The more unequal your society is, the more your laws will favor the rich

Political scientists and economists who've undertaken peer-reviewed research into policy outcomes have concluded that all over the world, and at every level of government, wealth inequality is correlated with corrupt policy-making in which politicians create laws and regulations that favor the rich at the expense of the wider public.

This is a vicious cycle: the more unequal a society becomes, the more its politicians enact rules that lead to greater inequality. This is the core -- but understated -- insight of Piketty's Capital: that owning things makes you richer than doing things because owners buy policies that make them richer.

This is true across the world, but especially in the USA, where a Princeton research group found that, over the past twenty years, policy outcomes exclusively favor the interests of the top decile of wealth ownership -- and during that period, the top decile got a lot richer, and thus more influential.

Politicians are influenced by campaign contributions, but they're also responsive to voters, and wealth is correlated with voting. In part, that's because poverty is a tax on cognition and makes it much harder to focus on long-term goals (like changes in government) because it demands such focus on short-term goals (like not having your kids taken away and being sent to prison because you made an error on your welfare paperwork).

There's evidence that high voter turnouts produce better policy outcomes, even if they don't elect better politicians. That's because politicians respond to the people who vote, and while they favor the people who vote and give them money more, they can't ignore voters if they want to stay in office and keep on banking favors, campaign contributions, and other benefits.

Voter turnout, of course, will not entirely solve the problem of differential representation, but it can begin to alleviate it. When turnout is in the low 40s, as it is for many U.S. elections, politicians have no reason to fear losing their seat by only representing the donor class. By contrast, with mass participation, ignoring the desires of the public could cost a representative his seat. Using American National Election Studies data, Syracuse University political scientist Spencer Piston ran a unique analysis for Al Jazeera America. His data show that in terms of median income, the median non-voter is far poorer than the median voter — $32,500 per year compared with $57,500.

“Preferences of those with money are more likely to influence policy than the preferences of those without money, in no small part because the wealthy engage more in the political process,” Piston told me. “They vote more often, they donate more money, and they are in closer contact with public officials.” These data also understate the wealth of the donor class, since they include all donors. But the megadonors are increasing influential: the richest .01 percent of donors (25,000 people) were responsible for 42 percent of donations in 2012.

So while voting will partially alleviate political inequality, we also need campaign-finance reforms such as public financing and more robust disclosure rules. Lobbying reforms and limits on campaign contributions have a proven track record at the state level.

On the whole, there is a strong evidence to suspect that representative democracy is not compatible with deep economic inequality. The American Founding Fathers, classic progressives such as Presidents Theodore and Franklin Roosevelt and commentators such as economist Thomas Piketty are right to worry about how inequality undermines democracy. As FDR warned, “Government by organized money is just as dangerous as government by organized mob.”

The more unequal the country, the more the rich rule
[Sean McElwee/Al Jazeera]