Income inequality threatens democracy


Demagogues of the 20th century thrived when people lost hope

Income inequality is a growing threat to democracy. Support for democracy relies on more than voting, it relies on people accepting that the system is generally fair and believing it will work for them. When that acceptance and belief starts to waver, the system is at risk. That risk is growing as income inequality deepens in much of the western world.

Weakening democracy is one of the effects of income inequality

This is a factor behind the rise of Donald Trump. Consider this Q&A exchange between Branko Milanovic, former Chief Economist for the World Bank, and Matt Phillips from Quartz about Milanovic’s latest book (Global Inequality: A New Approach for the Age of Globalization):

(Phillips) “The book seems to suggest that inequality can drive politics. Do you see that today? Does inequality help explain Donald Trump?”

(Milanovic) “Definitely. For Donald Trump I would say it’s an easy question. It was really absence of growth, stagnation of incomes in the US middle class, not only from loss of jobs, but also from loss of dreams of upward mobility for many people. Or perhaps because of imports, or because of direct competition with Asia or other emerging markets. So that was clearly one strong element which explains Trump.”

Demagogues thrive when people lose hope. Support for our basic economic and political system is built on the idea that if you work hard and follow the rules you will be financially secure, and things will keep getting better with each new generation. When income and wealth becomes concentrated in fewer hands and people lose hope that their hard work will translate into a bright future, support for the system crumbles and anger grows.

Inequality can cause conflict, which some politicians will try to exploit

This growing anger creates an opening for politicians who either pledge radical policy changes, or have a radical personality. The fact that Donald Trump has been able to get away with countless offensive remarks while making many incoherent and extreme policy statements, is a clear warning that rising anger is suppressing the effectiveness of rational and nuanced arguments. Whether Trump wins or not, he has exposed the reality of a disturbingly large audience for outright demagoguery, bigotry, and sexism in the United States, an audience that has only grown since the financial crisis.

Aside from the United States, the far right is now on the ascent in much of the western world. Far-right parties are gaining in support across Europe, including in Austria, where the leader of the far-right Freedom Party won the first round of presidential elections. This is a concerning trend that shows no sign of slowing any time soon.

We must fix income inequality

To stem the tide of demagoguery and restore trust in the democratic system, western countries must begin to take real steps to address income inequality. This must go beyond lip service and result in real policy changes. Trump is merely a symptom of income inequality’s corrosive effect on democracy, not a cause of it. If we continue to focus on personality and spectacle rather than policy, democracy – and the rights and freedoms that go with it – could be put at grave risk.

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7 comments Add yours
  1. Interesting perspective. Trump doesn’t surprise me. But I have been at a loss to understand how 10’s of millions of Americans could agree with his agenda. This may explain part of it.

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