For example, if the affluent pursue their own narrow economic self-interest through politics, the results could be damaging to democracy. On the other hand, if the policy preferences of the affluent differ markedly from those of others, this could have major effects on what sorts of public policies are enacted and how our political system should be judged. If the preferences of the affluent are much the same as those of other Americans, it presumably makes little practical difference whether or not they exert disproportionate political power, because they exert it for the same ends sought by the citizenry as a whole. A recent paper by Mr Page and Cari Lynn Hennessy, a Northwestern University PhD candidate in political science, nicely explains why it is important to better understand what the rich really want policy-wise: At present, there is no good data on the policy preferences of the very rich, though a survey project headed by Benjamin Page and Larry Bartels, political scientists at Northwestern and Princeton, is now underway and promises to be revealing. However, most policy has no clear effect on the widget biz, and what our CEO wants from policy, qua citizen of the republic, is hard to say. We can expect the filthy-rich CEO of market-leading Widgets and More, qua CEO, to support policies which, in various ways, benefit Widgets and More at the expense of its competitors. Evidently, as Mr Salam suggests, they don't all want the same things.
Indeed, it is difficult to know what the top 1% want. It is very difficult to tease out which side has had the most cumulative influence over time. Just as the Koch brothers have donated to various libertarian causes, their opposite numbers at the Ford Foundation, Atlantic Philanthropies, the Soros Foundations, elite research universities, and countless other lesser-known organizations have devoted themselves to providing intellectual support for the expansion of the welfare state. This influence is channeled through campaign donations and also through charitable giving, particularly to nonprofits devoted to shaping the ideological environment. There is no denying that Americans in the top 0.01 percent of the income distribution have more potential for political influence than those earning $150,000. What is not so clear is the overall policy thrust of all this access and influence.Īs Reihan Salam notes in a thought-provoking essay in National Review: The evidence clearly shows that the rich have more and better access to politicians than the rest of us, and that their money gives them more influence. Yet I remain sceptical of the widespread progressive idée fixe that the super-duper wealthy constitute a coherent political bloc, unified by common interest and ideology, that works to rig the politico-economic system to their narrow class advantage. In any case, accounts such as Mr Acemoglu's, according to which big players in certain sectors over time manage to rig the regulatory climate to their advantage, are quite compelling for reasons both theoretical and empirical. No doubt the truth is in some subtle combination of stories. I don't know whether to sign up for Tyler Cowen's "going short on volatility" story, Daron Acemoglu's "financial-sector lobbying and campaign contributions 'bought' an enriching (and destabilising) regulatory structure" story, or some other story. It's not clear to me, however, what exactly is whacked. This needs to be fixed, whatever its other consequences. I am sold on the proposition that there's something deeply whacked about the American financial system, and that whatever that's whacked about it is significantly responsible for the top 1% pulling so far away from the rest of the income distribution. Some say the era of the de facto rule of the mighty top 10%, or top 1%, or whatever insidious sliver of the income distribution is thought to constitute the moneyed power elite, is upon us, or nearly so. THE word "plutocracy" is in the air these days.
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