The Politics of Inequality: A Political History of The Idea of Economic Inequality in America

The harsh realities of economic inequality have only increased in intensity since the initial publication of this book in 2007. The gap between economic classes in American society continues to expand and political parties are polarizing, while organizations that secure political power for corporations intensify their influence on policy and elected officials even as unions fragment and dissolve. The results are that the progressive institutions erected during the great decades of reform in the early to mid-twentieth century are being dismantled, and American democratic institutions are now taking on the features of outright plutocracy. But one thing has remained stable throughout: progressive responses to inequality remain weak and ineffectual. In this sense, the central argument of my book retains its salience for contemporary affairs and events: the revival of America’s lost egalitarian tradition must be at the center of a new politics against inequality. The originators of America’s egalitarian tradition were clear in their insistence on anti-hierarchical forms of social organization and the need to prevent the dominance of wealth in order to maintain a democratic republic. They saw economic divisions as inequalities of social power, the very soil from which social domination and relations of subordination and servitude would spring forth. But today, debates about economic inequality are obscured by talk of “fairness” or of “economic efficiency.” In some ways, this discourse on economic inequality revives the language of a once-discredited social Darwinism: if taxes rise on the wealthy, the jobs they create will disappear; policies that push for redistribution “punish” the agents of innovation; and most recently, with the rise of the Tea Party, any governmental interference in economic life is seen as inherently “despotic.”¹

The Politics of Inequality deals with this question in the most direct way. It argues that the reframing of liberalism that occurred in late-twentieth century American political culture has hijacked our understanding of economic inequality. The history of the egalitarian movements and thinkers that were once vibrant in American history drew upon a reservoir of ideas and values that have since dried up in contemporary political culture, leaving us bereft of crucial framing mechanisms to assist in a critical appraisal of the contemporary social order. Ideas that once placed emphasis on the absence of economic servitude, on reigning in the power of economic elites and social hierarchy, have all eroded. Recent political events give ample empirical justification for this thesis. In contemporary politics, much can be learned from the ways that the business community has been able to assert control over political parties, educational imperatives, the media, and the broader political culture itself. Political ideas serve a legitimating function for any social order. I want to suggest that delving into the historical reserve of political values developed in the course of American political thought can and should help us frame a new politics against economic inequality and toward a more compelling sense of social justice.

The statistical features of this debate are beyond dispute. Despite conservative attempts to mask the issue, economic inequality has continued to surge. The first decade of this century has seen the economic prospects of both the poor and the middle class fall, as wealth and income for the upper ends of the distribution have increased exponentially.² At the same time, American society has seen its average economic well-being outpaced by overall GDP: as Americans work longer and harder, they are paid less for their increased labor time and productivity.³ To protect their gains, economic elites have captured enormous political power in national and state governments, and the problem of oligarchy has now become a concern for mainstream social scientists.⁴ Empirical researchers continue to document how economic inequality has deleterious effects on multiple facets of individual quality of life as well as on personal and public health.⁵ We also have ample evidence that economic inequality suppresses political engagement, weakening democratic institutions and creating an even richer soil for entrenched elite control.⁶

This book attempts to answer the question of why American politics does not evince a more progressive response in the face of ballooning inequality and the emerging oligarchic tendencies in American social and political life. One classic explanation of this problem has been to understand the lessening friction between classes as the result of structural compromise. When the wealthy and the state allow for marginal redistribution and other mild concessions, the result is an attenuation of class tensions and conflict.⁷ Yet another comes from a different perspective. This point of view sees that any system of social institutions becomes legitimate in the minds of its members to the extent that they are adapted to it. Thus, the cultural and educational dimensions of society are able to forge a consensus around the present system and social order, thereby legitimating its consequences. One can argue that the business community has been successful in making certain ideas about our economic life ambient in our culture, rendering them almost second nature. But perhaps the most pervasive among all these explanations is the idea that inequality is the result of reward for innovation. Those that make more are remunerated for what they have been able to produce and create. We all benefit and, the argument continues, the rich have earned their wealth accordingly. This also leads to a sense of fear: redistributional policies will scare off entrepreneurs and businesses, leaving us without jobs or rendering us less competitive. Tax cuts on the wealthy and on corporations are now viewed as “logical” if not “necessary,” particularly in a period of economic crisis.

The idea of the market in our culture has therefore been recreated as an entity distinct from its human participants. This new, re-invented market ideology is an individualized economy, one devoid of relations of social power, without political interests: a natural field where only the best suited can survive the bellum omnia contra omnes. It is a market consisting of rational agents, preference sets, and utility curves. It is constituted by iron-clad “laws” that must not be violated, not without paying extreme social costs.⁸ In this way, Americans have come to see deference to economic elites as being in their own interests—nay, as part of the natural warp and woof of the modern world.

No less of a problem has been the weakening of the progressive discourse on this theme in recent decades. Whereas progressive political thought and theory had once seen issues of class and economic power as the centerpiece of its concerns, late twentieth and early twenty-first century leftist theory has been fragmented by issues such as “identity” and “culture” that are now given primacy. The corrosive effects of irrational, pseudo-intellectual fads such as poststructuralism, postmodernism, identity politics, and “cultural studies” stand as barriers to conceiving ways of combating economic inequality.⁹ The move away from materialist forms of political and social theory has meant a move away from concrete concerns with social power that are crucial for nourishing ideas that counter the hegemony of economistic and neoliberal paradigms of thought. To enliven the discourse of economic justice and equality once again, we need a return to just such concrete understandings of politics, and of economics as well. I remain convinced that this politicization of economic life is the most genuine path toward rebuilding a strong political response to contemporary economic inequality, one in stark contrast to the timidity of contemporary liberalism and the incoherence of academic leftism.

But what would such a politicization of economic life and institutions look like? As I argue in the pages that follow, it means seeing economic relations as relations of social power, subordination, and control; it also means moving away from the liberal structure of thought that has become ascendant and looking toward the republican idea of holding economic institutions accountable to public, democratic ends. Anathema to the assumptions of those that see American politics as “exceptional” with respect to economic justice, movements against economic elites, oligarchy, unequal economic privilege and property, the emergence of industrialism, and of capitalism were all at the heart of America’s egalitarian tradition. How can a free society be maintained without a fairly equal dispersion of property? How can a state of equals be maintained without preventing the agglomeration of a wealthy minority able to subordinate the entirety of the political community to their interests? Those informed by the egalitarian tradition knew it could not be, and it is this impulse that I seek to tease out of the intellectual debates on economic inequality in American history. The political traditions that have informed previous periods in politics are needed to frame the problems of the present. What I document in this study is the devolution of America’s egalitarian tradition: a tradition of thought that was once held together by its adherence to a conception of democracy rooted in the republican idea that unequal property led ineluctably to unequal political power. The ideal of modern republicanism was to create a self-governing political community, one where elites of all types would be held accountable to the common good.

Today, this tradition has almost completely disintegrated. Our culture has been reprogrammed to see equality as a catch-word for tyranny, for social control. Now, for reasons never adequately justified, the belief persists that equality is achieved at the expense of freedom. But this change in the understanding of economic equality in American political culture is at odds with the overwhelming bulk of its past traditions. The critics of economic inequality informed by this republican ideology knew that it would lead not only to exaggerated political influence and power. They also knew it would spell the end of the egalitarian relations that were the very essence of a democratic polity and society. In some ways, this was resonant in the idea—first initiated by Aristotle in Books Three and Four of his Politics—that the nature of a citizen was that he knew how to “rule and be ruled”: the essence of what it meant to live in a free (i.e., self-governing) and equal political community was that each knew how to give as well as take commands and to accept the rule of what was best for all, all for the purpose of serving the common interest. But inequality in property and economic power creates a different dynamic. It marks off one class of citizens habituated to ruling from another routinized into being ruled. In short, it creates a situation of subordination, of mastery and control, of permanent serfdom. In such a situation, living in a free society, in cooperation with others for mutual benefit and the common good, becomes impossible.

It may seem a long stretch from this insight to the realities of the present, but this would be a mistake in judgment. The inequality we witness today is not only a matter of unfairness, it is a matter of social subordination and is a threat to democratic forms of life. As our common public goods come under attack, as tax burdens become ever more unequally distributed, as production decisions become more centralized and less accountable to democratic and public ends, and the more that political elites come under the direct influence of the power of economic power, we begin to see the erosion of the structure of democratic life. Dispossessed of those goods that were once seen as easily accessible—affordable higher education, decent wages, ample leisure time, and so on—the effects of economic inequality are becoming ever more apparent. This is because economic inequality means an inequality of the most crucial power resource attainable in society: wealth. It is for this reason that the politics of inequality always stirred the deepest passions and democratic sensibilities. The fight for economic equality needs to be seen as a fight for the kinds of social accountability that democracy requires.

Social movements and organizations therefore need to privilege once again this egalitarian tradition, drawing inspiration and conceptual argument from the ways in which egalitarian thinkers in American thought were able to contest the asymmetrical power relations intrinsic to economic inequality. These movements are the crucial agent of progressive, democratic social change. They provide the essential active element that prevents the state and economic elites from binding together to promote the interests of the wealthy.¹⁰ Economic, fiscal, and tax policies today are the direct expression of this. Tax cuts on the wealthiest Americans and corporations, the slashing of public spending, vociferous movements against all forms of regulation and redistribution—all speak to this new reality. New movements that privilege economic equality will therefore also contain within their list of demands a new form of democracy. They will demand the reinvestment of exorbitant profits into socially relevant, public ends; they will push for the democratic accountability of the business community just as they will fight to extend and protect their rights to health care, leisure, and a humane work environment; they will seek to wrest from the minority of society the ability to command the labor and economic resources of society as a whole; they will, in short, insist on the democratization of our common economic life. In a Machiavellian ritorno ai principi, these movements must look to the past, to the values and principles that laid the foundation for the fight for a more just, more democratic society, one devoid of the arbitrary power of the wealthy and their ability to dominate society for their particular ends.

Today’s movements must abandon the liberal mantras of distributional “fairness” and pick up on the conceptual language of these past thinkers and movements. They must turn their attention to the political valences of the economy and seek to employ politics against economics. They must see that democracy is a style of life that must be extended deep into the domain of our economic institutions. Only in this way will a true politics of equality be able to take root and defend the very substance of genuine democracy conceived as a protector of the common benefits that living in a civilized society of equals can provide. Anything less means a diminution of our collective quality of life, of our ability to control the power and interests of concentrated wealth, and an erosion of our democratic institutions and sensibilities—it means, in short, our political, personal, and cultural debasement. For this reason, I remain hopeful that the ideas of this egalitarian tradition can help us reframe a new politics of inequality and move us away from what looks to be a permanently unequal and unjust social order.