The New Gilded Age

I’m Richard Heffner, your host on The Open Mind.

And I first saw and heard my guest today at the Russell Sage Foundation, where he spoke – along with others at that extraordinary bastion of social science research – about the recent book published by the Foundation and the Princeton University Press, his book.

Larry M. Bartels is Professor of Public and International Affairs at Princeton, and the Director of its Center for the Study of Democratic Politics. His new book is titled “Unequal Democracy … The Political Economy of the New Gilded Age”.

And I would begin our program today by asking Professor Bartels to explain his use of the “Gilded Age” metaphor, and in a Presidential year when presumably all Americans of a certain age stand equal before the ballot box, why he writes about “unequal democracy”.

BARTELS: Well, the Gilded Age was a period of notable economic inequality. And in the past 30 years or so America has entered a similar kind of period of increasing economic inequality. With people at the top of the income distribution vastly outpacing the rest of the population in terms of income growth.

That raises important issues for democracy that go back for centuries. Aristotle talked about classifying political systems on the basis of whether political influence rested with the wealthy or with the masses.

And obviously in a democracy, political influence is supposed to rest with the masses. But my analysis suggests that that’s disturbingly untrue in our current system.

The happy notion that we can have lots of economic inequality and at the same time be equal in the civic sphere seems not to be working very well.

I’ve done analysis of the responsiveness of elected officials to rich and poor people and found that vast numbers of people are effectively disenfranchised even if they cast votes by the fact that they’re elected officials are unresponsive to their preferences. And all those people have in common is that they’re not affluent.

HEFFNER: Your quantitative analyses demonstrate that. Do you think that the American people feel that?

BARTELS: Well, I think some people do, there’s a lot of kind of free floating cynicism and disaffection with the political system. But lots of us manage to convince ourselves that our democracy is working just fine, thank you, in spite of the economic inequality that we see around.

So I think the feeling isn’t, maybe, as widespread as it should be given the evidence.

HEFFNER: Do you think that that means “that’s the way it is”, we’re not a democracy we’re an oligarchy, a plutocracy, perhaps a better word.

BARTELS: Well, there are certainly differences between the system we have and a plutocracy because influence isn’t entirely concentrated among the people at the top of the income distribution. But they certainly have vastly disproportionate influence and there are certainly large numbers of people at the bottom of the totem pole who seem to have very little, or none. So, if we’re a democracy at all, I want to say we’re an unequal democracy.

HEFFNER: How, how … how has your thesis been accepted by your fellow social scientists?

BARTELS: Well, there’s been a lot of attention to the claims in the book about partisan differences in income growth. That’s obviously a controversial claim, especially now as people think ahead to the election. That’s the part of the analysis that’s gotten the most attention, but …

HEFFNER: What do you mean “partisan”?

BARTELS: Well, what I’ve done is to look at patterns of income growth for people in various parts of the income distribution historically under Democratic and Republican Presidents. This is going back to the late 1940s when the Census Bureau started tabulating data on income growth for people at the bottom and middle and top of the income distribution.

And it turns out that there’s a very striking pattern. The people near the top of the income distribution do pretty well regardless of which party is in charge.

But people in the middle of the income spectrum have average levels of income growth that are about twice as high under Democratic Presidents as they’ve had under Republican Presidents. And working poor people have income growth that’s about six times as great under Democratic Presidents as under Republican Presidents.

So, generally, historically under Democrats, there’s been fairly high and relatively evenly distributed income growth. Whereas under Republican Presidents there’s been a great deal of disparity between how people at the top have done and how people in the middle and at the bottom have done.

HEFFNER: Then why have we elected and re-elected some many Republican Presidents. Lincoln said that God must have loved the common people, he made so many of them. They do the voting, don’t they?

BARTELS: Well, they do do most of the voting and if they were voting simply on the basis of this pattern we’d see many fewer Republican administration than we have.

Part of the explanation presumably is that they vote on the basis of lots of other things besides income growth. But the really striking finding is that there is a strong relationship between how the economy’s doing at the time of the election and whether the incumbent party manages to win re-election.

And you’ve think that given the pattern of income growth that I’ve described that would produce a big advantage for Democrats. It turns out not to because voters are focusing so much on income growth during the election year rather than during the incumbents entire administration.

And historically although Democrats have done much better for middle and low income people over the course of their entire administration, they’ve done less well during election years. And so that bias in the timing of income growth has turned out to be hugely consequential for our political system.

HEFFNER: You know, I, I read that and re-read that in Unequal Democracy and I didn’t understand it. You say that it’s a pattern, that in Democratic administrations at the end they do less well for “the people”. How does that parse? How does it come about? How do you explain it?

BARTELS: Well, I think it mostly has to do with the differences in economic policies between Democrats and Republicans at their beginning of their administration.

Presidents are usually most influential when they first come into office. And so they’re likely to adopt big economic changes early in their administration and those changes begin to have effect in the first half of the administration. So typically in the second year of a Democratic administration we see a big economic boom, lots of economic stimulation.

And in the first year of a Republican administration policies lead to recession or a slow down in economic growth in the second year. And then what happens over the course of the administration is that we gradually grow out of that slump and by the time the next election comes around things are doing pretty well under the Republicans.

Whereas under Democrats the boom begins to wear off in years three and four and by the time the next election comes around growth is significantly lower than it was in the earlier part of the administration.

So over the administration as a whole, people do better under Democrats. But if they only focus on how things are at the time of the election it doesn’t look that way.

HEFFNER: Is that the kind of people we are, we only focus on this last Presidential year?

BARTELS: I think that’s indicative of a much deeper human tendency. I think we’re kind of kind of evolutionarily programmed to focus on “the here and now” and its difficult for us to calculate carefully what’s happened over a long period of time and think about the distant past in the same … with the same vividness that we think about the present.

HEFFNER: So this is a matter of the “boom” being off the rose.

BARTELS: Right.

HEFFNER: What do you think it will mean this election year? This Presidential year?

BARTELS: Well the pattern this year looks different from what’s been historically typical, which is to say that the economy doesn’t seem to be booming under the current Republican incumbent and so the fact that voters are focused on how the economy is now will probably be a detriment to the Republicans chances, rather than a boom, or boost.

HEFFNER: Is that, is that a prediction?

BARTELS: Yes.

HEFFNER: Bill Clinton was right then, “it’s the economy, stupid”.

BARTELS: Ah …

HEFFNER: Is that the …

BARTELS: Well, it’s not only the economy, but the economy certainly plays a big role in determining how the election will turn out. Obviously this time we have another big historical factor which is that we have an African American candidate for the first time and so that will certainly make a, a difference as well. What kind of difference it will make isn’t something that we can answer very well on the basis of historical evidence since it’s really a historical first.

HEFFNER: You can’t use the quantitative analysis then?

BARTELS: No. I mean we have some evidence about racial resentments and what kinds of peoples are likely to be concerned about this. But how they’ll behave when they actually get in the voting booth is something that I think no one can really say with confidence.

HEFFNER: Well, your, your Princeton colleague Paul Krugman has, has several times in this election year indicated that he thinks that the intensity of racial attitudes has severely been diminished by this time. And he seems to be saying that although I haven’t been able to decipher recent comments, that we’re not as racist a country as we were four years ago, eight years ago, 12 years ago. What do you think?

BARTELS: Well, that’s certainly true in the course of decades. The change in recent years I think has been part of a longer trend.

I’ve looked at data about the feelings that people express toward Black and Whites and the difference in the feelings that they expressed to the two groups as a kind of measure of potential racial animosity and the gap which was quite substantial 30 years ago has really declined greatly.

Ah, of course, that’s what people say to pollsters. And so whether that means that the animosity has really disappeared or not is something that we’ll probably see better in November than we’ve been able to see from anything that we’ve been able to observe up to this point.

HEFFNER: In, in general terms, as a social scientist in this constant dispute and there always has been one between the efficacy of quantitative very qualitative analyses … what, what, what’s your own sense of what quantitative analyses can indicate for us about major choices that the nation makes … as the election this year. Do you get, can you get real insight through your quantitative analyses?

BARTELS: Well, I think they’re useful for two things. One is that they help to either bolster or dismiss lots of conventional wisdoms that may or may not be true.

People have strong views about reality some of which match pretty well with what the data seem to show and some of which seem quite contrary to the data. And I think it’s helpful to be able to pinpoint those kinds of instances. But maybe more importantly they give us a sense for the magnitudes of effects that we believe are present.

So in the analysis that I did of representation I don’t think anyone would be surprised to find that low income people have less influence on the decisions of their elected officials than more affluent people.

But you find quantitatively that the statistical relationship is zero … is really, to me, quite striking. It suggests that not only are they disadvantaged, but they’re entirely ignored. Which is qualitatively a different thing.

HEFFNER: Well, going back to this matter of being entirely ignored. Let’s pick up the word “oligarchy” again. Would you say to someone, to a student, to a colleague …we should stop referring to ourselves as living in a democracy … literally on the basis of my quantitative analyses I see that we live in an oligarchy.

BARTELS: Well I think the word oligarchy implies that political control is very strongly concentrated at the very top of the income distribution.

My evidence suggests that people in the bottom third of the income distribution have really no influence. People in the middle of the income distribution have some influence and people in the upper third of the income distribution have a good deal more. So there’s a great deal of inequality.

I don’t know whether one calls that an oligarchy or just a democracy that isn’t functioning very well. I think there’s an advantage to thinking ourselves as a democracy because it helps to reinforce the ideals that we want to strive for.

But on the other hand if we mistake the ideal for the reality, we’re likely to overlook lots of ways in which our system isn’t functioning very well.

HEFFNER: And if you and I were at the bottom third, we’d certainly say it’s an oligarchy.

BARTELS: Perhaps.

HEFFNER: Perhaps? You mean it … all right perhaps because we might not be educated as to, to an awareness of the difference of the powers we have in relation to the next third and then to the top third.

But, you know, I was fascinated … in Unequal Democracy you write, well, there are a number of things that fascinate me about the book. You say in Aristotle’s terms our political system seems to be functioning not as a democracy, but as an oligarchy … Aristotle’s terms … if we insist on flattering ourselves by referring it to a democracy we should be clear that it is a starkly unequal democracy.

You find that in the rest of the world? The rest of the democratic world? This kind of pattern?

BARTELS: I don’t think we know very well how things look in the rest of the world. It’s striking that there hasn’t been more analysis of this sort since the relative influence of different kinds of people seems like a pretty fundamental characteristic of a democratic political system.

There are certainly some reasons to believe that other rich countries are doing better on this score than the United States is. In particular maybe the fact that they tend to have stronger labor unions and better organized institutions for the representation of ordinary people’s views.

HEFFNER: But one time that wouldn’t have been true. At on time that wouldn’t have been true. We had strong labor unions, what happened?

BARTELS: Well, there’s been a decline in this realm as in other realms that has partly to do with external economic forces and partly to do with policy decisions. And people who are apologists for the system often focus entirely on the external forces and they think about the decline of labor unions as being simply a result of changes in the way the economy functions.

And similarly they talk about increasing economic inequality as being the result of changes in the global economy and changes in technology and demography. And I think all of those things are important, but what I’ve tried to show in the book is that there are also really crucial policy choices that have made a big difference as well.

In most other countries they’ve been exposed to these same external economic forces, but their political systems have responded pretty aggressively in order to try to maintain an income distribution that is consistent with democratic ideals.

In the US we’ve been more content to let the market have its way and think of that as something separate from our political system.

HEFFNER: Was that … was that Ronald Reagan’s great contribution?

BARTELS: I don’t think it was just Reagan although his policies tended to have that affect. I think there’s a deeply ingrained tendency in American political culture to think about the political system as being separate from the economic system and to tolerate and even applaud economic inequality on one, but to convince ourselves that we can have a political system that’s separate from that and unaffected by that.

And what my analysis suggests is that those two spheres can’t be kept neatly separate; that if we have a great deal of economic inequality, it’s likely to spill over and have important ramifications for the political process.

HEFFNER: That’s the key thesis of your book, isn’t it?

BARTELS: Yes. It’s the interaction between politics and economics. Politics influences the economic process so its not just external economic forces. And on the other hand, the economic processes influence our democratic political system in a fundamental way.

HEFFNER: So if the rich get richer or the rich exclusively get richer we have less and less of a basis for calling ourselves a democracy.

BARTELS: That’s right.

HEFFNER: Pretty wicked to think about.

BARTELS: It’s a pessimistic book.

HEFFNER: Yeah. Ah … I, I … there was no point at which I laughed out loud, I must admit. There was a, a point at, at, at the very end though. You’ve talked about Katrina, you’ve written about Katrina, you’ve written about the choices that have made. And one would assume in a democracy choices would have been made … other choices would have been made to foster the well-being of most of the people.

And you write, “Imperfect as they are, the processes and institutions of American democracy provide us with consequential choices. We can re-enforce the levies, we can divert some of the fastest running waters and we can insist that the most vulnerable among us not be abandoned when the affluent flee to higher ground.” Beautiful, poetic language.

You then conclude your book by saying, “We can make these choices. Whether we will make them remains to be seen.” And that, indeed, although you talk about a pessimistic book … is the most optimistic thing one could write. And I wondered as I finished the book how you could be so optimistic in light of what we haven’t done. Yes, we could …

BARTELS: MmmHmmm.

HEFFNER: … but we haven’t.

BARTELS: Ahem, what I had in mind when I wrote that passage was the evidence that I kept coming upon in the investigations that I did of various important policy matters of the extent to which the choices of political elites were consequential. The differences between Democrats and Republicans especially, but not only that.

And although the influence of especially low income people on elected officials seems to be very modest. Once they’re in office, we do have the choice about which people we put in office, whether we elect the Republicans or the Democrats turns out to make a huge difference in terms of policies and way of life that they either reinforce or help to erode.

And so, I think the … under-appreciated leverage that ordinary people have here is in terms of replacing one set of political elites with another.

HEFFNER: But always a political elite and isn’t there the, the assumption that in time the elites will relate to the economic power, that the political power will be reflected … or the economic power will be reflected in political activities … no matter what.

BARTELS: Well I think there is a lot of that. But even with that there are important differences in the ideological impulses of different political elites. And I think that’s where ordinary people have leverage in the system as it exists now.

HEFFNER: How do you account … as a social scientist … for the fact that people, in a sense, don’t vote their economic interests?

BARTELS: Well, partly they’re voting on the basis of other kinds of interests. But the other important thing to bear in mind here is that for most people politics is a sideshow in life, although it’s hugely consequential for all of us collectively, for any given individual the consequences of figuring out how to vote in a particular election are quite modest.

And so people typically spend much less time thinking about it and learning about it than they do about things that are closer to their day to days lives.

HEFFNER: But you don’t feel that there is not … that they’re inconsequential, that the political choices are inconsequential. In a sense your book indicates that they’re enormously consequential.

BARTELS: No. That’s right.

HEFFNER: Then why … what’s the matter with the rest of us?

BARTELS: Well, people even if they recognize that they’re consequential are likely to recognize that their own decision is unlikely to be decisive and so what they have to do is to bear in mind that they’re deciding not only for themselves, but for the entire society. And that although individually their own vote may not be decisive, collectively all of us together have an important role to play in deciding which set of elites propel policy in one direction or another.

HEFFNER: Well, do you think there is a connection between … let’s say, as we talk here in June … is there going to be, in your estimation a very real connection between the price of gasoline at the pump and way we vote?

BARTELS: I think there will be, maybe less so than seems now because the price of gasoline is likely to decline a little bit by election day. And so it won’t be at the forefront of people’s minds then in quite the way that it is now.

But people do, I think, respond to these immediate concerns. The issue is whether the decisions they make on that basis correspond with the decisions they would make if they had a broader and more carefully considered view. And sometimes the answer seems to be “no”.

HEFFNER: Well you talk about the price of gasoline at the pump being lower by election time. Are you, are you at all referring to manipulation?

BARTELS: No, no. My guess is just that as the summer rush calms down that prices will go down a bit. But that’s just a guess, I’m not an economist.

HEFFNER: And the rest … but you play the same game. You play in the same field as the economist does in your quantitative studies, don’t you?

BARTELS: Well, I try and think about the ways that politics influences economic outcomes because I think that’s something that economists haven’t paid as much attention to as it deserves.

But one of things that I’m hoping to do is to stimulate people who know more about economics than I do to focus on these kinds of issues and give political forces their due in accounting for how and why the economy behaves the way it does.

HEFFNER: Now in the minute and a half we have left, tell me about this business of Kansas and what’s the matter with what’s the matter with Kansas? And the dispute that has been going on.

BARTELS: Well, what I’ve tried to do is to look at the extent to which the political changes of the last few decades have changed what we think of as being the kind of classical American party system in which low income people are disproportionately Democratic in their loyalties and upper income people are disproportionately Republicans.

There’s a view that that’s much less true now than it used to be. It turns out … if we look at data going back to the early 1950s that it isn’t really true that low income people now are really just as democratic in their views as they were then.

Part of what’s changed is that upper income people have become more Republican and another big shift is that unnatural Democratic monopoly in the South has eroded substantially over the last 40 years. Those are the big shifts.

But the idea that low income people are abandoning the Democratic Party turns out to be wrong. And insofar as low and middle income people are voting Republican, it seems not be on the basis of the kinds of issues that have been pinpointed in accounts about the White working class, the notion that they’re voting mostly on the basis of social and cultural issues like abortion and gun control and gay marriage.

If we look at the relationship between people’s political views and their voting behavior, those issues turn out to be a good deal more consequential for high income people than they are for low income people.

HEFFNER: Fair way to end the program. Thank you so much for joining today on The Open Mind.

BARTELS: Thank you, my pleasure.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. If you would like a transcript of today’s program, please send $4.00 in check or money order to The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150.

Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.