Can American Democracy Survive The Era Of Inequality?

Only in our obsessively data-driven era could an issue as socially profound as economic inequality be almost exclusively presented as a mathematical abstraction. Over the past 30 years, an equation has malfunctioned in America, and the numbers do not add up. Occupy Wall Street declares solidarity with the 99 percent, and French economist Thomas Piketty has centuries of figures to prove it. The fact that these bloodless metaphors serve as effective political slogans demonstrates the severity of the problem. Sen. Bernie Sanders’  (I-Vt.) statistically dense stump speeches attacking the 1 percent transformed him from an obscure hippie into the most popular politician in the country.

But inequality is not the breakdown of an awesome machine. It is a political crisis one that threatens the very foundations of American government, according to a startling new book by Vanderbilt University Law School professor Ganesh Sitaraman. In The Crisis of the Middle-Class Constitution , Sitaraman argues persuasively that the American Constitution requires a robust middle class to operate, and will break down in the face of prolonged, severe economic inequality.

In a narrative that reaches all the way back to ancient Athens, Sitaraman presents the American Constitution as a radical document that broke with all prior Western legal systems by rejecting the idea that significant economic inequality is both natural and inevitable. Where Athens, Rome and subsequent European empires constructed their institutions to prevent class antagonism from devolving into class war, the United States built a legal system that required broad economic equality to function.

Other constitutions, Sitaraman told HuffPost, “built economic class right into the structure of government. In England, for example, you’ve got a House of Lords for the rich and you’ve got a House of Commons for the poor. We don’t have anything like that. … And the reason we don’t have that is that the founders looked around and they thought that America was uniquely equal economically in the history of the world.”

By not baking class division into the cake, the American system avoided granting explicit privileges and protections to the rich. But the lack of constitutional checks on the power of either the rich or the poor also makes the American republic uniquely unstable during periods of deep inequality. “If the middle class collapses and the gap between the rich and everyone else expands, economic inequality will soon lead to political inequality,” Sitaraman writes. “Eventually, the political system itself will be deformed to stack the deck in favor of the economic elites. Either the republic will transform into an oligarchy, or the people will be seduced by an authoritarian demagogue.”

Listen to HuffPost’s interview with Sitaraman in the HuffPost politics podcast, So That Happened, embedded below. The discussion begins at the 19:25 mark. 

Sitaraman’s account may surprise many liberals. For decades, the early years of the American government have been the intellectual property of the political right, with tri-cornered hats, fifes and snare drums serving as the iconography of conservatism. To the left, the American Revolution is widely seen as a war waged by wealthy white colonists infuriated by high taxes who somehow never got around to abolishing slavery while they were reshaping their political system (although Alexander Hamilton, an authoritarian who personally profited from the slave trade, is enjoying an odd resurgence of liberal popularity).

Sitaraman doesn’t deny the dark side of the founding generation. He bluntly denounces its shortcomings and bemoans the injustices committed against women, African Americans, Native Americans and other minorities throughout U.S. history. But he also teases out a uniquely American egalitarian economic tradition that includes not only the liberal-friendly upheavals of the Civil War and the Great Depression, but the writings of Thomas Jefferson and James Madison.

“The idea is that everyone within the political community should be relatively equal,” Sitaraman said. “It leaves open a really big question who’s in the political community? And that’s the fight that we’ve had over generations.”

Jefferson, in particular, comes in as a defender of such internal equality. In a letter to Madison, he claims to have “laid the axe to the root of Pseudoaristocracy” by banning primogeniture in Virginia and abolishing “entail” laws forbidding the division of agricultural estates. Elsewhere, he suggests “laying burthens on the richer classes, & encouraging the poorer ones,” develops a scheme for progressive land taxes, and calls for the government to give property to every man who does not already own at least 50 acres.

The founders also acknowledged that laws would need to change over time to preserve the egalitarian nature of the Republic, Sitaraman argues. He quotes an 1829 letter from Madison, in which the co-author of the Federalist Papers predicts that by 1930, an intolerable number of citizens will be “reduced by a competition for employment to wages which afford them the bare necessities of life.” At that point, “the institutions and laws of the Country must be adapted, and it will require for the task all the wisdom of the wisest patriots.”

The crisis Madison predicted came to pass in the form of the Great Depression, and American government survived by adopting Franklin Delano Roosevelt’s New Deal, which lifted millions out of poverty and subjected much of the economy to federal regulation. Sitaraman’s prescriptions for the current crisis are more modest. Taxes should be raised on the rich and redistributed to the poor, either as direct payments, or in the form of more robust social services. Tougher enforcement of antitrust laws would break up heavy concentrations of economic power. Campaign finance reform would reduce the threat of legalized bribery.

Unfortunately, none of these reforms will be possible for at least four years,  and they may already be too late. Donald Trump’s rapid rise to the presidency made plain America’s vulnerability to demagoguery. The symptoms of oligarchy have long been obvious in the workings of Congress, where intra-elite squabbles routinely sideline middle-class concerns. One particularly egregious example occurred in 2011. With the economy in the doldrums, the Senate spent more than six months battling over debit-card swipe fees, a fringe conflict between retailers and banks that had little to do with economic recovery. More recently, the Obama administration and Republican leaders expended tremendous effort trying to push through a trade pact that even its supporters believed would have only a minor effect on the flow of imports and exports  a deal that also would have helped corporate insiders challenge  profit-crimping laws and regulations before an international tribunal. 

But the depressing state of our politics should not detract from Sitaraman’s outstanding work. It is only April, and The Crisis of the Middle-Class Constitution may well prove to be the most important political book of the year.