Is our democracy up to the task?

Economic, social challenges are mounting up

By Richard D. Lamm and Dottie V. Lamm

reprinted with authors’ permission

“It wastes, exhausts and murders itself. There was never a democracy yet that did not commit suicide.”

- Founding father John Adams

We believe that a new, profoundly disturbing question has arisen in American public policy: Is our political system structured to be able to solve the problems the nation faces? Can we do politically what we must do economically, ecologically and socially to leave our children a workable and decent society?

Before you discard these questions as heresy, remember many of our most famous Greek philosophers felt that democracy was not a sustainable form of government. We pray we prove them wrong, but can we ever stop the slide toward national insolvency, which will collapse the dollar and undercut the economy?

While different studies produce different figures, most of the experts and organizations that worry about the national budget agree that we are passing on to our children debts higher than the total worth of the public and private wealth of the country. The Concord Coalition puts the national debt plus the unfunded liabilities at more than $70 trillion, substantially more than the nation’s total assets. We are clearly the most fiscally irresponsible generation in American society, and neither political party can take even modest steps to balance the budget.

Every dime of the war in Iraq, the recovery from hurricanes Katrina and Rita, every dime of the new avian flu program and a thousand other federal programs we callously sloughed off to our children and grandchildren to pay. Some of these programs may indeed be worthy, but when we cut taxes without cutting spending, we pass the burden along to our children. To our mind, the only honest political platform is: “We are going to cut your benefits and increase your taxes.”

Before you smile at our naiveté, let us suggest that is the only solution that will save our great nation from bankruptcy. We have made promises far beyond our ability to deliver and left the political consequences to our children.

One basic problem we refuse to recognize is that the New Deal is demographically obsolete. Medicare, Medicaid and Social Security are the most politically popular programs in America, and none of them are sustainable without major, political career-destroying amendments. We are living too long and not having enough children to sustain these programs, yet we are paralyzed to act. By 2030, there will be twice as many elderly and only 18 percent more children, and these three programs alone will crowd out all the rest of federal spending.

The programs bankrupting America are programs for the elderly paid for by today’s workers. These programs slowly but steadily put new impossible burdens on these workers’ kids, our kids and everybody’s grandkids. We are seeing workers paying 15.3 percent of their wages into programs that benefit seniors who make more in retirement than most people do working full-time.

We, the elderly, are the real “welfare queens” of American public policy because we are 13 percent of the population but get 60 percent of federal social spending, much of it subsidizing the well-off elderly. A new social policy should transfer money from the affluent to the poor, not from the young to the old, but try to tell that to the AARP. Consequently, day by day, decision by decision, budget by budget we consign our nation’s children and grandchildren to economic chaos.

The second democracy-defying question eclipses the first: How do we leave our children a sustainable ecosystem? Our whole economy incorporates the assumption of infinite resources and endless growth. We are now surrounded with evidence that increasingly shows that something is fundamentally wrong with the growth paradigm.

Our globe is warming, our forests are shrinking, our icecaps are melting, our coral is dying, our fisheries are depleting, our deserts are encroaching, our finite water supplies are under more and more demand. We suspect these to be the early warning signs of an Earth approaching its carrying capacity. We cannot merely call upon human ingenuity, science and technology to develop new solutions to these new challenges. Technical know-how is not wisdom. It is important, but it is not enough. We must be more than technically proficient; we must instead change our economy, our consumption culture and, most important, our mental map of the world.

We doubt that there is any way the rest of the world can live at anything close to the American standard of living; indeed, we doubt that 300 million Americans can. Our hubris notwithstanding, we ultimately must live and prosper within a limited and increasingly overstressed and fragile ecosystem. We cannot meet all the world’s needs and aspirations within our ecosystem. It is true that economy and development have been indispensable to human welfare. But the profound truth is that ultimately our ecosystem trumps our economics. Starkly put, our current patterns of wealth creation and consumption are outdated, outmoded and destructive.

It is no great feat to sustain a democracy when we are distributing the riches of a virgin, resource-rich continent. With notable exceptions during wars and depressions, our political system gave voters more and more benefits every decade. When we couldn’t pay for those benefits, we started to put them on our children’s credit card. No big deal if we add debt temporarily for a short-term crisis, but debt is “economic cocaine,” and we have become addicted to debt. We are haunted by the fact that every generation of Americans until ours has left their children a better America. Our generation however, is leaving gargantuan problems to the future. Our worst nightmare is that these problems might be beyond the ability of democracy to solve.

Thoughts on Wealth and Democracy

By: Joel Dyar

The role of wealth in strengthening or subverting democratic systems has been of interest to scholars since Aristotle first broached the subject in the fourth century BCE. In today’s post-everything society, human beings have and continue to be subject to a historical process that is draining wealth from the many and reapportioning it in the hands of the few. A few facts shall confirm the existence of this process and give us context within which to consider its many implications:

• In 1774, the richest 1% of the populace owned 15% of all wealth. By 2001 the top 1% had consolidated control of more than 40% of all wealth (1).

• If we extend our consideration to the richest 20% of U.S. households, we find that in 2001, on the heels of a Skull v. Bones election for the Presidency and unprecedented political campaign spending nationwide, this demographic was in possession of 84.4% of all wealth (2).

• While living standards in the U.S. have improved since World War II, the “rising tide that lifts all boats” has carried a few boats quite far, and left the rest to float out to sea. 80% of Americans have had real wages stagnate or decline since 1973. An average worker earning $308.03 a week in 1973 earned $260.37 in constant dollars in 1991.

• At the same time the American middle class was experiencing declining real wages and the rising costs of inflation and exploding per-capita consumption, their government was helping them relieve the top 1% of its tax burden. Between 1977 and 1992, the effective federal tax rate for the richest one-percenters fell from 35.5% to 29.3% (1) The Bush II tax cuts have further exacerbated this gap while compassionately and conservatively driving the national debt into record territory.

• The federal government has spent $4.5 trillion on “Defense” since WWII, far more than accompanying investments in the kind of infrastructure relevant to the average worker. This spending has been primarily to the benefit of hi-tech and elite-dominated industries that employ only a minority of the populace and are demonstrably poor at re-circulating wealth.

The Role of Wealth in Democratic Political Theory

Aristotle, our first great democratic theorist, argued that a society with a large “middle” class would be well disposed to guard against the tyranny of the few and the potentially destabilizing demands of a large impoverished class. A large middle class would moderate and extend discourse, more efficiently use resources to translate mass interest into political action, and exist independent of coercion resulting from the concentration of wealth by elites. A powerful middle class would increase the likelihood that the laws and structures of government would favor the equal distribution of society’s riches; a goal enshrined in the U.S. Declaration of Independence. The solidarity and common experience of this demographic would also service the social bonds of cohesion, security and trust needed for a free and healthy society.

Jean-Jacques Rousseau, writing in 18^th century France, joined in Aristotle’s conclusion that economic conditions could impact the viability of democracy. His assertion that human beings must first be economically independent, and equal in both their degree of independence and their ability to translate resources into political action, concurs with Benjamin Franklin’s less repentant view that “no man ought to own more property than needed for his livelihood; the rest, by right, belonged to the state.” Ben Franklin was no utopianist or Communist, and neither was John Adams when he described the European experience: “economic power became concentrated in a few hands, then political power flowed to those possessors and away from the citizens, ultimately resulting in an oligarchy or tyranny.” Recognizing that not all poverty, and certainly not all wealth, resulted from the labors or failures of the individual, Thomas Paine suggested that a tax on inherited wealth could fund a social-security like program for those without the benefits of fortune.

The Political Economy of Inequality

Adam Smith provided us with an economic model where the narrow self-interest of producers and consumers could be harnessed for the benefit of society. He rightfully cautioned us that producers might rather collude than compete, and that their collusion would constitute a threat to the openness and equal playing field of the system. Collusion between producers would negate the presumed efficiency of Capitalism, and drive prices as high as could be gotten away with. Even worse, the “effective demand” of rational, monopolistic interests will subsume that of less powerful individuals, provided that the system does its job and goes where the money is. This analogy is relevant to our discussion of democracy. Government-market comparisons seem all the rage in this Era of Globalization, with government touted as the producer and the citizen the consumer. If an aggregate of interests in society can wield greater effective purchasing power in that society, say by copiously funding the campaigns of the highest officials, mobilizing groups in civil society and using their tremendous resources to “educate” the public, we should not be surprised when government responds with a product that reflects this. It is only when our concern for responsiveness and the needs of the many enters this equation that trouble arises. With this fundamental tenet of democratic governance in mind, we find that societies with a high degree of inequality are massively inefficient in their allocation of resources.

Caveats and Other Concerns

Concentrated centers of power in society, as symbolized by the modern corporation, have far greater resources with which to influence the product of government than those with less effective “purchasing” power, i.e. the citizen who must suffer the outcomes of this process. The modern corporation has refined the techniques of psychological manipulation to a degree unprecedented in human history. We call this the advertising industry, and the increasing reliance on its instruments to support campaigns from congressional elections to the Bush administration’s run-up to the invasion of Iraq should warrant great concern. No social contract can be said to exist without the free and independently considered consent of the governed, and that consideration must be free from manipulation in any form. So-called psy-ops, if legitimate at all, should be constrained to the realm of war and not imposed on domestic populations by any agent.

Additionally, the dilemma of state complicity in facilitating this imbalance in the distribution of wealth is serviced by a number of other factors:

• Low voter turnout, wedge or diversion issues (abortion, hollow anti-government rhetoric and the “three G’s” – god, guns and gays), disillusionment with corruption, and the phenomenon of “anti-politics” make this process far easier

• The nature of government in the modern era – remote, technocratic and just plain big, means that most citizens will be unable to engage and understand the full breadth of its activities

• A two-party system dominated by elites increases the chance that, whether the electorate favors the rhetoric of business or of populism in a particular election, policies will likely reflect the interests of those elites chosen for office

• The concentration of power in government and business readily facilitates the generation of additional wealth; we face a self-perpetuating dilemma

In the words of Jared Diamond, the renowned biogeographer and best-selling author of Guns, Germs and Steel and Collapse: How Societies Choose to Fail or Succeed:

“…some people may reason correctly that they can advance their own interests by behavior harmful to other people. Scientists term such behavior “rational” precisely because it employs correct reasoning, even though it may be morally reprehensible. The perpetrators know that they will often get away with their bad behavior, especially if there is no law against it or if the law isn’t effectively enforced. They feel safe because the perpetrators are typically concentrated (few in number) and highly motivated by the prospect of reaping big, certain, and immediate profits, while the losses are spread over large numbers of individuals. That gives the losers little motivation to go to the hassle of fighting back, because each loser loses only a little and would receive only small, uncertain, distant profits even from successfully undoing the minority’s grab (3).”

Conclusion

Clearly, this work only addresses the most superficial dimensions of the wealth-democracy dilemma. Readers interested in learning more are encouraged to pick up a copy of Keven Phillips’ Wealth and Democracy: A Political History of the American Rich.

Citations

(1) http://dwardmac.pitzer.edu/dward/classes/powpart/silentdepression.html

(2) http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/income&wealth.htm

Joel Dyar is a Senior Political Science Major at Mesa State College in Grand Junction, Colorado. His scholarly interests include True Cost Economics, social justice in governance and globalization, corporatization, world politics and normative Buddhist political thought.