A Stable Democracy Must Provide an Acceptable Level of Living to Its People
We are in danger of losing our democracy because the distribution of income in our country has become too skewed toward the very rich. How can that be? What does the income distribution have to do with preserving democracy?
Forces within market capitalism produce conditions that make democracy unstable. Market capitalism and representative democracy grew up together, and most modern societies combine them in various ways. However, the combination of liberal democracy and market capitalism is fragile. It requires that the combined economic and political system deliver an acceptable level of living to most of the people. A system that fails to provide an acceptable level of living produces anger, frustration and status-anxiety among millions of working people. They come to see that the system they live in is rigged against them. They lose faith in the democratic polity, and they become subject to the appeals of demagogues like Donald Trump who promise (falsely) to "restore" their level of living or at least their dignity.
We have seen this process working in our own country as working-class incomes corrected for inflation have fallen in recent decades. Millions of manufacturing jobs have been eliminated and entire communities have been devasted. People are angry and resentful, and they are right to be angry and resentful. The system is indeed rigged against them.
The anger and resentment can easily be channeled in antidemocratic directions through appeals to the racism, xenophobia and sexism that exist in every society. Today's Republican Party is built on that combination. The party claims to represent the working class, although it offers no real solutions to that class's problems. The party has also generated support by deliberately fomenting the "culture wars.". Today's Republicans claim that our system is not really democratic because it has been taken over by shadowy "elites" who manipulate our elections to produce the results that they want.
For people who believe this claim, it makes sense to deny the validity of the elections and ultimately to use violence as we saw on January 6, 2021. So far, our democratic institutions have held up under these attacks, but the fragility of those institutions has become clearer and clearer. The marriage of representative democracy with market capitalism cannot survive unless the system provides an acceptable level of living to the majority of the people.
What is an Acceptable Level of Living?
What are the elements of an acceptable level of living in a stable democracy? In The Crisis of Democratic Capitalism, Martin Wolf suggests that they include:
- Prosperity
- Opportunity
- Security
- Dignity
Prosperity is a level of national wealth that can provide reasonable incomes to all of its citizens, but national wealth is not enough. There must also be opportunity for everyone who wants and is able to work to obtain a job that provides a reasonable income. Opportunity also means that system must provide real and widespread opportunities for people to move up and increase their incomes. In addition, the system must provide security against economic disasters. People lose their jobs because of events over which they have no control. People fall ill and require medical care. An acceptable level of living in a rich country must include protection against disasters like these. Finally, an acceptable level of living must provide all citizens with a feeling of dignity, a feeling of pride that they can fulfill their responsibilities and look their neighbors and their children in the face.
Security is also very unequally distributed. A worker who loses his/her job will likely get two-weeks’ notice, very limited unemployment benefits and even more limited opportunities for retraining. People who lose their jobs in the United States also lose their health insurance, and if they cannot provide it for themselves, they are vulnerable to financial disasters caused by illness. That is why health care costs are the number one cause of personal bankruptcy in the United States.
Finally, deindustrialization and other changes in our economy have robbed millions of people of their dignity. Millions of men can no longer provide for their families, and millions of single women with children are even worse off. The loss of dignity has led to epidemics of drug addiction and suicide. The loss of dignity may be the most dangerous failure of all. People deeply resent the loss of dignity, and when they do, they often turn to identities that seem to restore their it. They may for example, feel dignity because they are white or because they are Christians. Leaders like Mr. Trump emerge to ride the wave of identity politics.
Status Anxiety and the Instability of Our Democracy
Our economy’s failure to provide opportunity, security and dignity underlies the anxiety over loss of status that has been widely cited as a basis for white working-class resentment in our country. Many people know that their social status has been hard won and that it is not secure. Millions of people are a hairsbreadth from financial ruin. An unexpected illness or the loss of a job can ruin them financially, and with the loss of their money goes the loss of the social status that the money provided.
The Republicans have used racism, sexism and cultural tensions to mask the status anxiety's real cause, which is our system's failure to provide the working class with an acceptable level of living. The party has persuaded people that their problems are caused by the "elites" favoring non-whites and foreigners over "real Americans" and not by forces that are inherent in our capitalist system. Thus, the party has been able to persuade millions of people to vote for Republican candidates, but the candidates do not improve the lives of the people who voted for them. So, the anxiety increases, the tendency to resort of violence increases, and our democracy becomes more and more unstable.
How Can Redistributive Policies Help?
Redistributive policies can help by limiting the effects of concentration of income and wealth. Economic forces within capitalism drive an ever greater concentration of income and wealth. Consequently, opportunity, security and dignity become more and more tenuous for the bulk of the population. Redistributive policies can limit and even prevent this decline in the level of living of the people by providing income in kind. Redistributive policies use tax revenues to provide opportunity, security and dignity to the majority of the population. Affordable housing puts more money into the pockets of working people; a decent, national healthcare system reduces economic insecurity for everyone; a system of higher education that does not require people to shoulder enormous debts increases opportunity for the children of the working class; a real, national pension system restores dignity to all of us.
When people see that our system is not rigged against them, they are less likely to try to overthrow it. They may not abandon the racism or xenophobia in their hearts, but they no longer need to use racism or xenophobia to explain a suffering that they no longer feel. The forces that would overthrow our democracy are dissipated. If we are to preserve our democracy, we must understand that its fragility is inherent in the alliance with market capitalism. We cannot preserve our democracy by convicting Donald Trump of crimes, although we should certainly do that. We must recognize that his appeal is due to real injustices in our system, and if we wish to preserve our democracy, we must correct those injustices through redistributive policies.
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