The Vast (And Growing) Wealth Inequality Must Be Fixed Before It Destroys Our Democracy

Economist Paul Krugman warns about the huge wealth gap in the United States and its danger to our democracy: 

On Sunday Donald Trump celebrated his 80^th birthday with a cage match on the White House lawn. The match and the events that surrounded it — especially the press conference with UFC fighters, shown above, held on the steps of the Lincoln Memorial — were a desecration of America’s capital, whose monuments and buildings have always endeavored to represent small-r republican virtues. The whole affair was an affront to the values on which this nation was founded and also unspeakably vulgar.

That last criticism may strike some readers as elitist and trivial. Yet the vulgarity that is the hallmark of Trump and his surrounding circle of oligarchs is a symptom of something not at all trivial: The collapse of social norms. As I argued yesterday, these norms historically played a key role in mitigating abuses of power and privilege during the Gilded Age, the last time America suffered from extreme income and wealth inequality (though not nearly as extreme as what we have now).

Norms matter. In his classic book The Theory of the Leisure Class — published in 1899, at the apogee of the Gilded Age — Thorstein Veblen famously argued that much of the behavior of his era’s elite was driven not by the desire to enjoy life but by the desire to impress others. Partly they did this through conspicuous consumption. Thus they built lavish mansions staffed by legions of servants.

However, members of the Gilded Age elite didn’t solely aim to display their wealth. They also tried to appear respectable. There were surely many private affairs and betrayals we will never know about. But the important point is that the super-wealthy of that era presented to the American public an image of being responsible members of society.

The contrast with the public behavior of Trump’s band of uber-wealthy is startling.

In addition to modeling upstanding behavior, the extremely rich of the Gilded Age were expected to have, or pretend to have, some virtues that were part of the aristocratic ideal, including a sense of noblesse oblige displayed by good works. 

Today’s oligarchs, by contrast, have largely given up on the old norms of social and individual responsibility. They give very little money to good causes and their vulgar taste reflects their in-your-face attitude towards the public. In our current hyper-Gilded Age, extreme vulgarity and the decline of philanthropy are really different aspects of the same phenomenon: the rise of an elite so disconnected from ordinary Americans that it feels no need to even appear to be honorable.

So in a real sense we are living in the midst of a reenactment of the decline and fall of the Roman Republic, not a second American Gilded Age. No, I’m not one of those men who thinks about ancient Rome all the time. But there are some obvious parallels.

While the causes of the decline of republican government and Rome’s eventual transition to one-man rule were doubtless complex, there is broad consensus among historians that a key factor was the emergence of extreme inequality. A handful of men became incredibly wealthy from the spoils of Rome’s eastern conquests, and their wealth and power eventually became too great for the rules of constitutional, republican government to contain. Sound uncomfortably familiar?

The death throes of the Republic went on for many years. Politicians declared their rivals enemies of the state, deployed violent gangs to disrupt the rule of law, established temporary dictatorships, and more. The installation of Augustus as emperor in 27 BC was just the final act.

And during this long twilight of constitutional government, one of the ways the extremely wealthy and powerful sought both to demonstrate their wealth and to curry favor with the mob was by sponsoring gladiatorial games.