Wealth and Democracy

Inequality, as Jeffrey Winters reminds us, is very old— indeed, so far, perennial. Democracy is rather arrestingly new, mass democracy especially so. It is an increasingly common perception that economic inequality must be brought under control for democracy to realize, or recover, its potential. The argument developed here suggests something further: that robust democracy is necessary if wealth is to realize its potential for social benefit. Indeed, democracy must be able to intervene in the definition, creation, distribution, and use of wealth precisely to make the benefits of wealth real. A political scheme of social provision, and political limitations on the scope of inequality, are the most plausible means to prevent growing wealth from undercutting its own benefits. This idea is not extremist: it simply states the logic of the mid-century social-democratic accommodation that established a measure of security and a pattern of widely shared economic growth. It does, however, insist on the priority of that political logic. The free play of the market will not deliver the goods that market-led growth in wealth is conventionally celebrated for producing. Only democracy can do that.

Wealth Concentration, Racial Subordination, and Political Corruption

Jeffrey Winters writes that “Wealth concentration is the single most enduring economic pattern across all polities from Mesopotamia to the present— interrupted only rarely and for brief intervals.” His important chapter centers on “wealth defense,” which refers to measures taken, mainly by or for the most wealthy, to maintain their exceptional wealth.As Winters’ view of American public policy appears sound to me, I propose to abdicate the role of philosophical critic and instead explore further applications of his wealth defense thesis in American history. If my comments seem at any point to disagree with Professor Winters, I think they may be regarded as friendly amendments. I focus on slavery, labor unions, and the corrupting role of wealth in democratic politics.

Wealth Defense and the Complicity of Liberal Democracy

Sustaining extreme material inequality is neither easy nor automatic. It requires constant and active strategies of wealth defense by the rich, including using their money to hire protective services (which in the twentieth century took the form of a specialized wealth defense industry). An important transformation over the centuries was the movement of violence out of the hands of the rich in exchange for their support for impersonal institutions of coercion whose first priority has been the defense of property rights that make great fortunes viable politically. This chapter focuses on the changing politics and power that undergird wealth stratification. The analysis takes a deep historical view of the social tensions inherent in wealth concentration, starting with the origins of wealth inequality, and continuing with a discussion of the strategies and politics of wealth defense as personal fortunes grew in scale and as threats and predations multiplied. The second half of the chapter focuses on the modern era through an examination of the United States from the 1780s to the present. The US case demonstrates that for democracy and extreme wealth stratification to be compatible, democracy must first be structurally impaired and ideologically reframed to hinder egalitarian impulses from becoming government policy.

Where’s the Middle? Constitutional Aspirations, Biased Institutions, and the Disappearing Middle Class

What does the Constitution say to the grim spectacle of an emerging oligarchy? Tracing the existence and then decline of “democracy of opportunity” and “inclusion” traditions, Joseph Fishkin and William Forbath articulate a constitutional vocabulary for identifying the economic and attendant political oppressions unmistakable in the nation today. Their call for an equal opportunity constitutional politics challenges some entrenched ideas about what counts as “the constitutional,” and I want to engage some challenges they are likely to receive. Their ambitions are scholarly and political. From a scholarly point of view, they want to bring attention to an important discursive tradition. Politically, they expect that equal opportunity outcomes are more likely if political adherents don’t unilaterally disarm from constitutional argumentation. My criticism touches both aspects. From a scholarly point of view, grappling with the structural features that mobilize multiple constitutional discourses challenges hope about the Constitution’s ability to deliver a politics that truly resists oligarchy. Politically, I maintain that the struggle is still worth all we’ve got, but the deck is stacked, and mobilizing alternative constitutional discourses on its own addresses a relatively narrow part of the problem. Resisting wealth domination calls for transformative, not just interpretive, consciousness.

Wealth, Commonwealth, and the Constitution of Opportunity

New work in economics has shown how extreme inequality of wealth makes opportunities more unequal by hardening class lines, restricting access to networks, and giving elites both the means and the incentive to maintain and magnify their own advantages and keep others out. Moreover, we know more clearly than ever how economic and political inequality (and inequality of opportunity) are intertwined. But we have somehow lost the sense that these threats to our democracy of opportunity are threats, as well, to our constitutional order. We tell the story of the democracy of opportunity tradition, exploring how both its proponents and its opponents viewed these constitutional stakes at a series of critical moments of constitutional conflict. We begin our story at the beginning, and then recount how the democracy of opportunity tradition evolved as both our economic life and our constitutional order evolved. We then tell a story of how the democracy of opportunity tradition was forgotten, and how that forgetting colored the revival of the constitutional principle of inclusion in the Civil Rights Revolution. We end by addressing why the democracy of opportunity tradition matters today, and what might be at stake in recovering it.

Having Too Much

This chapter defends the limitarian doctrine, which entails the view that it is morally objectionable to be rich. I examine how limitarianism can be spelled out and whether it can be convincingly defended. As is the case with egalitarianism and other distributive views, one can distinguish between intrinsic limitarianism and non-intrinsic limitarianism; and a variety of justifications can be explored. I defend non-intrinsic limitarianism based on two different arguments: the democratic argument and the argument from unmet urgent needs. An account of what “riches” entails is also developed, since any plausible account of limitarianism requires a sufficiently clear account of the threshold. I also discuss whether limitarianism should be defended as a moral or rather as a political doctrine. Finally, I analyze and reject two important objections, claiming that limitarianism violates equality of opportunities and that limitarianism does not take incentive considerations into account. The chapter concludes with an outline of a future research agenda on limitarianism.

The Evolution of Wealth and Mutual Concern: Democracy or Revolution?

This chapter considers one way of justifying constraints on wealth that appeals to the importance of doing so to promote social democracy. The argument suggests that a broad distribution of wealth is necessary for political equality and democracy. It asserts that mutual concern requires supporting a truly democratic society (over, e.g., addressing more property global issues). This chapter critiques the appeal to mutual concern as a ground for social democracy and argues that further evidence is necessary to make the case that constraining inequality in the distribution of wealth is necessary for political equality and democracy. However, its aim is not to justify inequality. Rather, I believe social democratic principles justified by appeal to mutual concern should not preclude a much more revolutionary redistribution of income across states; we may need to reform our political as well as economic system to better protect individuals’ basic interests irrespective of country of origin.

Not So Fast: The Hidden Difficulties of Taxing Wealth

As an antidote to increasing inequality, policymakers and academics frequently call for heavier taxes on the wealthy. As this chapter shows, using the tax system to fight inequality requires careful consideration of both normative and practical concerns. Certain goals (for example, the concern that wealth concentrations harm the political and economic systems) suggest taxing wealth itself via an annual wealth tax as an ideal solution. Not only would such a tax be hobbled by administrative and valuation concerns, however; it is likely unconstitutional. The optimal second-best solution would be to tax capital gains at death, thereby closing the loophole that allows untaxed appreciation at death forever to escape taxation. In contrast, other goals (such as equality of opportunity) counsel taxing wealth transfers as an ideal matter. Best reflecting that goal is an accessions tax that taxes transferees on the cumulative amount of gifts and bequests received. One unintended consequence of wealth transfer taxes, however, is that they likely spur families to engage in greater consumption, much of which may exacerbate inequality of opportunity. This consequence means that taxation must also be coupled with greater leveling up efforts that provide children born to less financially advantaged families with opportunities to develop their talents and abilities.