No, America Is Not an Oligarchy

September 12, 2014


“The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn’t allow unions.” – Martin Sheen in the movie Wall Street

A lot of people are misreading this Princeton study on the political influence of the wealthy and business groups versus ordinary citizens. The study does not say that the US is an oligarchy, wherein the wealthy control politics with an iron fist. If it were, then things like Social Security, Medicare, food stamps, veterans programs, housing finance programs, etc wouldn’t exist.

What the study actually says is that American voters are disorganized and their individualized preferences don’t matter unless voters group themselves into mass membership organizations. Then, if people belong to mass membership organizations, their preferences do matter, but less so than business groups and the wealthy.

Furthermore, the study says that the only mass groups that truly represent citizen preferences are labor unions and advocacy groups like the AARP. Another implication from the study is that citizens can get what they want if they want the same things that business groups or the wealthy want, or if they want to preserve the status quo. Change is hard for everyone, even the rich. Citizens helped stop cuts to Social Security that the elites wanted, and may derail trade agreements.

The lesson here is to organize. Citizens can matter, but only if they make themselves matter. Change won’t be distributed like consumer products, wherein high polling numbers just seamlessly translate into policy change.

There are a number of other implications. One is that the decline of labor unions doesn’t just reduce economic bargaining power, it reduces the political representation of ordinary citizens. If mass membership organizations are the only way for ordinary Americans to represent themselves, and labor unions are the only mass membership organizations that express the preferences of ordinary Americans, then labor unions are popular democracy. This makes sense. The groups pushing for broadly popular policies – equal pay, foreclosure relief, preserving Social Security and Medicare, etc – are unions. Unions want more stuff for normal people.

Anyway, that’s what the study says. America is not an oligarchy. But it is becoming one as unions die.

I’m not sure I agree with the methodology of the study. There are a lot of acknowledged gaps, like the influence of ordinary people on the elites, and vice versa, and unacknowledged ones, like the importance of the security state or ideological competitiveness. The study doesn’t distinguish between policies that are important, like TARP or the bailouts, and those that are not, like the cap on credit union lending. It doesn’t distinguish between policies in the news, and those not in the news. It doesn’t deal with media consolidation, or examine the link between economic elites and ordinary citizens.  I mean the New Deal financial system worked really well because it established such a political alignment, while deregulation snapped this political unity. And it doesn’t address change over time – clearly there was more influence from ordinary citizens in the 1930s and 1940s. Why? The American political system isn’t static. Different leaders have different styles and believe different things.

Really though the biggest issue with the study is that it is both obvious and derivative work – political scientist Tom Ferguson has been writing about this problem since the early 1980s. And anyone with eyes, ears, or any observational skill knows that the rich matter. Money is power, as Adam Smith noticed a few hundred years ago. This study is part of the whole Piketty movement, wherein what Chris Hedges calls the liberal class begins to notice that the distribution of resources matters to them. One could argue it’s good that people notice the obvious, but I’m not so sure. If it takes Princeton political scientists six years after the biggest financial crisis in history to notice that money is a thing, that’s not really progress. Real progress would be a wholesale rejection of political science and economics as blind and corrupt. But then, I suspect that would require people to organize.

UPDATE: I should note that the study says that wealthy elites only get their preferred policy 45% of the time. That’s not even a majority. The status quo is powerful, even when the elites don’t like it.

Author: mattstoller

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