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The political clout of the super-rich

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Louis D Brandeis, the American jurist, famously warned: "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."

Brandeis's cri de coeur was inspired by an indignant observation of the shenanigans of America's robber barons during the Gilded Age. Today, we live in a data-driven age, and some careful students of the connection between money and politics have now amassed a powerful body of evidence to support Brandeis's moral claim. A lot of it is assembled in a report by the progressive research organization Demos, published last week.

One of the most striking findings is the extent to which economic power translates into political power.

Institutionally, this is an era of unprecedented democracy - one of the triumphs of the 20th century has been the extension of voting rights to all adults in a lot of the world.

But even in the United States, the country that thinks of itself as being the world's leading democracy, it turns out that those rights do not translate into much actual political power. David Callahan, co-author of "Stacked Deck," the Demos report, describes the super-rich as "supercitizens, with an outsized footprint in the public square."

"I think most Americans believe in the idea of political equality," Callahan told me. "That idea is obviously corrupted when in 2012, one guy, Sheldon Adelson, can make more political donations than the residents of 12 states put together."

The Demos study draws in part on the quantitative research of Martin Gilens, a professor of politics at Princeton University and author of "Affluence and Influence: Economic Inequality and Political Power in America." Gilens, who focused on the divide between the top 10 percent and everyone else, found a high degree of what he calls political inequality.

"I looked at lots of survey data that indicated what people at different income levels wanted the government to do, and then I looked at what the government did," Gilens explained.

"For people at the top 10 percent, you could predict what the government would do based on their preferences," he said. "But when the preferences of people at lower income levels diverged from the affluent, that had no impact at all on the policies that were adopted. That was true not only for the poor but for the middle class as well."

Gilens is a social scientist who is careful to stick to his data. But he told me he was "definitely surprised by the extent of the inequality."

"If you value democracy, if you value the ability of people at all levels of income to shape government, which is what it means to be a democracy, then, yes, you should be very worried," he said.

One reason this "political inequality" is significant is that it turns out the rich and the rest have different political preferences. These do not split easily along traditional partisan lines - in fact, one of Gilens's findings is that political inequality persists whether Democrats or Republicans are in charge. And in certain areas, like defense policy, there is no class divide.

But on an important set of economic issues - deficit reduction, the minimum wage, free trade, regulation and progressive taxation - the affluent are more conservative than everyone else.

"None of this might matter if the wealthy and the rest of the public had the same public policy preferences," Callahan said. "But as we document, the wealthy do have very different policy preferences, particularly in the sphere of economic and fiscal policy and on trade and globalization. You see this on issues like taxation, or the minimum wage, or the general role of the government in society."

This gap in policy preferences, the Demos report argues, is the explanation for one of the most puzzling and worrying consequences of rising income inequality - its correlation with falling social mobility. Alan B Krueger, the head of President Barack Obama's Council of Economic Advisers, calls this the Great Gatsby Curve, and it is the most compelling reason to be worried about the growing chasm between the top and everyone else.

That link, which has best been documented by the Canadian economist Miles Corak, is mysterious. After all, a lot of today's rising inequality has been driven by benign forces like the technology revolution and, as a result, today's plutocrats are more likely to be self-made than they were three decades ago.

But once they become rich supercitizens, the Demos report argues, those at the top of the economic heap use their power to support policies that diminish social mobility. This is not because of malign intent - there is no cabal of fat cats in top hats smoking cigars and plotting how to keep the proletariat down. Indeed, education, a key to social mobility, is a stated priority for the affluent.

The catch comes when there is a choice between personal self-interest, often in the form of lower taxes, and the expensive institutions of greater social mobility. And that is when the supercitizens opt to pull up the opportunity ladder behind them.

Beyond the campus green, Americans can be squeamish about viewing policy choices through the prism of economic self-interest. It is much more comforting to imagine the country is engaged in a high-minded and technocratic debate about what works best to serve the common good.

But that's not what's happening. The supercitizens are very effectively pursuing their own self-interest. Social opportunity, and even democracy, are under threat as a result.

© (c) Copyright Thomson Reuters 2013.

©2021 GPlusMedia Inc.

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one of the most puzzling and worrying consequences of rising income inequality - its correlation with falling social mobility.

I don't understand why this should supposedly be puzzling and, described later as, mysterious - it seems blatantly obvious and commonsensical to me.

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"supercitizens are very effectively pursuing their own self-interest"

Quite right. When you have enough to have no concern for anyone else, why should anyone else matter?

In the States the most recent experiment with popular rule came in the form of what they called the 'Tea Party'. Of course, when the actual creator of the sham political party grew tired of his toy, Dick Armey went to the offices with an armed guard and demanded eight million dollars (usd) of the party funds to "retire" from its leadership.

Politics has itself become a toy of the super rich. An owner of a global pizza chain recently threatened his employees with reduced hours over a 14 cent per pizza health care cost.

When Newt Gingrich, the censured Speaker, in 1997 was fined more than $300,000, in 2006 ran up to a $500,000 bill at Tiffany and Co. How Gingrich made the problem go away is unclear.

From politics to business, the super rich have erased the democracy of the States and simply replaced it with bought and paid for government representatives.

Why should anyone who has more than they will ever need ever need to have any care for anyone else?

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So it is the outsized political clout of the top 10% which led to the re-election of President Obama and the Democrats retaining control of the U.S. Senate? Thanks for explaining that one, Professor!

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The world is run by the rich in gangster style. It will never stop until power is wrestled from them but modern society in unable to do anything about it, You have some who think they live on the greatest place on earth in every country, Those who live for a certain tv show and an annual holiday. Worst of all,we have those who think you can change this downhill slide by voting.

When younger i demonstrated, shouted , was arrested but tried my best to get voices out to see what is happenning. I still get the message out but now older and with family i do mostly online, i have to make sure my family are ok in future foremost. Most young these days don't care about the issues and those that do and make a noise are brandished as criminals. We are going backwards and losing our freedoms, very sad and scary.

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I had more to that early message got cut some how, Was going to explain why I had an issue. Most Americans think Democracy and they think the Government has to do what most people want, when in fact the Government is suppose to protect the minority from being oppressed by the Majority. This is why California (the most populated state) and Wyoming (Least populated state) have an equal vote in the Senate.

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The problem is that the US and other free nations have drifted into a mobocracy, I know everyone likes to sit and think the clout of the super-rich is running things b/c that would mean there was a method to the madness, but its not true it is just the fickleness of mob rule. The issue in the US is that they have lost the respect of the minority the Mob wants it all and they wanted it yesterday. Don't get me wrong the lobbyists have power, but its dwarfed in comparison to if they are Pro or Anti Abortion, Pro or Anti Gay Marriage, Gun Rights, or TPP, If the mob is focused on that issue then all other voices are silenced. This is why the US hasn't been able to focus on any kind of reform b/c is only chasing the mob, and this is why Japan has a year turnover on PM.

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Tyler Vandenberg,

BertieWooster America is a Constitutional Republic . . . NOT a Democracy

Tell that to Christia Freeland, who wrote the article above. She writes:

But even in the United States, the country that thinks of itself as being the world's leading democracy

I've always been told that America was a continent and the country you and Christia Freeland are referring to is the United States of America. You may think I'm nitpicking.

However, on the democracy issue, here is a description of the politics of the country in question. The source is given below the quote:

The United States is the world's oldest surviving federation. It is a constitutional republic and representative democracy, in which majority rule is tempered by minority rights protected by law.

Scheb, John M., and John M. Scheb II (2002). An Introduction to the American Legal System. Florence, KY: Delmar, p. 6. ISBN 0-7668-2759-3.

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@ BertieWooster America is a Constitutional Republic . . . NOT a Democracy

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NonubusinessMar. 04, 2013 - 10:15AM JST The house and senate seats are voted on directly by all citizens though. They are our representatives and they are the ones that draft laws.

Except that representatives may be voted in by people, but they don't draft laws that represent the people who voted them in.

Why? Quite simply because numerous studies have shown a direct correlation between campaign spending and election results, and even after the elections senators are regularly "bought", either through direct bribes, campaign contributions for the next election, party contributions, etc.

So while you may vote for someone that doesn't mean that they work for you.

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this is why no bankers went to the jail for the mortgage-backed securities fraud, LIBOR fraud, etc...

-1 ( +1 / -2 )

When you have total control over the media, so that you control what information reaches the public and what doesn't, you can hardly call it a democracy.

Democracy (demo = people) (-cracy = rule) was possible in ancient Greece where it was developed. A country at that time was little more than a city or an island, like Troy, Sparta and so on. With only a few thousand voting, one person's vote counted. By sheer numbers, one vote out of 100 million or more is a grain of sand.

And when one country wages covert wars on other countries, imprisons people on a whim or hearsay and holds them indefinitely, using "advanced interrogation techniques," withholding vital information from its public, it certainly is NOT a democracy.

Institutionally, this is an era of unprecedented democracy - one of the triumphs of the 20th century has been the extension of voting rights to all adults in a lot of the world.

If only that were true!

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Volland-san in the US "the people" do not get to vote for president. The presidential vote is undertaken by the electoral college.

The house and senate seats are voted on directly by all citizens though. They are our representatives and they are the ones that draft laws.

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Shock! Horror! This has being going on for 30years, most dramatically in the US. Since the 1980s the wealth inequality between the super rich and the rest of us has been growing at an immoral rate with those at the top taking an even bigger slice of the pie even after the Lehman debacle. The collapse of communism meant that many companies and governments no longer felt the need, out of fear or show, to give decent contracts, conditions or pay. Yet the right still love to characterize those who attack the 'wealth creators' as doing so through socialist envy. The US scores very low compared to other developed countries - what happened to the land of opportunity? As Volland pointed out, as long as people continue to vote against their self interest, expect this to keep growing.

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"The supercitizens are very effectively pursuing their own self-interest. "

That is the plain truth, but it is not the problem. The problem is, that because of "normal" americans, they have no problem getting away with it. A democracy needs educated, thinking people, or it will end up like the US, where people out of sheer resentment vote for the Bushs and the tea party. They vote against what they hate because they feel inferior, instead of voting in their interest. The people of America fully deserve what they get, no one else is responsible for it. The days, when a Brandeis was someone people listended to, have vanished long ago....

-1 ( +2 / -3 )

The author of this article is somewhat naive ("...most striking findings...even in the United States...rising inequality has been driven by benign forces..."). Watch this: http://documentary.net/park-avenue-money-power-the-american-dream/

-1 ( +0 / -1 )

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