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Friday, October 21, 2016

With wealth concentrating in the hands of the few, and the Supreme Court handing even greater political power to those with big money, what can be done to protect democracy?

The Supreme Court’s McCutcheon decision, making it even easier for the rich to buy political power, highlights the big question raised by Thomas Piketty’s new instant economic classic, Capital in the Twenty-First Century. What chance is there for our democracy to stop the relentless accumulation of wealth by the richest few?

The core lesson of Piketty’s book, based on extensive analysis of data, is that, as Eduard Porter summarized in the The New York Times, “the economic forces concentrating more and more wealth in the hands of the fortunate few are almost sure to prevail for a very long time.” Piketty says that as the return to capital exceeds economic growth, an ever larger share of national income goes to the owners of capital, the managers of capital and to their heirs.

Economics can’t reverse this, Piketty warns. Only “political action can make this go in the other direction,” he told Porter. The political action he recommends is global taxation of wealth and highly progressive income taxes. As James Galbraith points out in a review of Piketty’s book in Dissent, labor policies like raising the minimum wage and empowering labor unions would also work to share increases in national income more fairly and reduce income inequality, as would robust inheritance taxes.

Policy solutions are easy to come up with. The enormous challenge is that the more wealth is concentrated, the harder it becomes to enact those policies.

That’s not how it is supposed to work in a democracy. In theory, if the great majority of people are doing worse, while a few are doing much better, the majority should be able to change the policy at the voting booth. As just about anyone in America will tell you – from the Tea Partiers who decry crony capitalism to the Occupiers who rail against the 1 percent (I’m with them) – that’s not happening.

In the last few years, several academic studies by Larry Bartels and others have documented that what the rich believe prevails in politics and what the rest of us think has relatively little impact. The most recent study, released last month, was summarized in Forbes this way:

…[T]hose who have assets worth $40 million or more hold undue sway over the positions politicians take on issues ranging from health care to global warming to defense spending. The wealthiest Americans, contends the paper, are more conservative than the public as a whole on many issues, and U.S. public policy reflects that.

That academics are finding what everyone outside of the five-member conservative majority in the Supreme Court believes – money buys influence, not just access – is gratifying, but hardly surprising. Of course, the political clout of the wealthy is based on more than just campaign cash. It’s control of major media and of much of academia. It’s control of people’s lives, so that corporations can threaten to cut jobs due to pro-labor policies and those threats are too scary for many people to risk challenging. It’s the prevalence and convergence of the conservative narrative, creating the “false consciousness” that leads so many people to vote against their own economic self-interest.

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  • sigrid28

    Thanks for a terrific article–in all senses of the word: TERRIFIC. Kirsch’s one-word solution, “organize,” should be the clarion call for all progressives with respect to the 2014 election. We must retain a majority in the Senate, so that President Obama’s nomination for a new Supreme Court judge–if he has the opportunity to select one–can be confirmed. The Obama administration has to keep judicial nominations coming down the pipeline to the federal courts, and our legal teams must keep challenging unjust laws in the meantime. I think there is more than enough to do. We need Democratic wins for the White House in both 2016 and 2020 if there is to be any hope in reversing the damage caused by this activist Supreme Court.

  • dtgraham

    By itself alone, McCutcheon doesn’t add too much more to the corrupting influence of money on politicians but that’s not the main problem with it. It was built on previous precedents and will in turn almost certainly become a pathway to worse decisions yet to come.

    Citizens United was eventually born out of the 1976 creation of independent expenditures that loosened and modified the campaign finance laws legislated right after the watergate era. SpeechNOW v federal election commission used ‘Citizens’ legal logic to turn Pacs into unlimited Superpacs. With John Roberts and his remarkably narrow and restricted definition of political bribery and quid pro quo, and the presence on the court of self declared Clarence “free for all” Thomas, the individual donation limit of $5200.00 per candidate will surely go and it won’t be long. I don’t see how it lasts.

    Alex Sink and Greg Jolly recently spent well over 3 million dollars between the two of them on their Congressional race in Florida. I’m not convinced that a handful of additional $5200.00 donations would have dramatically worsened the situation, especially given the nature of non-disclosure, unlimited Superpac money.

    You always know who is behind the Superpac and which candidate(s) that this money will be supporting. The only difference of eventually lifting the non-Pac per candidate donation limit is that it would allow you to give directly to that candidate, but marketing and positive/negative ads are the name of the game anyway even if they’re “non-coordinated”—let’s face it. While it seems to me that Superpacs are an effective enough conduit to a candidate, the final removal of McCutcheon’s finance law remnants would be still another blow to democracy for sure.