Democracy and Inequality

Though I have never read her book, several years ago I listened to an interview with Loretta Neopoltani, author of Rogue Economics.  The interview ranged over many topics, but the central theme remained constant.  We rightly celebrated the fall of the Soviet Union and the collapse of communism in Europe.  We trusted that this event would bring about the spread of freedom and democracy into places where it had not visited for many years.  So far, so good.

What Neopoltani stressed, however, is that this was not the whole story.  History tells us that in every significant breakdown of major power structures, rogue elements (be they ancient or modern day barbarians) will always have the advantage.  The shift towards democracy will be painful and slow.  The law-making process will always plod along.  Not only that, the spread of freedom means the spread of opportunity.  And since chaos comes easier than order, nascent democracies will see the rise of exploitation and even slavery.  Historically, we can think of the rise of slavery in the Renaissance after the Black Plague decimated feudalism, or the increase of slavery in the south after the American Revolution.  In more recent times we see the rise of the sex-trafficing industry from Eastern Europe after the fall of communism.

All this raises the question in general of democracy’s relationship to inequality.  Perhaps democracy merely grants opportunity, which can be used for good or ill.  Is democracy able to practice what it preaches?

Recently authors Daron Acemoglu and James Robinson published this article with links to other studies within it.  They reach mixed conclusions, stating that while democracy does transfer power away from elites, it may not do much to reduce inequality.   When confronted by this, we can reach one of two basic conclusions:

  • We can be hopeful/naive (depending on your point of view) and think that in time, democracy can learn to create a truly free and equal society.  Those of a more liberal/progressive bent might hope that increased government action, done with popular support, could help us achieve this.
  • Or we can believe as De Tocqueville did, that democracies must choose between liberty and equality, for they cannot have both in equal measure.  Liberty unchecked would create winners and losers, with the possibility of vast gaps in between.  Pure equality could grant no liberty to anyone to step out of line or distinguish themselves from their fellow men.  You cannot be married and single at the same time.  If we want a society with opportunity and liberty, we must tolerate and expect some kinds of inequalities.  C.S. Lewis began his excellent essay, “On Democratic Education” with these words (the whole essay is here),

Democratic education, Aristotle says, ought to mean not the kind of education democrats like, but the kind that will preserve democracy.

I find this analysis persuasive, and it may be one of the keys to understanding the chaos of the French Revolution, which proclaimed “Liberty, Equality, and Fraternity” for all.  These opposing ideas would inevitably create chaos and dissension even with the revolutionary leaders themselves.  We see this rift even at the very top of the revolutionary elite between Danton and Robespierre.

Hardly anyone, however, wants to choose between these two options, and perhaps with good reason.  We should reject radical redistribution, but democracy cannot exist without a healthy middle class.  Aristotle wrote in his Politics,

Now in all states there are three elements: one class is very rich, another very poor, and a third in a mean. It is admitted that moderation and the mean are best, and therefore it will clearly be best to possess the gifts of fortune in moderation; for in that condition of life men are most ready to follow rational principle. But he who greatly excels in beauty, strength, birth, or wealth, or on the other hand who is very poor, or very weak, or very much disgraced, finds it difficult to follow rational principle. Of these two the one sort grow into violent and great criminals, the others into rogues and petty rascals. And two sorts of offenses correspond to them, the one committed from violence, the other from roguery. Again, the middle class is least likely to shrink from rule, or to be over-ambitious for it; both of which are injuries to the state. Again, those who have too much of the goods of fortune, strength, wealth, friends, and the like, are neither willing nor able to submit to authority.

The evil begins at home; for when they are boys, by reason of the luxury in which they are brought up, they never learn, even at school, the habit of obedience. On the other hand, the very poor, who are in the opposite extreme, are too degraded. So that the one class cannot obey, and can only rule despotically; the other knows not how to command and must be ruled like slaves. Thus arises a city, not of freemen, but of masters and slaves, the one despising, the other envying; and nothing can be more fatal to friendship and good fellowship in states than this: for good fellowship springs from friendship.

When the gap between the wealthy and everyone else grows too great, must we then rely on some form of redistribution to balance the scales?  And if so, who would possess the wisdom to decide how much redistribution, and from whom, should take place?  That process could cause just as many problems as the problem itself.

Ultimately Aristotle, with his emphasis on friendship, and De Tocqueville, with his emphasis on the necessity of virtue to secure freedom, have it right.  If the rich practice avarice, and the rest of us covet, we will be left with neither democracy nor liberty.  Liberty itself can only create opportunities, not virtue.