Democracy Requires Economic Equality

American democracy is a wonderful system of government because it promotes equality. It is far superior to governments that are based on power concentrated in a single monarch or a few individuals who acquire their power by inheritance or force or money or mythological divine authority. Democratic government comes from the collective wisdom of citizens who each have an equal voice. Democracy reduces the social inequality between the haves and the have nots and demonstrates that cooperation, compassion and generosity create a better society than unbridled rivalry and selfishness.

Democracy not only promotes equality; it requires it. It depends on each citizen having an equal vote, an equal voice and equal value. At its best, it fosters freedom from poverty, misfortune and danger. Only government is strong enough to counter the power of greed and protect the public from the selfish interests of powerful corporations and people. American democracy says, “We’re all in this together. Our lives are better when we look out for each other; when those who are doing well share with those who are facing a calamity or have less; and when we pool our resources to do things that require our combined effort and to help each other through tough times.” It’s the same ideal as our military – we will leave no one behind.

America also thrives on carefully managed capitalism. Individuals are free to earn what they can from their efforts while being regulated by rules of honesty, fairness and safety. We should not allow profiteering that harms or deceives others, whether by snake oil products or financial scams. Democracy and capitalism when combined recognize that the social contribution of the lowest paid worker is as necessary as that of the entrepreneur. In fact, the least desirable labor is often the most essential. “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” (Abraham Lincoln, 1861) While there will always be dramatic differences in the wealth and lifestyles among people, when income and wealth inequality become too exaggerated, economic instability and human suffering soar. “You can have wealth concentrated in the hands of a few, or you can have democracy; you cannot have both.” (Supreme Court Justice Louis Brandeis)

We now have research from The Spirit Level: Why More Equal Societies Almost Always Do Better that indicates wealth and income inequality cause not just economic instability but also cause harm to a society’s overall wellbeing. Societies that are less equal, such as ours, have higher rates of anxiety, illness, violence, teenage pregnancies, obesity, drug abuse, and less public trust. Research reported in Happiness: Lessons from a New Science shows that income equity and progressive taxes increase overall happiness because dollars spent on those in need have a far greater benefit than the cost to the wealthy. Reducing misery does far more good that expanding wealth. Once a person has enough money to be comfortable, having more does not significantly increase happiness.

Amassing wealth requires public resources – roads; fire & police protection; a judicial system; air, water & food safety; government research; education; etc. And yet corporations and wealthy individuals use every possible trick to avoid paying for those resources. During the five years of 2008 to 2012, 288 corporations that were profitable in each of the five years paid an effective tax rate of 19.4 percent. Twenty-six of the corporations paid no federal income tax at all. Super-rich corporations and individuals avoid an estimated $240 billion a year in taxes by hiring crafty accountants and attorneys to find unintended loopholes and to hide their money in off-shore tax havens. Many of the richest individuals make enormous sums of money by creating and manipulating investment schemes that contribute nothing to society, and they pay minimal taxes on the capital gains.

Continuing to give money to corporations and the super-rich through tax breaks and loopholes does not produce jobs or stimulate the economy. Corporations are already sitting on more than one trillion dollars in cash. We must insist that our government officials and candidates for office return the upper tax rates to historically fair levels, end tax evasion and correct the absurd ideas that corporations are people and that money is speech. To do otherwise is undemocratic, un-American and immoral.

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