Tuesday, March 9, 2010

Wealth and Democracy

Seeing the anniversary of Adam Smith's The Wealth of Nations brought to mind Kevin Phillips' Wealth and Democracy, in which he demonstrates that the rise of wealth has led to a corresponding decline in democracy,

In the Phillips theory, economic and political forces in the U.S. and other countries have repeatedly generated periods featuring speculative bubbles, political scandals, bursts of inflation and deflation, and voter revolts. The excesses of America's free market and moneybags democracy in particular make the pattern re-occur in intense series of booms and busts. Phillips identifies three distinct U.S. historical cycles--we are at the end of the third--in which the egalitarian policies of moderate GOP Presidents Abraham Lincoln, William McKinley, and Richard M. Nixon get replaced "conclusively by the language of Wall Street, Darwinism, and tax-cut worship." The result each time has been a greater concentration of wealth and power at the top.


  1. I don't know how much an "egalitarian" Nixon, or for that matter McKinley, was. I think their administrations both suffered under recessions, otherwise they would have been as speculative as any other Republican administration.

  2. This might make for a very good discussion given recent events.