What is an example of a plutocracy? by Tony Garcia
Answer by Tony Garcia:
Bradford DeLong, professor of Economics at the University of California, Berkeley, argues that, since 1980, inequality has expanded greatly along two dimensions. First is the gap between the top 20 percent and the bottom 80 percent of the income distribution, which has grown rapidly along with the returns on a college education. The second is “an even larger explosion of inequality” between the top .01 percent (about 15,000 households) and the rest of the top 20 percent, “perhaps the most puzzling and remarkable feature of the past generation.” This development “puts the American political system under substantial long-term threat,” as the kind of concentrated political power associated with such imbalanced wealth endangers a “democratic commitment to equality of opportunity” for future generations.(1)
DeLong also expressed concern at the generalization of this latter trend across nations, asking whether a “plutocratic overclass” is being generated, not just in the United States, but as a global phenomenon in many countries. This increasing concentration of wealth within nation-states allows an internationally oriented economic elite "to speak very loudly indeed" and may foreclose possibilities for the more robust reemergence of a pro-equality politics.(2)
In the U.S., this plutocracy has emerged due to the decline of American educational supremacy, a “less progressive” tax and transfer system, and a cultural and socio-political transformation that has rendered acceptable elite corporate practices that would have yielded a sharp response from organized labor and the wider society in earlier eras.