to what American children are taught at school and what American politicians are fond of stressing in speeches – that the U.S. is a shining example of a democratic system that represents the interests of the majority.

Wealth has always bought political influence: contributions to political campaigns open access to politicians. What is different today is that there is more wealth concentrated at the very top than there has been since the 1920s.

Over the past five decades, the top 0.1 percent more than doubled their share of wealth – real estate, stocks, bonds – and now hold more than 20 percent of the total, according to new calculations by economists Emmanuel Saez of the University of California and Gabriel Zucman of the London School of Economics.

That upward flow, accelerated by taxation favoring the rich and Supreme Court decisions that lifted limits on campaign contributions, went along with an upward distribution of political power.

It is a trend likely to undermine the average citizen’s faith in the democratic process, which is already weaker than in many other democratic countries. Roughly 40 percent of eligible voters tend to sit out presidential elections and a poll last autumn showed that trust in the government had fallen to an all-time low.

Is there a way to halt the slide toward oligarchy? Not as long as most politicians and economists act under the assumption that wealth trickles down from the top and that a rising tide lifts all boats.

This is a fallacy, according to Thomas Piketty, a French academic whose book “Capital in the 21st Century” is hotly debated by politicians and pundits. Unusual for a 685-page economic tome, it shot to the top of Amazon’s best-seller list within weeks of publication and is now sold out.

After crunching economic data and tax records going back to the 18th century in the United States, France, Germany, Britain and Japan, Piketty predicts a 21st century of extreme inequality and slow economic growth – a combination that invites social unrest.

“The speed at which the inequality gap is growing is getting faster and faster,” he said in a recent panel discussion.

“When the rate of return on capital exceeds the rate of growth on output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based,” Piketty writes.

He predicts that the concentration of wealth in the hands of a few will result in a return to the hereditary fortunes of the 19th century. Several commentators have noted that this trend has already begun. Six of the 10 richest Americans on the Forbes 400 list are members of two families – the Waltons of the WalMart discount department stores and Charles and David Koch of Koch Industries.

What is to be done? Piketty suggests a global tax on capital assets, from real estate and bonds to works of art and yachts – held by people with a net worth of at least $1 billion. If the Princeton study on the political influence of the rich is correct, the billionaires affected will find a way to stop such taxation.

 
A version of this article appeared in the print edition of The Daily Star on April 29, 2014, on page 11.
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Summary

The United States' status as a democratic society is under threat as it turns into an oligarchy where policy is shaped by a rich elite and the average citizen has little or no influence. That is the conclusion of a new study, challenging most Americans' belief that their country is a model of democracy for the world. Two respected political scientists, Martin Gilens of Princeton University and Benjamin Page of Northwestern University, reviewed opinion surveys on public policy issues over a 21-year period and analyzed how often the preferences of various income groups became law.

In other words, the majority does not rule.

The study by Gilens and Page was the first to examine such a wide range of policy issues – 1,799 in total – and the impact on enacting them by the economic elite, average Americans, and the bottom 20 percent.

What is different today is that there is more wealth concentrated at the very top than there has been since the 1920s.

It is a trend likely to undermine the average citizen's faith in the democratic process, which is already weaker than in many other democratic countries.


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