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Inequality, Growth, and
Democratic Politics
Jacob S. Hacker
Director, Institution for Social and Policy
Studies, Yale University
Politics as key “channel”
• Democratic politics (free and fair elections)
• Growth, broadly understood
– Aggregate and distribution
– Beyond wealth and income, “shared prosperity”
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Politics as key “channel”
• Democratic politics (free and fair elections)
• Growth, broadly understood
– Aggregate and distribution
– Beyond wealth and income, “shared prosperity”
– Comes down to differing understandings of role of
government in promoting shared prosperity (i.e.,
is “drift”—failure of government to act--a
problem?)
• Yes, rent-seeking (how related to inequality?)
4
The Business of America is…Lobbying
(Expenditures in Billions of Real Dollars)
3.5
3
2.5
2
1.5
1
0.5
0
1983
1998
2009
But it’s not just rent-seeking
• Coalitional dynamics
– Cross-national literature – employers/labor
– More about distribution than growth
• Unequal influence
– Mechanisms?
6
Share of Campaign Contributions from Top 0.1%, 1980-2012
(Bonica, et al., Journal of Economics Perspectives, 2012)
Unequal Responsiveness
(Gilens 2012)
9
What the Rich Think: About
Government, For Example*
• The rise of the “working rich”
– Denial or neglect of common wealth (“You didn’t build
that!”)
• Masters of the universe (“job creators,” “superstars”)
• Increased cultural isolation
• Weakened connection to the American middle class:
Henry Ford (one-sixth of workforce in auto industry)
versus Steve Jobs (fewer than 50,000 U.S. employees)
• Notable lack of good data (highest income category in
GSS since 2006 = $150,000)
* With apologies to Marshall Sahlins: What Natives Think: About Captain Cook, For
Example
Less is More?
Cloture Filings to End Filibusters
Cloture Filings to End Senate Filibusters, 1919-2008
140
105
70
35
0
“In all cases where justice or
the general good might
require new laws to be
passed, or active measures
to be pursued, the
fundamental principle of
free government would be
reversed. It would be no
longer the majority that
would rule: the power
would be transferred to the
minority.”
—James
Madison on
Supermajority
Rules Beyond
Those in
Constitution,
Federalist
#58
It’s not just rent-seeking
• Coalitional dynamics
– Cross-national literature – employers/labor
– More about distribution than growth
• Unequal influence
– Mechanisms?
• Preference “distortion”
– Or “Where’s the outrage?”
• Partisan priorities (and polarization)
13
14
It’s the Economic Elites, Stupid!
• Elite changes at three levels:
1. Shifts in character of economy (deindustrialization,
financialization)
2. The changing fortunes & character of the economic elite
(free agency, “IBG/YBG,” “eat what you kill”)
3. Shifts in business political representation
4. Increasing social isolation?
• Globalization is part of this, but politics & policy
matter a great deal
– Very important: “losers” are wiped out!
Share of Occupations in Top 0.1 Percent
(incl. Capital Gains), 2004
Source: Bonica, et al., Journal of Economic
Perspectives, Summer 2013.
Share of Campaign Contributions in Federal Elections
from top 0.1 Percent, 1980-2012
What the Rich Think: About
Government, For Example*
• The rise of the “working rich”
– Denial or neglect of common wealth (“You didn’t build
that!”)
• Masters of the universe (“job creators,” “superstars”)
• Increased cultural isolation
• Weakened connection to the American middle class:
Henry Ford (one-sixth of workforce in auto industry)
versus Steve Jobs (fewer than 50,000 U.S. employees)
• Notable lack of good data (highest income category in
GSS since 2006 = $150,000)
* With apologies to Marshall Sahlins: What Natives Think: About Captain Cook, For
Example
Feedback loops could be crucial
• Public distrust/lack of confidence/cynicism more than
conservatism
– Collective action problem: faith in government is public good;
politicians, even strong Democrats, have limited incentive to
articulate case for government and strong incentive to run
“against Washington”
• Retreating from visible active government
– Lots of evidence voters don’t understand or particularly like
indirect policy tools.
– Less evidence but some that really colors people’s views of
government and their capacity to see what’s at stake
• Self-interest, poorly understood: Political withdrawal, loss
of supportive organizations (esp. unions) and cues for less
affluent voters, racialized backlash
Public Trust and Public Support for Active Government
Active Government Mood (Stimson)
Mean of AGM
Trust (ANES)
Trust (Gallup)
9/11
80
70
65
60
50
Mood
60
40
55
30
20
50
10
45
0
1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009
Trust: "How much of the time do you think you can trust government in Washington to do
what is right?" Aggregate of "just about always" or "most of the time"
Percentage Trusting Government
70
The balance of positive and negative statements
about government in the Public Papers of the
President (10-Yr Avg)
-5
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
-15
-25
-35
-45
-55
-65
-75
-85
-95
-105
-115
-125
1st Edition (1948)
No longer is modern man able to believe
“that government governs best which
governs least.”…[W]here the complex
economic conditions of life necessitate
social coordination and planning, there can
sensible men of good will be expected to
invoke the… government.”
4th Edition (1958)
“No longer does modern man seem to act as
if he believed: “That government governs
best which governs least”… [rest is the
same]
9th Edition (1973)
Cut entirely.
“I don’t care who
writes a nation’s
laws –if I can write
its economics
textbooks.”
Gaps in Voting in Rich Democracies (2006)
Source: Streeck and Shafer, Politics in the Age of Austerity. Predicted
probability for top and bottom quintiles, holding constant age, gender,
political interest.
Are the Rich Better Off Than They
Were Four Years Ago?
Effect of income growth at top and middle on probability of
voting for incumbent presidents, 1952-2008
0.12
0.1
0.08
0.06
Coefficient on Mean
Income Growth
0.04
0.02
Coefficient on TopIncomes Growth
0
-0.02
-0.04
Low-Income Voters
Middle-Income
Voters
What Might Disrupt Loops?
New “narratives”/“framing” aren’t going to do the
trick—lesson of the foregoing is that ideas need
influential carriers.
1. Making the American political system more
majoritarian (filibuster reform, getting more
people to the polls, e.g.)
2. Augmenting forces of moderation (Where to find
them? How to empower them?)
– Information/technology to the rescue?
3. Fostering long-term (not election-to-election)
mobilization
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