It’s Not the Greed—It’s the Inequality

The Democratic Party’s establishment is in denial about the ways in which concentrated riches are warping society and contributing to the disunity it seeks to heal.

Carlo Allegri / Reuters

Deval Patrick is in. The former Massachusetts governor, responding to the fears of the Democratic establishment that the party’s aspirants are too left-wing and that its moderate standard-bearer, Joe Biden, is not up to the task of defeating Donald Trump, announced his candidacy for president in a video Thursday.

After filing for the primary in New Hampshire, Patrick told reporters, “I think we have to be about how we bring people in, how we bring people along, and how we yield to the possibility that somebody else or even some other party may have a good idea, as good or better than our own … That’s the kind of leadership I have brought to settings in the private sector and the public sector, the kind of leadership I want to bring right now.”

But perhaps the most telling of Patrick’s remarks Thursday came later. “I don’t think that wealth is the problem,” he said. “I think greed is the problem.”

Patrick joined Bain Capital, the private-equity firm co-founded by the 2012 Republican presidential candidate Mitt Romney, after he left politics. He fulfills the hopes of those members of the Democratic establishment seeking a post-racial unifier who, unlike Bernie Sanders and Elizabeth Warren, isn’t inclined to soak the rich. But Patrick’s claim that America’s divisions are unconnected to levels of income inequality unseen since the Gilded Age is profoundly naive. Partisan polarization, and the vitriol that accompanies it, is closely tied to the politics of artificial scarcity that entrenched concentrations of wealth create.

In the December issue of The Atlantic, I wrote about how the yearning for reconciliation and an end to conflict between northern and southern whites after the Civil War paved the way for a retreat from the all too brief attempt to create a multiracial democracy known as Reconstruction. After the Republicans abandoned their black constituency in the South, it would be another century before America committed to equal rights for all. As the historian David Blight has documented, a bipartisan commitment to white supremacy would cement sectional reunion.

But if white supremacy provided the adhesive, economic factors would provide the incentive. At the close of the Civil War, the Republican Party functioned as an uneasy multiracial coalition among moderates and conservatives committed to a pro-capitalist, free-labor ideology; proto-progressives such as Thaddeus Stevens, who sought an activist state to even the playing field between the haves and have-nots; and black workers in the South who understood that implacable white opposition to their rights could not be ameliorated without government intervention.

By 1872, many conservatives and moderates had already turned against Reconstruction, concluding that it had mistakenly placed ignorant freedmen with no understanding of liberty and self-government at the helm of corrupt southern governments. These Republicans backed the Liberal Republican Horace Greeley’s candidacy for president against incumbent Republican President Ulysses S. Grant, having come to believe that, as the historian Heather Cox Richardson put it in The Death of Reconstruction, “disaffected African-American workers were trying to control the government in order to gain through legislation what others had earned through hard work.”

The Panic of 1873 would only exacerbate those fears. Although Grant prevailed in 1872, the Liberal Republican case against Reconstruction had gravely weakened northern white support for the project. And although slavery was anathema to the free-labor ideal, so too were northern workers’ ever louder demands for income redistribution and economic regulation. That growing fear of, and contempt for, northern workers fit neatly with the belief that Reconstruction had gone too far. “Class and racial prejudices reinforced one another,” the historian Eric Foner wrote in Reconstruction, “as the reformers’ concern with distancing themselves from the lower orders at home went hand in hand with a growing insensitivity to the egalitarian aspirations of the former slaves.”

The Panic of 1873 and the subsequent economic collapse not only led to the Democrats seizing the House for the first time since the Civil War; it produced a growing labor radicalism that confirmed moderate and conservative Republicans’ fear that democracy itself was threatened by the unwashed masses using government to take what their betters had earned.

Just as the 2008 recession ushered in the election of the first black president, a subsequent white backlash, and a rebirth of left-wing populism led by figures such as Warren and Sanders, the economic hardships of the late 1870s inspired both worker activism and racist retrenchment. In times of economic hardship, it was not a difficult matter to discredit Reconstruction as an attempt to raise ignorant black laborers above white men who were entrepreneurial, responsible, and refined. Nor was it difficult to justify government intervention on behalf of Big Business while condemning such intervention on behalf of workers. The rich, after all, had earned it, or they wouldn’t be rich.

Foner documents how former antislavery figures such as Horace White of the Chicago Tribune “condemned agrarian and labor organizations for initiating ‘a communistic war upon vested rights and property,’ and insisted that universal suffrage had ‘cheapened the ballot’ by throwing political power into the hands of those influenced by the ‘harangues of demagogues.’” Antislavery publications such as The Nation “linked the Northern poor and Southern freedmen as members of a dangerous new ‘proletariat’ as different ‘from the population by which the Republic was founded, as if they belonged to a foreign nation.’” With Reconstruction ended, capital took advantage of the stability of its aftermath to expand convict leasing, a new regime of forced labor that white southerners would impose to replace slavery and keep the region’s black labor force captive and subordinate. Big industries—lumber, railroads, mining, and others—would take eager advantage of this system of neo-slavery to boost their profit margins.

The end of Reconstruction coincided with the Republican retreat from civil rights. But that retreat was precipitated by deep-seated fears over workers in the North and South seeking labor reform, income redistribution, and regulation of industry. “The South sensed the willingness of Big Business, threatened by liberal revolt, labor upheaval and state interference, to make new alliance with organized Southern capital if assured that the tariff, banks and national debt, and above all, the new freedom of corporations, would not be subjected to mass attack,” wrote W. E. B. Du Bois in Black Reconstruction in America. “Such a double bargain was more than agreeable to Southern leaders.” Racism not only threatens democracy and prosperity; it accrues tremendous benefits for those already leading lives of plenty.

America’s political parties are now as polarized as they were at the end of Reconstruction. And just as at the end of Reconstruction, a multiracial party whose ranks include both frustrated workers and wealthy capitalists finds itself at a crossroads, with no certain options for healing the nation’s divides or its own. As ever, America’s gilded class regards the possibility of higher taxes and redistribution as a greater threat than a resurgent racist authoritarianism that imperils America’s still-young experiment in multiracial democracy. The latter, after all, does not jeopardize its profits.

Into this divide steps Patrick, a man who went from poverty on Chicago’s South Side to the heights of both business and politics, practically an avatar of the old free-labor ideal that animated the 19th-century Republican Party, an ideal whose blindness to how concentrations of wealth warp politics and society leaves it ill-equipped to deal with the threats to democracy and prosperity America currently faces. The paradox for Democrats is that the candidates who understand this appear less likely to prevail in the general election, and those who have yet to grasp it may be better positioned to unseat the president.

In Polarized America, Nolan McCarty, Keith Poole, and Howard Rosenthal argue that economic inequality and polarization reinforce each other. Economic suffering and ideology foment anger toward minorities, who are blamed for that economic suffering. The very wealthy exploit those divisions to sustain their streams of income, which in turn makes it less likely that redistributive legislation addressing that economic suffering can be passed.

In the past, swings of political fortune have restored balance. But the alignment of the parties along cultural, racial, and religious lines, and the geographical distribution of those divisions, have allowed the wealthy to exploit cultural resentments and counter-majoritarian choke points in the American system to sustain a destructive stalemate.

“Inequality and polarization are self-reinforcing,” McCarty told me. “The ideological polarization produces upward-redistributive policies or no policies, which exacerbates inequality.” As my colleague Annie Lowrey has written, “Inequality is now driving a longevity gap, an educational-attainment gap, and a health gap. It lurks behind the country’s falling entrepreneurship rate, too. The country will not prosper through growth alone, but only through sharing its prosperity more widely.” Neither the polarization that afflicts American politics, nor the economic hardships that income inequality produces, can be alleviated without the wealthy sharing the bounty they could not possess absent the hard work of those who continue to suffer.

Laws cannot purge greed from the hearts of men and women any more than they can purge racism. But just as civil-rights laws can address the material effects of discrimination, so, too, can public policy ameliorate the politics of false scarcity that helps turn Americans against one another. But those who would seek to resolve these conflicts must recognize that the rise of Trumpism and income inequality are linked—and Patrick’s opening announcement, and his role as an avatar of the Democratic establishment, suggest neither he nor his benefactors are capable of doing so.

Greed will always plague humanity, but Gilded Age levels of income inequality are a choice. Any politics of unity that fails to deal with that fact will ultimately fail.