Does it matter whether the Roberts Court’s reputation as a business court is accurate or what the Roberts Court’s theory of the rights of business is? Does that have anything to do with democracy? And does it matter that American wealth has become more skewed toward ever fewer people than it has been since the eve of the Great Depression of 1929? What does that have to do with the Supreme Court?
The seminal insight came from Seymour M. Lipset in 1959.1 Lipset presented a correlation: wealthy, well-educated countries were much more likely to be democratic; poor countries and poorly educated countries were quite unlikely to be democratic. Since public opinion polls had suggested that support for democratic values increased with education, the solution was to develop and educate the world.
Two outliers were difficult to explain. Germany was at the center of European civilization. In the recent past it had given the world its finest music, its most compelling philosophers, enormous scientific breakthroughs, and the whole new field of psychiatry. Germany was Christian, civilized, wealthy, educated, capitalist, and developed. Neither poor nor uneducated, Germany’s surrender to fascism made little sense and called for a different explanation, though the country was going through hard times when President Paul von Hindenburg rolled out the red carpet for Hitler to become chancellor.2
India was another problem. India was very poor; its people largely illiterate. If democracy rested on education and wealth, Indian democracy should have failed. Nevertheless, its Western-educated leaders—Mahatma Gandhi, Jawaharlal Nehru, and their colleagues in the Congress Party who led the effort toward independence, as well as Dr. B. R. Ambedkar who led the movement to empower India’s “backward classes”—brought a Western model of democracy to a poor Eastern country. The Constitution they wrote committed India to a policy of massive affirmative action for the most despised peoples of the subcontinent, the “untouchables” or, as Gandhi relabeled them, the Harijan, the blessed. Preferences in India dwarfed America’s later attempt at affirmative action. India encompassed enumerable languages, peoples, castes, and all the conflicts that go with them. When Lipset wrote, it seemed one could just count the days until the collapse of democracy in India. Students of democracy are still counting. Except for a brief period in the 1970s, India has remained a democracy against what seemed like solid odds against it.
To political scientists who do empirical work these are challenging facts. At best, they meant that wealth and education are influences that compete in the real world with other factors. Waves of democracies created and lost in the twentieth century have gradually been unraveling the relationships.3
A second, complementary strand of research has been historical. In a four-volume set, Juan Linz and Alfred Stepan brought together historical descriptions of the breakdown of democracy in European and Latin American countries. They found a common theme in the way that the deep gulf in resources led powerful elites, fearing attacks on their wealth, to circle their wagons against more popular parties.4 Nancy Bermeo followed with a powerful reinterpretation of the data. Most people, she found, remained committed to democracy. But they voted for more redistribution than the powerful were willing to accept. Wealthy aristocrats lost tolerance for democracy and questioned the loyalty of their competitors. Partisan wrangles then greased the path to authoritarian rule.5
In Italy after World War I, aristocrats had much to fear from seizures of farms and factories and the political leadership on both sides refused to work together to find acceptable common ground, eventually losing the will to resist a takeover. Italy’s prime minister responded to Mussolini’s threat, or bluff, to march on Rome by leaving. The military refused to defend it, and King Victor Emmanuel asked Mussolini to form a government.6 In effect the leadership of the country abdicated in frustration.
In Germany throughout the 1920s an increasingly polarized leadership supported competing paramilitary armies. Conservatives in government took action against left-wing paramilitaries and blocked or refused to take action against right-wing paramilitaries. In 1932, most Germans believed in democracy; Hitler and the Nazis won only a third of the vote before Field Marshall Paul von Hindenburg handed Hitler the reins of government. German democracy was abandoned by an aristocracy, more afraid of a liberal victory than of dictatorship. Too much wealth makes the wealthy fearful and the rest needy. Every election in pre-Nazi Germany seemed too liberal to satisfy the landed aristocracy and wealthy entrepreneurs.
Between the world wars, dictators were invited to rule Italy, Germany, Greece, Romania, and Yugoslavia. Leaders disloyal to democracy took over via coups d’état in another eight states—Austria, Bulgaria, Estonia, Latvia, Lithuania, Poland, Portugal, and Spain. None fell as the result of a popular uprising, although Spain suffered a bloody civil war between forces supported respectively by Hitler and Stalin. Leaders on both sides abandoned democracy well before the 1936 attack on the Republic by Generalissimo Franco and others ended Spanish democracy for decades.7 Dictatorship in Europe and Latin America was largely arranged at the top, by the Right, in fear of the Left. Nancy Bermeo, a political scientist then at Princeton, describing the loss of Greek democracy in 1936, wrote, “The trigger for this change—as for so many others—was an electoral outcome that frightened the Right.”8 Working together to solve their differences did not appear to be more attractive than giving up on democracy. Too frequently, the Left also viewed dictatorship as less to be feared than trying to find a political middle path. In Spain, political stalemate led to breakdown and violence.
The narratives assembled by this group of scholars from Linz to Bermeo evidence the importance of the leadership’s loyalty to the survival of democracy. Mutual allegations of disloyalty became self-fulfilling prophecies, and threatened aristocracies who circled their wagons against change and against a democratic system that could produce it. The Left responded with equal distrust.
The pattern was repeated in Latin America after World War II. Violence in the Colombian countryside was periodic. In the 1940s it was tied to new labor organizations that seemed to promise or threaten change in political arrangements. Both parties began to find ways to rig the electoral system in their favor—liberals by adding voters, conservatives by using force at the polls. With loss of trust in the electoral system, democracy broke down. The experience of the various countries in which democracy foundered on efforts to manipulate elections suggests the potential dangers of Bush v. Gore.
In Chile, the military rejected any notion of a coup just two months before the overthrow of Allende and the installation of Pinochet. In those two months, a couple of mutinies were nipped in the bud, and paramilitaries, prepared to defend against each other’s violence, grew. In 1973, Salvador Allende’s policies went too far for Chilean landed and military elites, who seized power in a coup d’état, with support from the Nixon administration in Washington, DC. In each case, wealthy elites and powerful generals decided that this elected government should not be allowed to survive.9
Scholars studying the sequence of events in countries where democracy broke down argue that breakdown is not an automatic process; human decisions matter. In country after country, the large mass of people remained committed to democracy but the leadership became so divided that they could not work together or act to deal with the country’s problems until they eventually became complicit in the breakdown of democracy. Only people dedicated to the dream of democracy could keep India from the dictatorial experience of neighboring Pakistan. The gulf between those with and those without power makes subjugation likely. But the powerful may make different choices.
Westerners often treat countries that are ruled by a few well-placed families as undemocratic. The Philippines have long been governed by a small minority of wealthy families. Philippine “democracy” has seemed closer to aristocracy.10 The same has been true for many Latin American governments. Americans profess to see the origins of their insurgencies in the huge inequalities of landholding even while many in the United States quake at the thought of any of those insurgencies succeeding. The majorities in those countries are ruled by small, wealthy, and entrenched minorities. And most of us rightly condemn it. Democracy is government by and for the people, not rule over them.
Amy Chua, who experienced personally and tragically the strains and struggles of Philippine politics, wrote about it in her book WORLD ON FIRE. She explains that small elites feel besieged by large hostile populations and become defensive. They surround themselves with armed guards in private compounds and are ready to seize power if necessary.11 From personal experience she confirmed what political scientists have found: power corrupts. With power in few hands, few dare oppose them. Those who collude in the government share the spoils.
A new group of comparative historical analysts describe the choices of economic aristocracies to protect themselves from the dangers of holding great income and wealth in an otherwise impoverished population. They look for allies, sometimes allying with a rising middle class and sometimes against it. Noneconomic factors like religion and ethnicity affect what alliances are possible. Those alliances are driven in part by the distribution of human capital among the population, including skills, literacy, education, and mobility.12 Democracy developed slowly if at all in the face of slavery, serfdom, or other immobile and constrained supplies of cheap labor.
Late in the twentieth century, democracy began an exciting march into new areas during what Samuel Huntington termed “the third wave.”13 In 1974 Portugal overthrew the autocratic regime of António de Oliveira Salazar and his successor, Marcello Caetano, and soon joined the ranks of relatively stable European democracies. In 1976 King Juan Carlos de Borbón set Spain on a path to democracy after decades of autocratic rule by Generalissimo Franco. The Soviet Union crumbled in 1991 and nascent democracies struggled to hang on in parts of what had been the USSR.
Suddenly it became possible to investigate the emergence and the stability of democratic systems, with much more sophisticated statistical tools that could not have been used when democracies were rare events.
Despite the powerful counterexamples of Nazi Germany and independent India, third-wave and post–World War II data reaffirmed the importance of wealth. Per capita wealth has been one of the strongest predictors of democracy.14 The poorest countries provide the least fertile soil for democracy and rising income stabilizes their democracies.15 Contests over political systems in more economically developed countries are usually less deadly.16 Democracy has been very stable in the richest countries. The relationship between poverty and democracy has been confirmed both in comparative studies of democratization and its breakdown in individual countries, and in large-scale statistical studies of modern democracies.17
In 1994, Vice President Al Gore convened a State Failure Task Force, a group of political scientists both inside and outside of the government, working with the Central Intelligence Agency. The group’s goal was to figure out the chances that countries would “fail,” that is, whether they would become engulfed in civil war, be taken over by a coup, or have their governing system displaced.
The Task Force reanalyzed its own data to focus on the thirty-five cases in its database from 1955 to 1996 in which democratic governments had been replaced by autocratic ones.18 When they took a closer look, two variables stood out, accounting for 75 percent of all the instances in which democracy had been replaced by autocracy. Infant mortality turned out to be an accurate index of the breakdown of democracy.19 The Task Force interpreted that as an indicator of widespread poverty and serious infrastructure problems.20 The other was the length of time in which the country had been governed as a democracy.21 That finding could be interpreted as inertia or that democracies that provided a decent quality of life survived.22
Political scientists understand infant mortality not as a cause but as a symptom of important but less easily measured factors. There are competing explanations for why infant mortality predicts state failure. It could be the result of poverty, governmental incompetence, civil war, or other state failure. Competent states can provide the sanitation and health services necessary to bring death rates down. States that do not take care of their people and provide necessary services are incompetent. Incompetence breeds dissatisfaction and incompetent states may be unable to control violence. Hence they fail.23 Infant mortality could reflect civil wars that decimate the population through starvation and disease. In that case too infant mortality reflects state failure and poverty. Each of those interpretations fit the long-standing finding that poverty is one of the best predictors of autocracy. The Task Force data do not pinpoint a specific connection between poverty and the failure of democracy. The strength of the correlation with mortality, however, suggests that the disparity of resources plays an important part.
To understand why democracy survives or breaks down one has to dig beneath the correlation between democracy and national or per capital wealth. Robert Dahl, one of the century’s most renowned students of democracy, wrote that “we indeed do find an extraordinarily strong correlation between economic well-being and democracy,”24 but he went on to explain that more was involved than merely wealth: “We must not misread the evidence. . . . Democracy requires . . . a widespread sense of relative economic well-being, fairness, and opportunity, a condition derived not from absolute standards but from perceptions of relative advantage and deprivation.”25 In other words, Dahl concluded that disparity plays a crucial role.
Whether wealth, as Lipset initially described it, or disparity, as Dahl discussed it, makes a bigger difference for the survival or breakdown of democracy, also has important implications for constitutional law. If the question is whether United States is wealthy enough, then, unless the country quickly declines relative to the rest of the globe, it seems unlikely that there is cause for concern; and even if there were, it seems unlikely that constitutional law would have anything to contribute. However, if the issue is disparity, neither conclusion follows. America may be headed toward considerably greater disparities in wealth, and there are ways that constitutional law does deal with such disparities. So how this issue is resolved in political science can make a difference in how issues of constitutional law should be resolved.
The work of the Finnish political scientist Tatu Vanhanen has received a lot of criticism,26 but he had an often overlooked insight. Recently, Bruce Bueno de Mesquita, a widely admired political scientist now at New York University, has been making a related point from a different vantage point. The intersection of their work can be summarized as Murphy’s Law of Democracy—whoever can suppress democracy and rule, will. Their explanations, which bring us back to disparity of resources, are powerful and complementary.27
Vanhanen, father of a former prime minister of Finland, has long argued that where the resources needed to exercise power are very concentrated, they will be exercised undemocratically and democracy will not persist.28 Whether the power is held by wealthy landowners in Latin America, oil rich royalty in the Near East, or those who control the trade in crucial African mineral resources, their power is or seems too great to challenge. Vanhanen’s basic hypothesis is well stated in his 1984 study: “Democratic institutions cannot be expected to succeed in circumstances in which power resources are highly concentrated, whereas the emergence of democracy is highly probable in societies in which crucial power resources are widely distributed among the competing groups and sections of the population.”29 That is, whoever can take power, reflected in the resources they have, probably will. The distribution of power in society, therefore, determines whether democracy survives. Vanhanen’s point incorporates the findings of many scholars about the correlations between national wealth and democracy and the findings of other scholars about the behavior of leadership. Where historical studies have focused on elite motives and actions, Vanhanen focuses on relative power.
It is very difficult to measure power or the concentration of the necessary resources to wield power and that poses a difficulty for Vanhanen and for the interpretation of his data. His empirical work has been subject to well-deserved criticism.30 Nevertheless his underlying explanation is powerful. What he has tried to do is give statistical support to Amy Chua’s description of the corruption of elites. If people can control the nation, odds are they will.
Groups protect their perks and tell themselves it’s good for everyone. “They like it this way.” Slaveholders kept describing slavery as necessary for the blacks, and described the slaves as happy.31 Politicians and corporations do not rise because of their willingness to share power. They rise because of their desire to seize it. What makes them stop short and accept rules of engagement that we can fairly call democratic?
Because power corrupts, the crucial problem is to identify when, where, or how power becomes too concentrated. The possibilities change over time. Americans largely invented the first mass political parties. That changed the ways people could exert power in our political system. In business we describe power with terms like monopoly or oligopoly.32 We have many names for power in politics—dictatorship, aristocracy, or sometimes just corruption or machine politics. Pinochet exerted control in Chile through the military and Ayatollah Khomeini exerted control through the clergy in Iran. In such places, dissenters are cowed by beatings, imprisonment, or torture. In other places, dissenters are silenced by the aristocratic patrons they need for the success of their own projects, businesses, or survival.
A degree of power is inevitable and valuable. The ability of police, businessmen, editors, and planners, to make the society we live in manageable reflects a degree of power. We depend on government to be able to govern, for which it must exercise power. But when power becomes too concentrated, government becomes less democratic, or democracy is eliminated altogether.
Bruce Bueno de Mesquita and his colleagues offer us another glimpse of Murphy’s Law in action with an up-close look at how leaders can stay in office.33 Let’s call their version Murphy’s Law of Dictatorship. They argue that rulers generally have an incentive to shrink the number of people they need to rely on in order to stay in power, so that the rulers can lavishly reward their supporters and keep them in line. A small group that controls the selection of the leader can be rewarded regardless of what happens to the rest of the population. And so it is to the leaders’ advantage to rob from the poor in order to provide lavish benefits to the few other powerful people the leaders depend on. Bueno de Mesquita and his colleagues call those people the “selectorate.” The difference between what members of the leader’s coalition and the public at large get must be large enough to assure their continued loyalty and determination to keep others out of power. This is similar to aristocracies circling their wagons to prevent the masses from sharing the wealth that Bermeo and others have described. But the Bueno de Mesquita group then explains the way the elites are corrupted. Elite success depends on denying the people a voice, and also on refusing to spend on productive public goods so that there is plenty of money to satisfy corrupt appetites. Money spent on productive public goods broadens the distribution of power and reduces the share that can be lavished on supporters. Or in the language of American politics, money spent on infrastructure leaves less room to reduce the tax share of the wealthy.
The Bueno de Mesquita group also reflects on the resource side. Who the leader needs to reward depends on who has the power to keep the leader on top, the “selectorate.” However, if resources are widely distributed, the leadership will have too many people to contend with. In other words there is a cycle of power and one needs to look both at the incentives of the leaders and the way that power is distributed. Vanhanen would describe that side of the equation as resources for power. And that’s why Murphy’s Law is a fair description—elites and leaders do what is possible. They have an incentive to exert their power and take over, if they have the resources to do it. So as Murphy would have described it, what can happen, will happen.
The implications for democracy are straightforward. A group that can exclude everyone else from sharing power is likely to do it. The more resources are concentrated in a few hands, the less democratic we expect society to be. And the more dispersed resources are, the more democratic we expect society to be. In a vicious circle, concentrated wealth leads to concentrated power which leads to concentrated wealth. In a virtuous circle, broadly distributed resources lead to broadly distributed power which leads to broadly distributed resources.
Murphy’s Law of Dictatorship is also a corollary of a point experts have begun to make about revolutions, that revolutions are generated by the resources to wage them.34 Gary King and Langche Zeng at Harvard concluded that the Task Force could have improved predictions of state failure had they examined the percentage of the population in the military, the density of population, and the effectiveness of the legislature. The military population matters because “the larger the fraction of the population that has weapons and is trained in military conflict, the more risk there is that internal dissent may lead to state failure.”35
James Fearon and David Laitin at Stanford University concluded that poverty, political instability, rough terrain, and large populations make insurgency and civil war more likely and facilitate the overthrow of regimes. In other words, in their analysis too, opportunity makes rebellion more likely. If people have the opportunity to take power, watch out. Everything else may be no more than an excuse.36 Murphy rules. Political scientists refer to the ability to organize, so that many people can act together, as the collective action problem. Carles Boix points to solutions for the collective action problem as critical to the likelihood of revolution or takeover.37 As resources and the people who control them keep shifting, the payoffs people can expect from democratic and undemocratic behavior, their motives to support or damage democracy, and the likelihood of action are always in flux. That makes focusing on power an important corrective to models focusing on motives. And as the resources mount in the hands of potential revolutionaries, elites, officers, or warlords, state failure and democratic failure loom.
Game theorists have tried to model the path by which democracies are put together or break down, as a sequence of behaviors. That is a more demanding effort than identifying factors, motives, and resources. Game theorists model specific ways or sequences of events that people with a given set of motives and resources would generate.38 So far they have not found a single sequence of events by which breakdown can be described, and the existing measures leave many questions about the extent or power of resources.39
Breakdowns are generally easier to see and trace than the lengthy process of democracy building.40 For that reason, the statistics available to show the path from inequality to the breakdown of democracy are clearer than they are to the creation or consolidation of democracy.41 And in multiple ways, they reveal that fear of subordinated masses threatens democracy wherever there is a permanent underclass. Pursuit of security leads the fearful to accept a corrupt, repressive government.42 The result is a cycle of increasing fear, protection, and repression. Arms create a police state. Confirming the conclusion of earlier historical work, scientists are finding again that great inequalities encourage the wealthy to circle their wagons against the public.43 If they can control the population, it is likely they will.
Half a century after Lipset, it remains “conventional wisdom [among political scientists] that income per capita sustains democracy.”44 Disparity of resources defines who can control the state—an aristocracy, warlords, oligarchs, or the people.
Samuel Huntington identified different ways in which economic factors make democracy stronger or allow autocrats to take over. Economic development breeds trust. Entrepreneurs and other wealthy people need not fear majority rule as long as development equalizes and diffuses income. Starkly divided societies cannot develop that degree of mutual confidence. Democracies must, to a degree, function as communities.45 Economic development also supports better education, which increases support for democracy and broadens the demand to take part in government. And economic development makes compromise easier, by enlarging the resources available to meet competing demands, especially in a growing economy.46
Conversely, people who are poor can be lured into doing things that others would scorn—living as soldiers of “revolutionary” movements for the booty it brings, manning so-called goon squads that once intimidated American voters and forced them to vote as ordered, or accepting bribes to vote as requested.47 Poverty makes people vulnerable. Studies of social psychology confirm the result. Insecurity regarding basic human needs like food, clothing, and shelter are likely to produce violence.48 Democracy is not a likely result.
This strand of research has focused on the ways that great inequalities make the poor more dissatisfied, and available for the kinds of activities that corrupt elections or overturn elected government—in short anything for the individual to survive but curtains for democracy.49 Pathologies like those were extensively reflected in the heyday of American political machines prior to the New Deal.50 It can happen here and often did.
To summarize, large disparities threaten democracy in multiple ways. Too much wealth makes people powerful and fearful. Too much poverty makes people vulnerable. Generalizing both, power corrupts, and too much power is terminal for whatever is left of democracy. Either way, democracy requires dispersion of resources among the population at large. All these strands of political science converge on the relationship between inequality and the likelihood that democracy will break down. The fact that such different approaches yield complementary results adds considerable weight to their findings.51
This work counsels against the self-satisfying conclusion that America is bound to remain “exceptional,” that we are and will remain different from Germany and other European countries between the wars, or many Central American and southern hemisphere countries since then. It is important because it brings together the various and persistent observations that large economic inequalities endanger democratic government. These suggest an economic dimension to constitutional law that has been consistently denied in most prior scholarship and opinions on constitutional law.52 Democracy is threatened by concentrations of power, economic or otherwise.
The founding generation would have equated freedom with voting rather than an economic system. Indeed state enterprise was an important part of their eighteenth-century economic world. Nevertheless, in the mirror of the Cold War, many believed that capitalism would protect both freedom and democracy. That has been a powerful strain in conservative ideology,53 although some prominent conservatives have realized that capitalism can undermine both freedom and democracy54 and others have understood that capitalism does not cause democracy.55
Given that increasingly common view, political scientists began to examine whether there was a relationship. There can be. Communism as practiced behind the Iron Curtain involved the concentration of resources, so that everything depended on the state; more precisely, everything depended on the blessing of party bureaucrats and leaders. Communist government monopolized economic as well as political power. Government power can be used to demand loyalty, restrict mobility, and limit opportunity.
Capitalism can counter that by offering people alternative ways to earn a living and flourish. It can offer political freedom. But capitalism does not necessarily do either. It too tends to monopolize. Private enterprise can exert monopoly power.56 Company towns did;57 they were like one-company states controlled by large extractive industries, which maintained deep control over every aspect of life, from shopping to religious and public life.58 Aristocratic and plutocratic economies concentrate power, extracting what economists call monopoly rents, limiting what others can earn and do.
The crucial issue for democratic government is the extent of control or distribution of power and resources, not the name of the system. Many dictatorships are run by combinations of politicians with economic oligarchs. Mixed capitalist and socialist states, however, need not exert monopoly power; Europe provides many examples of this mix, as did the economy of the American colonies and early states. The issue is diversity; diversity of economic actors adds opportunity. So long as government remains one among many players in the economic system, its entry increases pluralism and the dispersion of power. People have more options, more tools to deal with problems.59 The message of political science has been that concentrated wealth and power impose considerable stress on democracy, and it is as true of economics as for politics.
Many Americans are convinced, although the facts do not back them up, that they live in the world’s wealthiest society, and many economists suggest that the very size of the U.S. economy will make it hard for others to overtake. How quickly that could change has obviously been affected by globalization which now permits giant capital flows among nations, and capital has in fact been moving industries around the globe. The continuing effects of the 2008 depression confirms the speed with which conditions can change for a large portion of Americans.
Both income and wealth are now highly concentrated in the United States, and have become increasingly concentrated over the past three decades, reaching levels of concentration not seen since 1929.60 Data also suggest slippage by comparison with the rest of the industrialized world on many measures, including income disparity. That disparity between rich and poor is now considerably greater than in the United Kingdom, France, Canada, and the nations of the industrialized world; greater than any of the other industrialized democracies in any hemisphere.61 Economic mobility from one’s circumstances at birth to opportunities later in life is no greater in the United States than in other industrialized countries and may now be less.62
Concentrated power and wealth creates incentives to undermine democracy and the tools to accomplish it. Antipathy toward democracy has already become a theme in much conservative rhetoric, theorizing, and activity.63 The question is where it will lead.
Given both the absolute change in the disparity of income and wealth within the United States, and the change relative to other countries, it is difficult to predict that the U.S. economy will protect U.S. democracy. The future is contingent on how Americans will handle the U.S. economy as much as it depends on how Americans handle other challenges.