At Democracy in America, Will Wilkinson makes some good points in arguing that America is not a plutocracy. I am sympathetic to his assertion that the specific nature of the highly skewed distribution of wealth in America “actually reflects the fact that American institutions are unusually conducive to innovation and the creation (as opposed to the expropriation) of immense wealth.” The wealthiest 1% in the US, taken as a class, differs in character from the more feudal-type ruling class in societies such as those in Latin America that he focuses on. But I think that he is too quick to dismiss the significance and implications of the huge gaps in wealth distribution.
He claims that, “America is a relatively healthy and functional democracy.” It’s difficult to reject this entirely because the word relatively allows a lot of wiggle room. The question arises: relative to what? Other foundering democracies? The example of Meg Whitman losing her bid for the governorship of California may show that the health of America’s democratic system could be worse, but it doesn’t persuade me that America’s democracy is healthy.
Wilkinson then says that the “historically most typical cause” of income inequality “is the concentration of political power in the hands of a predatory elite.” He goes on to list five primary reasons for income inequality in America that don’t involve political predation. I accept that the five reasons he lists account for some of the income inequality, perhaps even a considerable share.
But I think that manipulation of the political process plays a large role as well. I mentioned in my previous post a recent Bloomberg article about lobbying by health insurers. It seems to me that the health care industry in the US reaps huge profits partly through the kind of oligarchic expropriation of wealth that Wilkinson seems to deny is a problem in the US.
Without going through a laundry list of other examples, I think it’s fair to say that many industries and special interest groups use their wealth to game the political process to their advantage in myriad ways that amount to wealth expropriation from those who don’t have access to copious surplus wealth. And I consider the enormous expenditures on the surveillance–security state to be a particularly distasteful form of wealth expropriation, especially when viewed against the backdrop of deteriorating infrastructure, a deteriorating social safety net, and the mediocre-to-poor quality of education available to most of the people who are not wealthy.