Winner-Take-All Politics

Winner-Take-All PoliticsIn a lot of discussions of income inequality, people note that the huge rise in inequality over the last 35 years happened in both before and after tax income. Thus, like Estragon in Waiting for Godot, they claim, “Nothing to be done!” Jacob S. Hacker and Paul Pierson in Winner-Take-All Politics discus income inequality entirely from a political standpoint. And this is the right way to look at it.

We already know that money makes money. If you have a bank, it does not take great skill to borrow money from the Fed for nothing and loan it out for more. Similarly, having lots of money is often a prerequisite for investing in the best opportunities. The Facebook IPO was for suckers with their hundreds and thousands of dollars. If you had tens of millions, like Bono, then you could have invested in Facebook a couple years earlier and made a billion.

So the question is how the government makes the rich even richer, so that they will have an even bigger advantage to collect even more. Winner-Take-All Politics describes it like this:

What if the modern economy looks less like an open sea, where rising water lifts all boats, and more like a system of locks, where those who don’t get through the gates are left behind? Yachts are rising, but dinghies are largely staying put, locked out (so to speak) from higher waters. Indeed, in this alternative scenario, there is reason to suspect that the dinghies are staying put in part because the yachts are rising—that the rich are closing the locks behind them to capture resources that would otherwise have enhanced the living standards of everyone else.

The authors talk in great depth about the two powers that balance a democracy: the wealthy trying to enrich themselves and the poor passing laws to redistribute wealth. In general, through its history, the United States oscillated with the waxing and waning of these forces. But over the last 35 years, we have seen our political system tip far toward the wealthy. They note that the decline in union power is most disturbing because unions provide the only real organized counterbalance to the power of rich corporate interests.

They also note that this idea is nothing new:

Since the first stirrings of democracy, virtually all its greatest theorists have recognized this. From Aristotle to Alexis de Tocqueville, from Plato to Thomas Paine, those who have contemplated what makes democracy tick have invariably expressed concern about its coexistence with sizable gaps in economic standing. The Roman priest Plutarch set the tone when he noted, “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” Charles de Montesquieu, whose The Spirit of the Laws was a central text for many of our nation’s Founders, identified “real equality” as “the very soul of democracy,” though he conceded that in practice democratic republics could only “fix the differences to a certain point.”

There is too much in this book to discuss. Whenever I read any book, I book dart interesting parts. My copy has over 100 book darts in it. I’m sure I’ll come back to it. In fact, this is not the first time I’ve written about the book. But if nothing else, we should all listen to the broad argument of Winner-Take-All Politics.

The rich have gotten very organized and the poorer classes simply cannot compete. That is, unless we organize. And it is in this way that Hacker and Pierson take a sobering book and pull off an inspiring ending. I’m not much a joiner, but I’ve decided that I need to join Common Cause. At least. And I think all of you should too.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

2 thoughts on “Winner-Take-All Politics

  1. I read this book a while ago and I agree that it is a good read. I found it particularly interesting how the authors traced the beginnings of mass income inequality to the late seventies. I always thought Reagan was to blame, though he did put it on overdrive…
    I loved the Scarlet O’Hara defense too. We see this all the time in politics, voting down a bill because some detail is not right. Remember when cannabis legalization came up in Cali back in 2010. Nearly half of the people voting against were in favor of legalization but the bill wasn’t "perfect" (when are they?) so they voted nay. Talk about shooting yourself in the foot.

  2. @Andy – Actually, the process started even earlier than Carter. The government started dismantling unions in the 1950s. It was only in the last 70s that we really started seeing the results.

    I wanted to include the O’Hara defense: I’ll think about it [i]tomorrow[/i]! But as I said, there was so much in the book and I really needed to get something out. Too often when there is a lot I want to talk about in a book (e.g. [i]The New Jim Crow[/i]) I end up not writing about it at all.

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