Economic Inequality

By: Mustafa Tariq

Larry M. Bartels reflects on the question, “in a political system where nearly every adult may vote but where knowledge, wealth, social position, access to officials, and other resources are unequally distributed, who actually governs?” posed by Robert Dahl in his book Unequal Democracy: The Political Economy of the New Gilded Age.1 Although Dahl answered his question in the 1950s, Bartels decided to compose a contemporary report. In order to find an answer, Bartels analyzes several policies and acts pushed forth by the U.S Government and searches for the root cause of their passing. He discovers that affluent citizens of society influence political parties more than the middle and lower-class citizens.

As a start, Bartels explains the subjects he will cover in his book. He states when and where he will talk about certain subjects and gives a quick explanation about them before going into more detail later on. He also discusses why he researched and analyzed certain topics in order to answer Dahl’s question. Bartels accounts for 80 years of history, going as far back as 1940 in order to completely understand the context of America’s current economic and political state. He elucidates on the expanding economic inequality between the top one percent of U.S society and the bottom 99%; “The nation’s wealth is even more concentrated, with the wealthiest 1% of the households holding 41.8% and the wealthiest .01% holding 22.0%.”2 Bartels illustrates the effects this concentration can have on the political side of the government. Studies show income growth patterns differed greatly with different parties in office. Under Republicans, the middle and lower classes had it worse than under Democrats. Although profits boomed, wages stayed stagnant, and the middle-class could only afford less as prices were raised. Secretary Paulson, under George W. Bush, attributed this growing economic inequality to the impersonal market forces. Barack Obama, in order to counter this effect, taxed top income earners more in order to fund the Affordable Care Act of 2010. These patterns of economic performance ask a huge question: why do we still vote Republican if Democrats are better for the less fortunate? One of his arguments is that voters are myopic, meaning they respond strongly to economic growth but they forget the reason for the growth. One pattern, he noted, was how Democrats had less income growth in election years than in non-election years, making it seem like Republicans were doing all the work. He also noted how poor people were more likely to notice the income growth of rich people than their own, which could be a possible factor. However, in the end, he declared that most economic inequality came from voting behavior, which was unrelated to the voter.

In chapter four, Bartels attributed the escalation of economic inequality to Republican electoral success in the postwar era and partisan biases in economic accountability. Public policy, according to him, was not only shaped by elections, but by public opinion as well, regardless of the party in charge. Although it is stated that Americans don’t care about inequality, there are conflicts and contradictions between the core values of economic opportunity and political equality. As found by analyst Jennifer Hochschild, “rich and poor respondents tended to ‘agree on a principle of differentiation, not of equality…they define political freedom as strict equality, but economic freedom as an equal chance to become unequal.”3 Egalitarian values are important, thus welfare programs and the likes are supported. The population was kinder towards the middle-class than the rich, who they believed should have more taxes. In 2001 and 2003, Bush signed the 2 largest tax cuts in history. The public stated they never thought about their perspective on the tax cut; they simply voted. Bartels found that by associating a bill or a cut with the president instead of with Congress, both support and opposition went up. Views on tax cuts were usually simple-minded and guided by self-interest. The most egregious feature of the tax cut was the repeal of the real estate tax. Why would people who would be negatively affected by the repeal of estate tax come to support repealing it? Bartels suggests a theory—estate tax has always been unpopular, even before conservative tanks came through. However, he asks, if this is the case, then how did such an unpopular sentiment last for so long? Bartels concludes that public opinion is not irrelevant in politics, but it also is not enough to repeal estate tax.

In chapter 7 of his book, Bartels discusses minimum wage. The Fair Minimum Wage Act of 2007 raised minimum wage from $5.15/hr to $7.25/hr. The politics of minimum wage were driven by partisanship and ideology more than by public opinion or economics. The rise and fall of the minimum wage is a remarkable aspect of the political economy of inequality because it did not rise with inflation. However, there is no possibility of the public being against minimum wage. The substantial erosion of minimum wage over the past 50 years exposes the American political system’s unresponsiveness to public sentiments and how politicians don’t place any importance on minimum wage. Democratic theory states the government should be more responsive to the preferences of their citizens. Observed statistical relationships between public opinion and policies is largely spurious because they overlook money and other factors correlated with it that are likely to influence policy makers; “public opinion may seem to be influential only because it happens to be correlated with the opinion of influential elites, organized interest groups, or the policy-makers themselves.”4 Bartel stresses the fact that policy makers do not care about the masses several times during these chapters, they only care about affluent members of society. Only the wealthy and educated are considered because they are more likely to have formulated preferences, more likely to vote, and donate money. The figures Bartels analyzed demonstrated how elected officials only responded to campaign contributions. Senators attach little to no value to the poor as well. Bartels describes politics as depending on not only who is talking, but also who is doing the listening.

In the last three chapters of the book, Bartels discusses Obama’s impact on the economic politics of the American Democracy. The Wall Street Meltdown of 2008 and the Great Recession constituted the gravest global economic calamity since the Great Depression in the 1930s. This calamity was considered a stress test for the American political system, with the results being consistent with what was written earlier, throughout the book. Politicians are more guided by their own ideological values than by the public’s desires. Only the affluent can tilt the scale. For ordinary citizens, the Wall Street Meltdown was not a turning point. The outcome of the election was expected according to American electoral patterns. After Obama entered office, he signed the $787 billion stimulus bill, also known as the American Recovery and Reinvestment Act, which provided federal spending on infrastructure and other programs. These were tests to see if a new administration could use tax dollars effectively, hastily, and efficiently. Obama’s advisors claimed they did more in that one bill than Clinton had done in eight years. Bartel states his primary purpose in chapter 10 is to judge how important economic inequality is in current American politics. He asks questions like, “Did the Occupy Wall Street movement succeed in bringing the issue of economic inequality to broad public attention?” and “ Did the 2012 election provide a popular mandate for policies that would put a significant dent in inequality?”5 Bartels reflects on these types of questions because he wants to know if people know what is going on in their country and government. He wants to know if people care. In 2012, the impact of inequality as a political issue had less to do with concrete political preferences. Bartels claims Obama was not reelected because of public support on taxing the rich but because Mitt Romney was viewed as an out of touch plutocrat. Ever since the time of Aristotle, the impact of wealth on political life has been a subject of concern. The difference between an oligarchy and a democracy is the difference in wealth, or the lack of thereof. The escalating economic inequality and political corruption of the Gilded Age and the Roaring 20s led to the Progressive Era and the New Deal. Louis Brandeis wrote, “we can have a democratic society or we can have a great concentrated wealth in the hands of the few. We cannot have both.”6 Brandeis’s statement supports Bartels’ purpose in discussing economic inequality. He hopes to create a more democratic nation where the weak are protected by the strong. Our leaders should not only focus on the rich, but on the poor as well.

Bartels wrote this book in order to determine how economic inequality correlates with political inequality in modern-day America. Bartels wanted to know the effect of having a majority of wealth concentrated in the hands of the few. Thus he reflected on a question posed by Robert Dahl: In a political system where nearly every adult may vote… who actually governs?”7 At the current rate, the rich are getting richer while the poor are getting poorer, as seen when he states “the top .1% income earners- has tripled, from 3.3% in the late 1950s to 10.3% in 2014. The share going to the top 1% income earners- a much broader but still very affluent group- doubled over the same period, from 10.4% to 21.2%.”8 His curiosity stemmed from the major changes occurring in American society over the past three decades. Thus, he decided to.

Bartels holds an unbiased perspective when researching and analyzing the data he presents. In his preface, Bartels claims he hasn’t voted since 1984. If this claim is considered legitimate, then he has no reason to prefer one party over another. Throughout the book, Bartels does not bring up any personal experience, discussing his findings as “a student of democracy.”9 Although he holds no bias in his book, Bartels obviously favors the Democrats, as seen in his book What’s the matter with What’s the matter with Kansas, where he paints Republicans as luring working class voters away from the liberal democratic party. However, Bartels states “I have done my best to follow my evidence where it led me.”, thus he is unlikely to favor any party over the other.10

Unequal Democracy: The Political Economy of the New Gilded Age has two versions to it. The first version came out before Obama’s election, thus the second edition was written to cover his entire presidency. Bartels states he wrote the first version because it was important to him to explore the ramifications of escalating economic inequality for the American political system. He was inspired by the major change in American society over the past few decades, to which he refers to as “The New Gilded Age.”11 In the second version, he adds new content because he was influenced by new books which had came out, such as Paul Pierson’s Winner Take-All Politics and Joseph Stiglitz’s The Price of Inequality. The revised edition, which came out in 2017, was influenced by the epic financial crisis of 2008, Obama’s election, and the measures taken to rescue Wall Street, and Trump’s election. Bartels states these events are “highly relevant to the economic and political issues” he discusses in his book.11 He believed by paying attention to public opinion, partisan politics, and public policy, he could understand why the economic statuses of each class diverged so dramatically.

Daron Shaw’s—a professor at the University of California, Los Angeles—critical review of Unequal Democracy points out a few flaws he finds with the book, although he enjoyed the book immensely and agreed with most of it. His only problems were with lag time- the amount of time it took the government to respond to a change in presidency and a change in the economy- Bartel exclusively using income growth as a measure of economic performance, income mobility, and not having proper controls for alternate solutions. His issue with lag time stemmed from the fact that Bartels was picking it based on what he was supposed to be proving, which could possibly create an error in the analyses he made. Shaw agrees with using income growth as a measure, but he also believes there should have been other ways as well because then it would have a wider variety of coverage over the economy. For income mobility, Shaw believes that most Americans don’t believe they need to be rich in order to have good lives; they are content with what they have. Shaw states, “Larry Bartels’ most recent effort, Unequal Democracy, is the kind of book, by the kind of political scientist, that quite a few people in our discipline have been waiting for. It is thoughtful, provocative, and analytically rich.”12 This assessment shows how highly regarded Unequal Democracy is in the political scientist community. Although there are a few flaws in the overall book, according to Shaw, Bartels still effectively answers his thesis. Jennifer Hochschild, a Harvard professor, agrees with Shaw. She states, “The book is exemplary throughout in its transparency with regard to the data and Bartels’ analytic strategy for using them, in its attention to alternative explanations for a given outcome, and in its balance between not over-reaching and asserting a clear, controversial, important thesis.”13 Both reviewers support Bartel’s book because he remains unbiased in his analysis. He claims are strongly supported by the data he presents... The only limitation with these two reviews is the fact that they do not cover the second edition of the book.

There is a clear case of biasedness in the American government towards the more affluent members of society. Politicians favor those who can benefit them. Those deemed useless are disposable for leaders to gain more. These inequalities stem from the economic inequality between members of the same community. The top one percent holding almost half the wealth of the nation creates a gap which cannot be crossed by simply raising minimum wage. Politicians need to be given a reason to help those at the bottom of the social ladder, something which will never happen if they only act for self-interest. Bartels claims the people can overturn this ideology of self-interest, as long as they, “insist that the most vulnerable among [them] not be abandoned when the affluent flee to higher ground.”14 To end economic inequality and make America a true democracy, the people need to support each other and not back down in the face of the rich. He advocates for the people to start making choices, to put an end to the inequality permeating throughout America.

Bartles mainly focuses on economics in his book with a tinge of politics throughout. His book reflects on the changes which have come to America as a result of the end of the Cold War by discussing forces beyond the control of the president, such as more women in the labor force and the price of oil. He also states how the Republicans main electoral success came from the result of economic accountability, which lead to “escalation in economic inequality associated with Republican administrations and policies.”15 Bartles discusses the impact of technology and how it creates a bigger divide between the classes because the poor can not afford as much as the rich, especially when, “without periodic action to increase the minimum wage, inflation produces a steady decline in its real value.”16 The rising costs due to inflation make it necessary to increase the wages of the lower-class, which could have a huge effect on the economy.

Larry Bartels proves economic inequality exists in contemporary America; his studies find that the affluent members of society influence the government more than the middle and lower class. Bartles discusses the political and economical factors influencing the American people and the choices they make. He offers solutions, such as making choices to help others, to put an end to this inequality in order to make America a real democracy.

[1] Bartels, Larry. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton and Oxford: Princeton University Press, 2016. 1.
[2] Bartels, Larry. 2.
[3] Bartels, Larry. 106.
[4] Bartels, Larry. 234.
[5] Bartels, Larry. 310.
[6] Bartels, Larry. 343.
[7] Bartels, Larry. 1.
[8] Bartels, Larry. 1.
[9] Bartels, Larry. Preface.
[10] Bartels, Larry. Preface.
[11] Bartels, Larry. Preface.
[12] Shaws, Daron. Review of Unequal Democracy. University of Texas at Austin. 2008. 2
[13] Hochschild, Jennifer L. Perspectives on Unequal Democracy: The Political Economy of the New Gilded Age. Harvard. 2008. 3.
[14] Bartels, Larry. 363.
[15] Bartels, Larry. 105.
[16] Bartels, Larry. 209.