‘We Are Not Taxing the Very Wealthy Enough’: Runaway Inequality About to Get Worse
The United States' astronomical levels of economic inequality are poised to become further entrenched in the coming years.
What happens — to democracy — when income and wealth concentrate?
A half-century ago, that question hardly seemed worth asking. In the decades right after World War II, Americans were living in a nation — and a world, for that matter — growing ever more equal.
But that America no longer exists. Robber barons once again walk among us. Grand fortunes once again tower over America’s social landscape.
Political scientists have noticed. They’ve begun generating a wealth of scholarship on wealth’s impact on our politics, and no researcher may be more central to that scholarship than Northwestern University’s Benjamin Page.
Six years ago, Page and the University of Minnesota’s Lawrence Jacobs co-authored Class War? What Americans Really Think about Economic Inequality, an in-depth look at 70 years of public opinion polling on wealth and opportunity in America.
Last year, Page and Princeton’s Martin Gilens released what one commentator has called the “first-ever scientific study” of whether our contemporary United States still ranks as a democracy.
And what did that study conclude? I recently explored that question and more in an interview with Page conducted off the Northwestern campus in Evanston, Illinois.
A good many pundits these days are wondering why Americans aren’t doing more to protest inequality. Most Americans aren’t protesting, one school of thought holds, because they admire the rich and want to become rich themselves. You’ve spent a great deal of time studying poll data. What have you learned?
Ben Page: That conventional wisdom is about half right. Average Americans really do like the idea of social mobility, of having a chance to get ahead. In fact, people have exaggerated ideas about how well they or their kids might do.
But we also have all sorts of evidence that people are really quite unhappy with the present high level of inequality and unequal opportunity.
The more complicated question: What do they want to do about it?
If you ask abstract questions about whether the government should take money from the wealthy and redistribute it, there is not a lot of support for that.
But if you ask about concrete policies — like taxing the wealthy at higher levels or getting rid of loopholes that favor hedge fund managers — average Americans turn out to favor many policies that would have strong redistributive effects.
On the spending side, we see lots of support for things like jobs programs, the earned income tax credit, and Social Security. Most people want to increase these programs — at the very time when many political figures and pundits are telling us you have to cut, cut, cut.
If you observe the United States right now, you discover that the average citizen has no detectable influence on policy. That’s not much of a democracy.
So do we have, in effect, a silent egalitarian majority?
Ben Page: Larry Jacobs came up with a phrase for our Class War book, “conservative egalitarianism.” Not so much egalitarianism in the abstract, but a great deal of desire for the government to make it easier for people to get ahead and to help those left behind.
You’ve observed in the past that most Americans don’t really realize how unequal we’ve become as a nation. How wide has the gap grown between inequality’s reality and public recognition?
Ben Page: There is a gap, but it’s not as big as it once was. People have figured out what’s happening. If you ask what proportion of the wealth is owned by the top 1 percent, the average person now comes fairly close, saying 40 or 50 percent.
But if you ask people what a CEO of a major corporation earns, they’re way low in their estimates. And likewise for hedge fund managers and even surgeons and other top professionals.
But what’s remarkable: Even with these income misperceptions, people still feel that individuals in high-paying positions should be paid less than they’re paid now.
Your recent work with Princeton’s Marty Gilens looked at the question whether the United States can rightfully claim to be a democracy. How do you go about scientifically answering a subjective question like that?
Ben Page: The subjectivity has a lot to do with what you think a democracy is. Marty and I start from the premise that democracy means a government that responds to the wishes of the average citizen. If you take that premise, it’s quite feasible to investigate this question objectively.[pullquote]Affluent people want some significantly different things from what the average person wants.[/pullquote]
But it takes a lot of work. Marty Gilens spent about ten years gathering and analyzing data on 1,779 different policy issues that faced the federal government over a 20-year period.
Marty basically compared what comes out of the political system with what different groups of people want. Affluent people, roughly the top 20 percent, turn out to want some significantly different things from what the average person wants.
Marty also gathered data on organized interest groups, and he separated business corporations and business groups from mass-based groups.
You can do two things with all these data. You can simply compare how often these groups get what they want, and that tells you something descriptive about democracy, if you want to call it that.
By that measure, average citizens get what they want roughly two-thirds of the time. On the other hand, if you look at affluent people, they get what they want almost all the time. And organized interest groups also tend to get what they want more often than the average person.
So that’s the descriptive part of this. But the tricky thing is figuring out who’s exerting the influence. These descriptive results really don’t tell you how much influence the average citizen has.
For that you have to use multiple regression analysis. You have to look at what happens when you consider all these groups at the same time. Which ones get their way when they disagree with the others?
When you analyze the data that way, it becomes clear that affluent people exert a lot of influence. Interest groups also have very substantial influence. That’s especially true for corporations and business-oriented groups.
The so-called mass-based groups, on the average, don’t represent the average citizen very well at all — and don’t have much impact anyhow.
What would be an example of a mass-based group?
Ben Page: Anything with a large membership, including the NRA, American Legion, ethnic and religious groups, and so forth. Most of these groups take positions that are somewhat out of touch with the average citizen, except for labor unions and AARP, which tend to be very close to what the average person wants but have much less influence than the Beltway wisdom says they have.
The bottom line we’re getting to here: If you take into account all these interest groups and affluent individuals, average citizens have no detectable influence at all upon federal policy. Rather amazing.
You’re currently coordinating a project that’s collecting data on the political machinations of America’s billionaires. Any surprises in what you’re finding?
Ben Page: It’s hard to study billionaires, because you can’t just knock on Bill Gates’s door and expect to get half an hour to talk with him. So what we’re doing is looking at all the public statements and recorded actions of billionaires, with “Web-scraping” techniques my colleague Jay Seawright developed. Anything that’s been reported and shows up on the Web, we’re organizing to develop systematic data.
We started out looking at the 100 wealthiest U.S. billionaires. Based on a Chicago-area pilot survey of multi-millionaires that the National Opinion Research Center did for me and Larry Bartels and other political scientists, we suspected that our billionaires would not be enthusiastic about things like taxes, social spending, or government regulation.
But we discovered that many of these billionaires, who could get quoted any time they want, actually go out of their way not to say anything in public about issues like these.
So we pursued this a little further. Are these billionaires apolitical? Is that why they’re not saying anything?
It turns out that’s not the case at all. A number of the billionaires who say nothing do a lot. They contribute large amounts of money to candidates and ideological PACs with definite policy positions, like cut taxes on the wealthy, privatize Social Security, or abolish the estate tax.
We call this “stealth politics.” Billionaires can influence what happens in politics without any accountability. They don’t even have to answer questions from journalists about why they favor what they favor. And that’s a serious problem for democracy.
The new book you’re working on carries the title Democracy in America. At what point does a democracy cease to be a democracy?
Ben Page: I would say there are degrees of democratic responsiveness. You can imagine perfect democracy, or a situation without any democracy at all, or anywhere in between. Drawing a line to say precisely when democracy begins would be arbitrary.
But if you observe the United States right now, you discover that the average citizen has no detectable influence on policy. That’s not much of a democracy.
Back in the mid 20th century, a period of much greater equality in America, the political science mainstream seemed to revolve around the notion of “pluralism,” the idea that we had many different actors — like business and labor — vying for political influence. Where does the political science mainstream flow today? How close to your perspective?
Ben Page: There’s been a big change since the pluralist days in the 1950s. That was during the Cold War, and you could be considered unpatriotic if you said anything about the United States that wasn’t wholeheartedly enthusiastic. In that era, David Truman and other political scientists made an argument that to some degree goes back to James Madison.
Madison worried about tyranny. He didn’t like democracy particularly, but he believed that popular control could help prevent government tyranny over what he considered natural rights.
And so Madison liked the idea of diverse interest groups, all contending for power. If you had a diverse large republic with many different interests, Madison felt that everyone would come out reasonably okay because different interests would offset each other.
The pluralists in the 1950s took that a step further, a step too far I think. You could read David Truman and think, gosh, the average American citizen really is doing great. Everybody’s interests are getting represented and everything’s coming out fine.
Almost no one today would openly make that argument.
We all understand that labels tend to oversimplify. But if you had to pick one label for the political system we have in the United States today, what label would use? Democracy? Oligarchy? Plutocracy?
Ben Page: To me there are two different ways to put it, and I’m not really positive where I come out. One would be “biased pluralism.” That is, you believe that politics works more or less in the way David Truman said, but you see big biases in representation. The average citizen has little or no voice, and business comes out way ahead.
But the bigger that bias is, of course, the closer we come to the concept of “oligarchy” or “plutocracy.”
My colleague Jeff Winters is really marvelous at analyzing oligarchy, but it’s not a term I use. Perhaps that’s because I’m a wishy washy liberal and it seems too alarming. But also because I want to stick close to the data that I have actually analyzed.
When Marty and I wrote our article for Perspectives on Politics, a big fuss on the Internet got going when somebody used the word oligarchy in a subject heading. A Princeton study, the bloggers were saying, showed that we have an oligarchy in the United States. Nice juxtaposition.
Now we don’t really show that with our study. We do show that the average citizen has no influence or almost none. But our study doesn’t show exactly who within the affluent has the most influence.
Logically, you would think that the more wealth people have, the more influence they would also have. So our findings are consistent with the possibility that a very small number of very wealthy people are exerting an awful lot of influence. That’s consistent, but we didn’t really demonstrate it with that study.
The creator of Downton Abbey, the wildly popular TV series on the British aristocracy in the early 20th century, is going to be doing a new series on America’s original Gilded Age of the late 19th century. Imagine that you served as the historical adviser for this series. If you had the role, what would you want Americans today to learn from the series?
Ben Page: You could have a lot of fun, of course, showing the lifestyles of the Gilded Age rich and famous. But I would hope that this new series also gives some picture of what was happening to the average person.
The original Gilded Age was not a good time for American workers. They were getting pushed around and shot at. They were paid low wages and faced terrible working conditions. There was little regulation of business practices, working hours, or even child labor.
But I also would want the series to hold out some hope that average people can do something positive about inequality. I’d like people to see that things can change — because, in fact, things did change in the United States, in two big waves of political action, the first during the Populist and Progressive period that started in the late 19th century, the second in the New Deal era.
The Populists and Progressives made really big changes. They won a progressive income tax, regulations on railroads and other monopolistic enterprises, the beginnings of federal regulation of the economy. Then the New Deal came in the 1930s and much more thoroughly did the same kinds of things.
It’s very easy today to get cynical and despairing about inequality. But I think that’s the wrong response, particularly if you look around the world. Not every nation has as messed-up a response to inequality as the United States.
The Social Democracies and Christian Democracies of Western Europe have suffered stresses, but their social welfare systems remain largely intact. These nations just don’t have the extreme inequality and the misery at the bottom that the United States does.
We beat back the original Gilded Age. What will it take to beat back our second Gilded Age?
Ben Page: It will definitely take mass mobilization. And that’s what the Populists were so terrific at. Starting in the South and the West with farmers’ cooperatives, they developed grassroots organizations that got people involved in politics and aware of what the big banks and railroads were doing to them.
But a lot of the ideas for economic and political reforms that originally came from the Populists weren’t enacted until the Progressives gained power.
The Progressive movement had two characteristics essential to making things happen. The Progressives operated in both major parties. The bipartisan symbols of that would be Theodore Roosevelt the Republican and Woodrow Wilson the Democrat.
The second characteristic: The Progressive movement operated as a cross-class alliance, across income and wealth categories.
You can’t do anything in the United States without having support from economically successful people. And the Populists learned that lesson. They resented even small-town bankers and many of the same people who later became leaders in the Progressive movement — and helped make things happen.
Now to have a cross-class alliance, you have to make compromises. Historically, some of the Progressive-era compromises weren’t great. A lot of working people actually became disenfranchised at the same time that women were getting the vote and senators were being elected directly. The nation saw changes that made urban politics in particular less democratic.
So creating a cross-class alliance can be tricky and difficult, but I think it’s essential. Nothing good is going to happen without an alliance that includes some wealthy people.
Is this an exciting time to be a political scientist?
Ben Page: I’m excited about the work I’m doing, but I think it’s a discouraging time to be an American. And that’s really the bigger concern for me. We have a lot of work to do to make things better.
Political scientist Ben Page discusses his research on the political preferences and power of the wealthy.
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