Goodbye to All That Democracy

(Jason DeCrow/dapd via AP)

Occupy Wall Street protests in New York's Financial District in September 2012

The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman
Knopf

This article appears in the Summer 2017 issue of The American ProspectSubscribe here

“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” —Plutarch (c. 46–120 ce)

“We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both.” —Louis D. Brandeis, U.S. Supreme Court justice (1856–1941)

There ought to be a German word for the unpleasant feeling that comes when one’s dire predictions come true. Schmerz-Prognose: pain in premonition. Something like that feeling likely overcame Vanderbilt law professor Ganesh Sitaraman at around 10 p.m. on November 8, 2016, when a demagogue with kleptocratic tendencies won the White House. Sitaraman essentially predicted as much—and worse—in his new book, The Crisis of the Middle-Class Constitution.

There are plenty of theories for Donald Trump’s victory: misogyny, nativism, cultural anxiety, economic insecurity, and the decline of shared cross-partisan media sources. Sitaraman doesn’t rebut any of these, but makes a different, more dire structural argument: inequality and stable democracy don’t mix.

According to Sitaraman, in an epically unequal society, with a constitution built for equality, we won’t last long. Unless something changes quickly, we may experience revolution, instability, coup attempts, and violence, common fates of unequal societies. More likely, he writes, “either the republic will transform into an oligarchy, or the people will be seduced by an authoritarian demagogue.”

Just how unequal are we? For generations, the American middle class was the majority of Americans—no more, as of 2015. The top 1 percent owns more than 30 percent of America’s wealth. The poorest half owns just 2.5 percent. Wall Street bonuses alone are twice the amount of all the combined earnings of minimum-wage workers in this country. We are grotesquely, bizarrely, grossly unequal—unequal in cash, health care, schooling, and access to clean air and water. Unequal in our access to power. And we are becoming more unequal by the year: Since Ronald Reagan became president, the income of the wealthiest 1 percent of Americans has doubled.

Sitaraman posits that we simply don’t have the right kind of constitution to withstand this degree of inequality. He argues that there are two kinds of constitutional structures: Class Warfare Constitutions and Middle-Class Constitutions. Class Warfare Constitutions—like those of ancient Rome, England, and Florence—assume inequality. These constitutions were designed with an eye to channeling a natural antagonism between the very rich and the poor into nonviolent mechanisms for negotiation. Both rich and poor accept these channels as conditions for the freedom from violence and instability that threaten the rich, and the freedom from despotism and arbitrary power that threaten the poor. Some used devices like class-specific representative chambers to give different classes political clout; some used devices like lotteries to ensure that even the poor get a voice.

The second kind of constitution, the Middle-Class Constitution, depends upon relative equality across the classes, and especially a strong middle class. Representation is designed to channel different cross-class interests, not warfare between the classes. America, Sitaraman says, has this kind of constitution. For instance, we have a Senate and House, but no property requirements for either, no expectation that elective office will be filled by the wealthiest. We don’t use lotteries to choose our representatives, only our jurors. Unlike other countries with other constitutions, we cannot survive inequality, because we were not planning for it.

James Harrington, a utopian 17th-century thinker, appears throughout the book as the underappreciated visionary behind the American Constitution. In Harrington’s book, The Commonwealth of Oceana, he laid out a plan for society, one where property is evenly distributed. Harrington’s basic law of politics is that power follows property ownership: unequal property ownership leads to unequal power, and vice versa. Harrington appears to go one step further than Sitaraman—he argues that freedom depends upon an equal distribution of property. Unlike Sitaraman, he countenances only one kind of successful constitution—the middle-class kind. Harrington believed that inequality introduces luxury, and luxury leads to displacing reason and justice.

The early Americans could be Harringtonian—as defined by Sitaraman—and avoid a class warfare constitution because of the astonishing equality that already existed in the country. In revolutionary America, the country was thinly populated with a strong agrarian base. It had neither extreme wealth nor extreme poverty, no titles of nobility or hereditary aristocracy. Sitaraman calls on a huge array of colonial thinkers from across the country and the European continent, emphasizing the classlessness of America, and the special chance for freedom that it provided. These economic conditions, he argued, meant that American republicanism and American liberalism were simply different than the same strains of thought in old Europe. Because of these different material realities, “[t]he Harringtonian tradition merges republican and liberal themes” in America, and we need not see liberalism and republicanism as opposite to each other.

Throughout American history, Sitaraman demonstrates a common thread that connected the Jacksonians, the Republicans during Reconstruction, the populists, the 20th-century progressives, and FDR’s crew, in which otherwise divergent thinkers have tied our Constitution to our economy. Even if he is cherry-picking—and sometimes conflating different strands of thought—there are bucketloads of great cherries. He recounts the great Daniel Webster, arguing in 1820 that America’s heritage was founded on equality, and that the “natural influence” of unequally distributed property was to despotism or violence.

Sitaraman, who is a policy adviser to Elizabeth Warren and senior fellow at the Center for American Progress, brings a fresh eye and an impressive range of historical thinking to an ageless question: What are the conditions for freedom? He tours the intellectual struggles of the 19th and early 20th centuries, as progressives worked to reconcile industrialization and democracy. He gives us a glimpse of episodes that led to the progressive creation of the income tax, the development of antitrust laws and enforcement, the creation of a welfare state … and through the demise of those achievements—a generation in which we’ve reduced taxes, stopped investing in public infrastructure, and stopped enforcing antitrust. According to Sitaraman, we’ve lost the policies essential to the preservation of the middle class.

So what do we do when the conditions upon which a country was founded no longer hold? We could give up on equality, and adopt a class-warfare approach, which Sitaraman opposes, or we can ring the alarm bells and adopt massive structural change across society. He argues that structural reforms are the key. While Sitaraman is convincing in his analysis, he is most convincing at the broad level—support labor, break up monopolies—and least convincing when it comes to the precise structural changes he suggests, because they seem small next to the depth of the crisis he has terrified us with. Reinstating Glass-Steagall, while important, seems unequal to the task of reviving American egalitarianism. When it comes to funding elections, he explains how privately funded elections corrupt policymaking, but does not propose shifting to publicly funded elections. Instead, he explores ways to limit the revolving door and provide lobbying services to underserved communities. This seems like weak gruel for a society in crisis, especially when he reminds us that Rome went from a stable republic to civil war in just 53 years.

The book is at its finest when addressing the structure of public thought and how it has changed. Sitaraman tells the stirring story of FDR’s attack on plutocracy, and also how FDR believed that the “common task of statesmen and businessmen” was the “creation of an economic constitutional order.” By separating economic and constitutional thinking, the crisis of voting and the crisis of inequality, we betray both our history and basic truths about society.

Perhaps one of the most difficult and interesting areas is one that Sitaraman skips over too lightly. What is the distinction between property and wealth? Sitaraman assumes that property and wealth play the same role in democratic theory. He argues that one of Harrington’s flaws is that he speaks only of property, not wealth, and ascribes the mistake, as he calls it, to the way in which wealth presented itself in Harrington’s time.

But perhaps Harrington’s focus on property, not wealth, is not an accident. Property and wealth, though related, have played different roles in democratic theory throughout history. For instance, in The Human Condition, Hannah Arendt traces the modern tendency to conflate the two. Property, according to Arendt, historically created conditions for citizenship by creating a private space for the citizen, and creating conditions of freedom. “[P]roperty, as distinguished from wealth and appropriation, indicates the privately owned share of a common world and therefore is the most elementary political condition for man’s worldliness.” Wealth was both less permanent and less privacy- and freedom-giving. Whatever one thinks of Arendt’s critique, Sitaraman’s book would have benefited from a fuller development of the complicated relationship between property and wealth. Harrington wrote, “Such as is the proportion of property in land, such is the nature of the empire,” not “Such as is the proportion of wealth, such is the nature of the empire,” and it is not at all obvious that these are the same sentences or express the same political theory.

The political implications of the difference are not trivial. Redistribution of wealth through taxation is not the same as structural property regimes that lead to distributed property, such as egalitarian inheritance laws or egalitarian intellectual property regimes.

Sitaraman is surely correct that unequal financial wealth also leads to despotism, yet there is something structurally different between solutions that focus on property laws as the key to power and those that address themselves to redistribute accumulated wealth. The book, having leaned so heavily on property law theorists, would have done well to look at modern property laws and structures, and the current inequality of property ownership—including intellectual property—in our own society. The current structure of copyright and patent laws tends to a high degree of concentration of ownership—and the freedom that accompanies ownership—in our society. The patenting process, for instance, is expensive and labor-intensive, meaning that big firms more easily acquire and defend patents than small firms. Patent owners use their monopoly property ownership to make profits, which they then use to lobby for greater protections and greater property rights. But their property ownership also allows them to govern realms of thought and action, and to exclude others from realms of thought and action. Property rights are not interchangeable with the right to use financial wealth.

When Sitaraman wrote his book, Trump was not president. But for those unhappy with our current president, the implications of this argument are significant: Not Trump’s mistakes, nor charismatic Democratic candidates, nor better civics classes will make a difference in the long term. They could help Democrats win an election or two, but they will not help all of us save our democracy. We do not need better messaging, or better ground game. Instead, we need all hands on deck to address inequality in a structural way. 

 

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