What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Ever since the rise of the Occupy Wall Street movement in September 2011, intellectuals and politicians have sought to blame rising income inequality for a host of economic, social, and political problems. They have not, however, had great success in proving their case scientifically. Claims that the widening gap between the top earners and the rest of society stanches economic mobility, for example, have not proven to be true.
Other claims that rising income inequality is a harbinger of perilous macroeconomic instability have also not panned out. Estate tax repeal, in particular, was surprisingly popular even among those who were unlikely to benefit from it; 62.9 percent of those with family incomes of less than $50,000 supported full repeal.
But the claim that growing inequality threatens our democracy—arguably the most dangerous possible consequence of inequality—still looms large in the public square.
The popular contention that income inequality is turning our democracy into an oligarchy that serves only the rich is buttressed by several well-cited, but fundamentally flawed, academic studies. In fact, claims that rising income inequality threatens our democracy are unfounded. There is no evidence that the rich have greater political influence during times of greater economic inequality. By making poorly founded assumptions about the opinions of the top 1 percent, magnifying the narrow political divide that does exist between the classes, and exaggerating the influence of the affluent, certain political scientists have painted an unduly grim portrait of American democracy.
While it is undeniably true that some have more access to power than others, income alone is a poor predictor of proximity to power. And while it is neither possible nor desirable to level the political playing field perfectly, it is possible to lower the stakes of the game by reducing the federal government’s power to pick winners and losers in the marketplace.
- Academic studies of income inequality exaggerate the influence of the affluent and magnify the political divide between the affluent and the rest of society.
- The federal government’s overweening power allows it to pick winners and losers and intervene in Americans’ private affairs and lawful life decisions.
- If the government were kept within its constitutional limits, Washington insider status would not count for nearly as much as it does now.