Is Democracy the Rule of the Rich?

Earlier this year, the British media was aghast at the public’s rampant credulity. Polling by YouGov found a disconcerting amount of belief in conspiracy theories, ranging from far-right fables of immigrant takeover to illuminati-esque shadowy governments. But the biggest swindle of them all, with 44% of the public falling prey to it, was this one: “even though we live in what’s called a democracy, a few people will always run things in this country anyway.” Now if, like me, you happen to fall on the left side of the political spectrum, classing what essentially resembles a traditional Marxist critique of the bourgeois state as a ‘conspiracy theory’ is a bit odd. It is, perhaps, axiomatic in such ideological circles that representative government doesn’t live up to the aspiration of ‘one person, one vote’; that, in reality, it falls far short of the aspirational equality of influence that forms the root of its supposedly majoritarian core, frustrated by the inequality of material power that capitalism necessitates.

Whatever your proclivity toward such an analysis, however, it isn’t all that hard to see why it’s a potent one. As the boom industry of inequality economics has indicated, most famously embodied by Piketty’s groundbreaking Capital in the 21st Century, it certainly seems the rich are getting richer as the rest of us flounder. In the US, whilst the top 1% hold 42.2% of non-home wealth, the bottom 40% have negative equity, down $8,700 on average. The ratio of average worker to CEO compensation has too shot up, from the more palatable — 27 times in 1973 — to the stratospheric — 262 in 2005. Income and wealth concentration has reached levels not seen since the notorious Gilded Age, and continues to rise. When glancing at this perverse state of affairs — obscene wealth rising alongside the crushing of unions, wage stagnation and heightened insecurity — it’s easy to conclude the game is rigged. When no administrations, from left nor right, appear to have reversed the tide of inequality that is serving the same constituency of the ultra-rich, it is rather reasonable to begin searching for who is really in charge. As the old adage goes, our politicians may be in government, but not in power.

Yet sentiment is not evidence. And if we wish to mount an attack on this perceived oligarchy — the fat cats and their governmental sycophants — we better make sure it’s truly there. Only by firmly establishing the link between affluence and influence, to use Gillens formulation, can we make sure our efforts to excoriate such injustice, and revitalise our democracy, are not misplaced. To win back power, we must first know exactly where it resides.

Martin Gilens and Benjamin page, in their analysis of the comparative merits of opposing interpretations of American politics, offer a suitable starting point for this investigation. Here, their comprehensive quantitative data serves to confirm the existence of vastly unequal influence, with the precise mechanisms and case-studies of which to be articulated in the next sections. Beginning by outlining the various posited models of representation, Gilens and Page counterpose majoritarian electoral democracy — the tradition, evident in Tocqueville’s lamentation of the ‘omnipotent’ majority, that government policy is shaped by ‘the collective will of average citizens’ — and majoritarian pluralism — which states, rooted in the thought of Madison and Dahl, that ‘struggles among diverse factions […] lead to policies more or less representative of the […] citizenry as a whole’ — against the decidedly less rosy pictures of economic-elite domination and biased pluralism. Such theories contend that influence over the democratically process is worryingly asymmetric, with policy making dominated both by ‘individuals who have substantial economic resources’, and ‘interest group conflict’ that tilts ‘toward the wishes of corporate and business and professional associations,’ respectively. In crunching the data on the ‘policy-preference link’ between average voters at different income percentiles (90th, 50th, and 10th), as well as compiling the Net Interest Group Alignment of the most powerful interest groups, the picture does not come out well for those of us who like our democracies fair.

As they note, the true story of who bares what ‘causal impact’ on policy making is only properly revealed in situations whereby the preferences of the affluent — including groups that represent them — and the not-so-affluent diverge. Without doing so, one may very well conclude that the average voter is in fact the one calling the shots. But as Gilens and Page discover, ‘when a majority of citizens disagrees with economic elites or with organized interests, they generally lose.’ Far from being the popular will that is the determinant factor, ‘ordinary citizens […] have little or no independent influence on policy at all.’ At the top of the economic ladder, however, we find the tail that wags the dog, with their support or opposition to proposed policy being startlingly more influential that the public at large. To the sombre judgement of Page and Gilens, the pivotal contentions of ‘majoritarian electoral democracy’ can thus ‘be decisively rejected.’ Despite the ‘democracy by coincidence’, where public preferences are enacted by virtue of their confluence with elite opinion, on incredibly pertinent issues of divergence — ‘trade restrictions, tax policy, corporate regulation’, just to name a few — it is the very richest that get their way.

But what of visions of representative interest groups, struggling to enact those policies most in tune with the wisdom of the common citizen? With barely any correlation to majority preferences, reality does not correspond to the quixotic Dahlian ideal, with corporate interests dominating the corridors of power. ‘Significant independent influence’ is wielded by these networks of persuasion, once again relegating the average voter to the democratic margins of ‘near zero’ influence against such moneyed organizations. Majoritarian pluralism, it seems, must too be jettisoned. Gilens and Page’s work, wide-ranging and statistically thorough, ends with the proclamation that, ‘in the United States, the majority does not rule.’ On the question of who does, they gesture toward an amalgamation of ‘powerful business organisations and a small number of affluent Americans,’ linked by the imperatives of class dominance and accumulation. To the extent to which democracy is reducible to rule by the people, such findings indicate the inapplicability of such a mantle. In the words of our authors, ‘America’s claims to being a democratic society are seriously threatened.’

And yet, there is something unsatisfactory about their analysis. As they attest, their use of the top 10% is a proxy for the very wealthy, forced by the methodological difficulties involved in capturing data on societies uber-rich. To step into the vaunted 10%, ones household income must be just under $150,000. A notable sum, it is true, but hardly the eye-watering opulence that the likes of the 1% have amassed. In this case, use of this may ‘underestimate’ the ‘impact of economic elites on policy making.’ If affluence is influence, then it may be ‘reasonable to infer’ that with greater affluence comes greater influence. And at the dizzying heights of Davos Man — the Kochs, Gates and Bezos’ of the world — the nominal boundaries between economic and political power melt away, as their material wealth makes kings from billionaires, and peasants from proletarians.

To find true power, then, we must glance beyond the affluent, straining our necks upward toward the absurd realm of the oligarchs. To this, Jeffrey Winters piece, ‘Oligarchy in the United States?’ shall be our guide. Using Aristotle’s definition, oligarchy is ‘the exercise of power by the richest citizens’, with the confluence of their material interests serving to coordinate their actions. Oligarchic power need not require ‘explicit cohesion’ to be exercised. Visions of meetings in shadowy back rooms, deals cut along lines of personal history, all hailing from the same elite institutions, are inaccurate. Whilst ‘school ties’ and ‘social networks’ may play a part, it cannot account for the whole picture. The top tenth of the top 1%, those who possess enough wealth to confer significant political power (rather than, say, very successful professionals), is comprised of 300,000 individuals — It stretches the bounds of possibility to assume all these would be organising consciously together.

As such, their influence as a bloc stems from the distinct character of the material power (that is, vast wealth) that they wield in such ridiculously concentrated quantities. The capacity to translate such wealth into ‘substantial political influence,’ and the ‘set of political interests’ inherent to its possession form the basis for oligarchic rule. The imperatives of wealth defense, as Winters calls it, focuses oligarchic interests on rejecting property confiscation and mechanisms of redistribution, thereby constituting a policy frontier dominated — often unwittingly — by the amorphous ranks of the super-rich. Winters’ contention in this paper is perhaps narrower than Gilens and Page above, hoping to suggest causal links for oligarchic influence over significant areas of policy, rather than questioning the representative nature of the democratic process as a whole.

In this, he uses a Material Power Index, which presumes a one-to-one basis between level of wealth and power, so that twice the wealth equals twice the political power, contrasting the surplus wealth of different economic stratas that can be employed to political ends. The results are stark. As he writes, ‘the entire bottom 90% […] have less total wealth-based power than the top 1%’, with a ‘member of the top hundredth of 1%’ enjoying ‘463 times the power of an individual in the bottom 40%.’ And just like their pay packets, the numbers keep on getting bigger. For the 400 richest Americans, they have 22,000 times the political power of the average member of the bottom 90%. And in the dizzying heights of the top 100, the number almost triples to 60,000 times the influence. Even allowing for the discrepancies arising from the simplicity of the index used, such a picture is extremely worrying. For if money is the mother’s milk of politics, as they say, then those with most of it can set the rules of the game.

The vicious cycle, as Chomsky puts it in Requiem for the American Dream, whereby the concentration of wealth yields the concentration of power, which in turn precipitates greater accumulation, is the elucidated by the mechanisms Winters identifies. From crowbarring open foreign markets to predatory multinationals, to slashing top rates of tax and exploiting loopholes, the grubby fingerprints of the gluttonous oligarchs can be seen most clearly in the realm of economic policy. Lobbying, electoral contributions and opinion shaping are the three most pertinent strategies of grasping the levers of power. Campaign financing, for instance, serves to oil up the governmental machine for their own purposes, ‘filtering’ candidates that serve their interests. Those that refuse to kowtow to their ‘donors’, not engaging in the shoulder-rubbing of so-called ‘long-term investing’, do not reach office. It is not that PAC money makes decisions on policy once representatives are in office, but that those with unsatisfactory allegiances never get there in the first place.

In terms of lobbying, a similar picture of undue influence emerges. Winters details David Cay Johnston’s work on ‘armies of skilled professionals’ employed to manipulate IRS tax codes, echoing the techniques of KPMG and Ernst & Young in Britain, as they draft tax law before advising ‘their clients on how to avoid it.’ Think tanks funded by corporate interests, regurgitating the free-market dogma their paymasters approve, provide oligarchs with veneers of respectability and popular support. Whilst revolving doors and ‘golden handshakes’ bend governmental departments to the whim of prospective or former employers. To the dismay of democrats, this morass of exclusive persuasion and institutionalised bribery has become so expected its implications pass us buy. When corruption is as anodyne as this, the oligarchy behind it becomes hidden from view.

Where Gilens and Pages broad, quantitative conclusion loses its explanatory power, then, Winters more detailed, qualitative analysis of oligarchic influence fills in the gap. It follows that representative democracy, as we understand it today, is significantly hindered by the monstrous concentration of wealth that wraps itself around our governmental processes. But there are signs its grip is loosening. The electoral success of ‘Berniecrats’ — and indeed, the presidential campaign of their namesake — suggest that networks of wealth are meeting their match in networks of people. Mass movements, conducted both in reality and cyberspace, through canvassing and clicks, and coordinated through loose institutional forms like DSA and Justice Democrats, have taken diverse candidates all the way to Washington. Ocasio-Cortez’ upstart win against incumbent and party insider Joe Crowley was one of the most vivid example of the power of people to threaten oligarchic interests. The rapid informational and organisational capacities of 21st century technologies may yet open up a chink in the armour of elite political domination, from which the whole structure may be dismantled. Hopeful, it is true. But perhaps hope is what is needed. Maybe then the resignation of our denigrated ‘conspiracy theorists’ — that no matter what we do, a few people will always run things anyway — may finally be shattered.