economic inequality inevitably generates political inequality, which in turn reproduces economic inequality
* Paper: Adam Przeworski. Democracy, Redistribution and Equality. Brazilian Political Science Review, Vol 6, No 1 (2012)
“The article argues that economic inequality inevitably generates political inequality, which in turn reproduces economic inequality. Basic concepts are introduced first along with strong caveats concerning the quality of the cross- national data on income distributions; historical patterns of income inequality are summarized next, and with these preliminaries, a distinction is made between redistribution of consumption at a particular time and equalization of income earning capacities over time. Following this economic considerations, the article discussion moves to political factors that may block redistributions.”
“The impact of money on politics cannot be reduced to “corruption.” True, corruption scandals abound: suitcases filled in cash are found in the prime minister’s office, government contracts are awarded to firms co-owned by government ministers, public officials exit politics to cushy jobs in private companies they favored, insider trades are rampant, political parties are found to have bank accounts in Switzerland, local governments operate systematic bribe schedules on contractors, the list goes on and on. Moreover, such scandals are by no means limited to less developed countries or to young democracies: these examples are drawn from Germany, Spain, France, Italy, United States, and Belgium. But reducing the political role of money to instances of “corruption” is deeply misleading. Conceptualized as “corruption,” the influence of money becomes something anomalous, out-of-ordinary. We are told that when special interests bribe legislators or bureaucrats, democracy is corrupted. And then nothing needs to be said when special interests make legal political contributions. In order to exist and to participate in elections, political parties need money. Because election results matter for the private interests, they understandably seek to befriend parties and influence results of elections. The logic of political competition is inexorable. That the same acts are legal in some countries and illegal in other systems – some U.S. political financing practices would constitute corruption in several democracies – is in the end of secondary importance. The influence of money on politics is a structural feature of democracy in economically unequal societies.
The relation between money and politics can be to some extent mitigated so that the impact of economic inequality on political inequality varies across countries. Various regulatory schemes have been proposed and various are in use but we have no systematic knowledge of their effects. Perhaps instead of legal regulation, more effective are mechanisms by which poor people can pool their resources in order to counterbalance the influence of the rich. Unions provided this mechanism in the past and still do in some countries: income inequality is lower in countries which continue to have encompassing unions (Scheve and Stasavage 2009)22 Non-governmental organizations now play some of this role and, as the 2008 Obama campaign has shown, perhaps the internet will provide an alternative mechanism. But perfect political equality is impossible in economically unequal societies. Something is wrong when a plurality of citizens in a democracy answer the question about which institutions have most power in their country with “banks.23 Perhaps the most plausible explanation of the persistence of inequality is the feedback from political to economic inequality. High economic inequality generates high political inequality, disproportionate political influence of the rich perpetuates the inequality.”