How to Fix American Government and Revive Democracy
There are several ways that we can reduce the power of special interests and make our government more democratic. The most promising reforms include creating more economic equality among citizens, adopting public financing of elections, and using more representative voting systems.
As I argued elsewhere on this site, the main problem right now with American government is a deficit of democracy. (See “What’s Really Wrong with Government.”) Moneyed interests have too much power in our political system and the public has too little. But what can be done about this – how can we fix our government and revitalize democracy in the United States?
It is not as if this threat to democracy has gone unnoticed. Many citizens and organizations have been outraged about the rising power of affluent special interests. They have been working to address this issue of unequal power and have been pursuing several different approaches. These reform efforts fall into three broad categories. The first is to lessen the economic inequality in the private sphere that is being translated to political inequality in the public sphere. The second is to attempt to erect institutional barriers that prevent private power from being easily converted to political advantage. A third approach is to reform the voting process itself so that it becomes more democratic and more empowering to average voters. Let’s look briefly at each of these alternatives.
Toward Greater Economic Equality
The first line of attack is to go straight to the heart of the problem: our large inequalities in wealth and income. If these disparities are the basic cause of political inequalities, then these private inequalities need to be lessened if we want to move toward political system where power is more widely dispersed among all citizens. So we need to produce a fairer division of the economic pie that is created by the work of all Americans. However, such changes in the distribution of wealth and income will not come about naturally through the market, but can only be enacted through various kinds of public policies on the state and federal levels. Here are some policies that would help to reduce wage and wealth inequalities.1
- Raise State and Federal Minimum Wages. This policy would immediately benefit those at the bottom of the economic ladder. During the last several decades, minimum wage has been increasingly falling behind the average wage and it needs to be increased.
- Living Wage Policies. Another approach to raising the incomes of the poor and working class is to pass local ordinances requiring that a “living wage” be paid by companies with government contracts or subsidies. The wage has usually been pegged to the amount that would lift a family of three or four above the poverty level. Cities like Baltimore and Los Angeles have passed living wage laws that have increased the wages of thousands of workers in those urban areas.
- Earned Income Tax Credits. Many liberals and conservatives agree that the EITC has been very successful in subsidizing the wages of low-income working families so that they may stay out of poverty. This program must be maintained and hopefully expanded to cover even more low income workers.
- Full-Employment Policies. If government policymakers were more serious about reducing unemployment to a minimum, this would reduce both poverty and wage inequality. Many people are poor for lack of a full-time job. And when the employment market is tight, this forces companies to raise wages in order to attract workers.
- Reducing High Corporate Salaries. Decreasing economic inequality may involve not only increasing the incomes of those on the bottom, but also putting reasonable limits on the income of those on the top. The salaries of top corporate executives have been ballooning while average wages have stagnated. U.S. CEOs currently make salaries that are over 200 times that of the average worker – a much higher disparity than we see in most other Western countries.
- Bolstering Union Power. Government policies to strengthen the power of unions would probably have the highest payoffs in the effort to reduce wage inequality. Many other Western countries have lower levels of economic inequality precisely because unions are more common and have more clout. Union bargaining clearly helps to increase the wages and benefits of low and moderate income workers. We could do much more to facilitate the establishment of unions and to increase their bargaining power. For example, instead of the current lengthy process needed to establish unions, we could require instant recognition of any union that signs up a majority of workers in a workplace. We could also institute a ban on the use of permanent replacement workers – a major tool used by management to break strikes. Canada has this ban and also requires instant recognition of unions – one reason their rate of unionization is three times that of the U.S. Another change that would help unions would be to remove the ban on secondary boycotts, where workers from one company are prohibited from supporting strikers in another company – say by refusing to cross a picket line. Finally, the Taft-Hartely Act should be repealed. This act impedes workers abilities to unionize and has legitimized a wide array of anti-union activities by employers.
- Free or Low-Cost Higher Education. We should be increasing the number of government grants (not loans) for college students – or better yet, we should make higher education free for all Americans.2 After World War II, the G.I Bill enabled millions of people to get a debt-free college education, which gave a significant boost to their asset-building efforts. A similar effort now would help millions attend college and ensure that they graduate without a crushing load of debt.
- Kidsave Accounts have been proposed that would guarantee every child $1,000 at birth and $500 per year to every child from ages one to five – all to be invested until retirement. This would significantly bolster Social Security and other retirement accounts for all Americans.
- Progressive Taxation. More progressive tax rates would help to even the playing field. The rich should be paying more in income taxes. Estate taxes, which currently impact only the very richest families, should be maintained. Capital gains – which disproportionately go to the wealthy – should be taxed at the same rate as wages. Finally, a direct tax on wealth, from which most Americans would be exempt, would help to undermine huge concentrations of wealth. Many European countries already have such wealth taxes.
- Employee Ownership Plans. Government policies should help to broaden employee ownership of businesses – the main generators of wealth in our country.3 Policies should encourage employee stock ownership plans (ESOPs), profit-sharing plans, and widely granted stock options that would significantly increase the stake that workers have in private enterprises.
A more equitable distribution of income and wealth would certainly be a step in the right direction in the effort to remedy the unfair distribution of political power that we have in the U.S. The goal of these policies is not to eliminate economic inequality in America; no one is arguing that everyone should make the same amount of money. The point is to begin to reduce economic inequality to a more reasonable and just level – a level at which it will no longer undermine the promise of political equality.