Will Wilkinson has this to say about income inequality:
He [i.e. Nicolas Kristof] writes that "the wealthiest plutocrats now actually control a greater share of the pie in the United States" than in many Latin American countries, where income inequality has recently declined. Are America’s wealthiest people really "plutocrats"? Can you tell whether a country is a plutocracy or a "banana republic" just by looking at the Gini coefficient? The answer is: No, you cannot. Despite all our inevitable complaints, America is a relatively healthy and functional democracy. Perhaps Mr Kristof noticed that Meg Whitman, a billionaire, failed to take the governor’s mansion in California, despite spending more of her personal fortune on a political campaign than anyone in history. In a plutocratic California, the state’s fourth wealthiest person wouldn’t have to win an election to rule.
I agree with Mr Wilkinson that inequality isn’t necessarily a bad thing. However, the combination of inequality and democracy may be deadly.
Mr Wilkinson argues that America is a "relatively healthy and functional democracy" because Californians didn’t elect a billionaire who spent lots of her own money on her campaign.
On the merits, I suppose I should agree with Mr Wilkinson, since he is merely disagreeing with Nicolas Kristof. But, Mr Kristof hasn’t had an interesting idea in decades, if ever. Being a leftist in 21st Century America is really boring.
Both Mssrs Wilkinson and Kristof miss the interesting argument. Perhaps income inequality and democracy are creating a different sort of failure than the one imagined by the leftist. We may soon see they day when the majority of voters don’t pay any income taxes, for example. I know of no arguments which suggest that this situation would be fair. Why would Californians elect a billionaire, when instead they can elect someone else to confiscate the billionaire’s wealth and give it to them? After all, the majority of voters will be able to take some of her stuff and won’t have to pay anything more into the system.
The situation to be feared then, is not that the rich will take over politics. The situation to be feared is that the poor, unwashed masses will take over politics with some help from their progressive friends (Whitman might have spent a lot of her own money, but her opponent got record levels of support from California’s public sector unions).
Finally, Mr Wilkinson concludes with this interesting argument:
More relevant to the American case is the fact that a great deal of ethnic and cultural diversity tends to dampen the general sense of solidarity and social cohesion, and this in part explains why Americans demand less progressive redistribution than do voters in smaller, more homogeneous countries.
If I’m reading this correctly, Mr Wilkinson is arguing that "diversity" will reduce the desire for redistribution. Unfortunately, "diversity" today means the uncontrolled importation of the Mexican underclass. Since these new "diverse" members of our society will be able to vote like everyone else (it’s their "right" after all), I find it hard to believe that the future of American politics will involve less redistribution. Maybe I’m wrong though, and the trend of the last 400 years will begin to reverse itself because of massive waves of anti-distributionist Mexican immigrants. Anyone want to bet?