Political Consequences of Economic Inequality in America

Not long ago I posted on a hand-wringing essay in The Wall Street Journal about the plight of service workers and laborers in various luxurious communities where wealthy Americans go to relax and kick back. Massive and increasing economic inequality clearly has negative effects on those "left behind." But a pragmatist like me is interested in consequences generally, and so with things that might be less obvious. There is an incisive essay in Open Democracy by Geoffrey Hodgson who discusses his own research and some newly published work by three political scientists I know. It turns out that one consequence of increasing inequality in the US since the mid-1970s or so is the current political polarization in our legislatures. Here is Hodgson who is gracious about the lack of impact his own book seems to have had:

"My book received respectful reviews, but it cannot be said to have had much influence. Now a strikingly similar conclusion has been reached by three scholars - Nolan McCarty (Princeton), Keith Poole (University of California, San Diego) and Howard Rosenthal (New York University) - whose work is much harder to ignore. Their new book, Polarized America: The Dance of Ideology and Unequal Riches, researches voting patterns in Congress to document what most people would accept anecdotally, that the behaviour of politicians has indeed become sharply polarised. Republicans have become much more conservative, and Democrats have become somewhat more liberal.

In summary, with the full panoply of social science and in a narrative illustrated by showers of graphs, coefficients and equations, the three scholars demonstrate pretty conclusively that political polarisation is indeed related to economic inequality. They show how ideological polarisation and income inequality fell together from 1913 . . . until 1957; and that both inequality and polarisation have been rising again since 1977.

They speculate that this may have something to do with the revival of mass immigration after the late 1960s, this time not from the impoverished corners of Europe but mainly from central and south America. It certainly has a lot to do with the conservative ascendancy since Ronald Reagan became president in 1981.

The three political scientists' most important finding, though, is that the connection between economic and political polarisation remains. Their work has several incidental but thoughtful conclusions, including disagreement with analyses of the 2004 elections that focused on "moral values", and with Republican strategists' belief in the importance of "terror" to voters. As they point out: political scientists observe that those who said fighting international terror was "very important" voted disproportionately for Bush, but it is also true that they were 'whiter, richer, more male and more Republican.'

Nolan McCarty, Keith Poole and Howard Rosenthal are cautious, even perhaps ultra-cautious, when it comes to extrapolating from their own analysis. They go out of their way to congratulate their compatriots for the steps that were made towards greater equality in the 1950s, half a century and more ago. "

A couple of things are interesting here and they emerge in this interview with Nolan McCarty. First, our political polarization results predominantly not from Democrats getting more liberal but because Republicans have been moving steadily and sharply to the right. This finding, as Hodgson intimates, falls into 'the grandma knows that' category. But it nonetheless is nice to see that Nolan, Keith and Howard establish it systematically.

Second, this polarization is exacerbated because many of those in the poorer majority are immigrants who are disenfranchised, either temporarily (if not yet naturalized) or permanently (if illegal) and so unable to contribute to an effective electoral check on this shift. Here is some of what is at stake in current debates! Immigration, as it currently takes place, in a sense dilutes the constituency for progressive or even moderate political-economic policy.

Finally, there is the "caution" to which Hodgson refers and that, knowing the authors, I find un-surprising. One source of this is surely their commitment to apolitical social scientific analysis (a commitment I applaud). But what about drawing more explicit implications once the analysis is complete? I think the source of reticence on this score might reflect the political views of the authors themselves - at least two of whom are reasonably (I mean that both in terms of relative political position and in terms of personal demeanor) conservative. If political polarization in Congress is both excessive and has negative consequences, what (to echo Lenin) is to be done?

Do we need policies that alter the composition of the poorer constituencies and so work to legalize and enfranchise immigrants? Do we need policies that redistribute (in a progressive direction), say, wealth, which is highly skewed in the US? Do we need Democratic Party structure that will allow candidates with a bit of political acuity and backbone to emerge and exploit these possibilities? If we have a class society, why not an explicitly progressive class politics (as opposed to the explicitly reactionary class politics that the Republicans already peddle)? That is Hodgson's political point. I think it is a good one.

At the end of my earlier post I recommended a set of books on inequality in America. It seems that I should now plug Hodgson's book - More Equal Than Others (Princeton UP, 2004) - as well as McCarty, Poole & Rosenthal. Inequality has consequences and many - perhaps most - of them are detrimental to the large majority of Americans.