Building a Living Democracy
Beyond Socialism and Capitalism
by Gar Alperovitz
Sojourner, April 1990

Page 2 of 9
Equality

Serious progressives have long argued that there is both a moral and a fundamental political case for equality. Democracy, for instance, if it is to be more than a facade for special interest-group maneuvering and indirect control by the wealthy, requires that everyone have equal capacity to participate.

Innumerable studies show, however, that money and television tend increasingly to dominate elections. Even more basic is the fact that when there are vast differences in income, wealth, education, free-time, and personal security, those with low incomes are inherently disadvantaged: They do not have the money to influence politics, their education does not give them as many skills, they don't have the time, and often, fearful of losing their jobs, they prefer silence to speaking their minds.

Democracy dies when inequality grows. And capitalism generates extraordinary degrees of inequality--indeed growing inequality: The roughly 50 million Americans among the top one-fifth of society, for instance, now receive approximately 50% of all income (including interest, rent and dividends). Just about the same number of human beings among the bottom one-fifth of society make due on less than 3.5% of such income.

A recent Congressional Budget Office study showed the following statistics for 1988:

• The top 5 percent, or one-twentieth of American families, received almost as much income as the entire bottom 60% of American society put together--roughly 150 million people.
  
• The top 10 percent received roughly the same income as the bottome 70%--roughly 175 million people.
  
• A mere 1 percent of American families at the very top had more income than the bottom 40%--the entire group of 100 million Americans among the lower rungs of society taken together.

At the very bottom of the system, of course, is a group of people in extreme poverty, overwhelmingly among women, children, and minorities. In 1988, roughly 13 percent of American society lived in poverty by official definitions, or roughly 32 million people. Fifty-three percent of all poor families were headed by women. More than 44 percent of all black children were living in poverty. Estimates of those in extreme distress--the homeless and hungry--are disputed; the figures range from several hundred thousand to more than three million.

The traditional American progressive or liberal answer to inequality has been that reform, activism, political demands, or organizing can correct such imbalances and move society toward greater equality. In a sense, politics is seen as somewhat independent from--and able to correct--the essential functioning of the system.

The statistical record, however, suggests that there are very deep linkages between the structure of the economic system and the kind of politics it generates or permits. Little evidence exists to show that traditional political activity has had the capacity to move the American system toward greater economic equality in the 20th Century.

To be sure, the situation would be undoubtably far worse without such activities. But it is one thing to say that traditional political activity may have prevented or slowed down a trend towawrd even more regressive patterns of inequality, and it is quite another to say that it has had the capacity to more society toward greater equality.

For most of the postwar period, for instance, the "relative distribution of income"--roughly the ratio between what the top and bottom receive--held relatively constant. In recent years, the relative distribution has worsened, moving toward greater inequality. The only brief times of positive improvement occurred in connection with major crises: During World War I, during the Great Depression, and during World War II the Century-long trend toward growing inequality was reversed a bit.

But these shifts, indisputably, were associated with fundamental, system-shaking explosions--they are clearly not evidence that political activity on its own at other times has had the capacity to alter the underlying trend.

During the 1960s, partly as a result of the Vietnam War, but mainly as a result of a delayed reaction to the crisis-approved New Deal Social Security legislation (and the first-time impact of cash in the hands of retired payment recipients), the relative distribution of income also improved for a very brief period. But after the 1960s this minor blip in the trend was also reversed, and the distribution of income once more began to erode. The painful deterioration which has now been in process for a number of years appears in broad perspective simply as a resumption of a much older trend of growing inequality.

But all of this, of course, is an understatement: If you receive $1,000 in one year and I receive $50,000 in one year, and a few years later you have $2,000 and I have $100,000, the ratio between our incomes has not changed.

Economists will tell you, correctly, that the relative distribution of income has not been altered. But, self-evidently, in the real world the gap between us has exploded from $49,000 to $98,000, and the real world inequality between us has increased dramatically.

This is precisely what has been happening in the United States. One recent study, for instance, concludes that the real world gap between those at the top and those at bottom of the American income pyramid more than doubled in the postwar period. The income gap between families in the bottom 20 percent and families in the top 5 percent, for instance, exploded from $31,000 in 1947 to more than $64,000 in 1985 (all figures calculated in the same 1985 dollars).

The Congressional study noted above--which includes a more complete estimate of all sources of income--does not give long-trend data. However, it calculates that the gap (measured in 1987 dollars) between an average family in the bottom one-tenth and an average family in the top 1 percent grew by more than $125,000 in the brief period from 1977 to 1988 alone!

If any living form of democracy requires substantial equality to be a meaningful expression of the idea not only of one person one vote, but of each and all having equal capacity truly to impact the governing decisions which determine the fate and shape of the society in which they live, the underlying condition of "living democracy" in the United States is clearly weak...and fading in efficacy.

When this fatal flaw at the core of the American system--this contradiction between affirmed value and actual practice--explodes is anybody's guess.

That the problem is unlikely to go away is obvious, particularly to African-American and other minority groups who know its importance directly and painfully.