“Basic models of political economy hold that inequality self corrects. As income concentrates among a smaller group of voters, majorities will vote for more redistribution.” according to Eduardo Porter of the New York Times in a recent Economic Scene column, “But this isn’t quite how the world works.”
Porter goes on to explain that rich people vote more than poor people. He states that poor people don’t vote according to their economic interests (as Porter may suppose them) but according to beliefs such as mistrust in government, support of free markets, etc. He explains that rich people bring their wealth to bear on the political process, reinforcing, with government power, the trends toward greater income inequality. He draws a parallel between our own age and that of the progressive era when schism broke out between the “upper middle class” and the wealthiest. He darkly suggestions that only an existential threat such as World War II can force the public to demand and the super-wealthy to accept substantive redistribution of wealth.
Porter seems to assume that majority rule by some sort of voting process is somehow basic to political economy. Such a condition is so unusual in human history and in the contemporary world that it cannot possibly be basic to political economy.
However, in his account of how the world really works, Porter has outlined the heart of a more realistic and useful model of political economics. In the real world, three broadly defined factors determine actual outcomes: beliefs, threats of destruction, and benefits of production.
The broad categories interact with each other. The power of any factor is interchangeable with another at some rate of exchange. Beliefs can mobilize destruction and production. Productive power can buy destructive power and the means to influence belief. The means of destruction can be deployed to defend, seize, or destroy the means of production and to alter the dynamics of belief.
By gaging the strength and distribution of the factors, one can forecast outcomes or at least sense the direction of movement. Distribution of the means of all factors, particularly the means of destruction, is not as concentrated as many people assume. Today, realistic political economics is as much an art as science, but many elements are truly scientific and data-driven.
If you are an activist who wants to really influence outcomes, you can seldom expect things in political economics to “self-correct.” You should deploy your means of action with an understanding of how the world works.