Can a tiny but immensely wealthy minority keep economic policies in place that favor them at the expense of the public, and at the same time prevent much needed economic reforms that threaten their power?
Indeed they can -- arguably, it's what the opponents of President Obama's New Deal-like policies are trying to do right now. This small segment of society has been effective at delaying economic changes repeatedly throughout the modern era and especially since the start of the Reagan presidency in 1981.
The stewards of intransigence . . .
Don't misunderstand: of course, today's economic conservatives, market absolutists, and others who generally but not always oppose federal spending (except defense spending) are not the same people who opposed President Roosevelt's New Deal policies decades ago. But they do fit the income, wealth and interest group profile of the anti-New Dealers of the 1930s.
How are these economic conservatives able to thwart economic change? One way is through the U.S.'s system of representative government. The U.S. Senate, in case one hasn't noticed, contains a bias in favor of rural residents. That was part of one compromise the Founder Fathers passed as part of an agreement with low-population states (then colonies) to establish one legislative chamber based on colony existence, the Senate, and another legislative chamber based on proportionate representation, the U.S. House of Representatives.
However, because wealthier, and often more conservative citizens are more likely to live in rural areas, that would mean that if conservatives controlled 10 or 15 low to moderate population states, upper income groups could receive representation in the Senate far disproportionate to their numbers -- and in fact this has been the case since the dawn of the nation.
In short, even if your group is just a small slice of society -- say 20 or 30 percent -- so long as your group's interests are aligned with 30 or 35 Senators, you can block the will of the majority -- the will of the people -- routinely.
It seems implausible, even anti-democratic, that 30% or even as little as 20% of Americans can oppose the economic policies favored by 70% or even 80% of the nation, but this happens all the time in the U.S. It's one major reason (but not the only reason) the United States is so far behind comparable European states on such issues like universal health care, energy policy, education funding, and a host of other economic issues.
So, if from the above you've concluded that the U.S.'s form of representation is status quo-oriented, and makes economic change and public policy initiations and reforms difficult, you're correct. In the states, you could have a majority on an economic issue for decades and see no action whatsoever on your issue. In the states, the road to economic reform failure is paved with populists with good intentions. But good intentions aren't enough. A majority backing your side routinely is not enough. Often, what it takes is all of the above, plus even more members to support your coalition, and a major crisis as well. And that's still not a guarantee you'll succeed.
. . . are overwhelmed by the forces for change
Nevertheless, the reality is that even in the status quo- and current stakeholder-oriented United States, sometimes a large majority -- a super-majority -- is able to break through, and economic and social change becomes law, and society advances. And sometimes the economic change is huge: Pure Food and Drug Act of 1906, Social Security, Fair Labor Standards Act of 1938, G.I. Bill, Medicare, land grants for colleges, student loans, the balanced budget act of 1993, among others.
Regarding the current economic landscape, the United States appears to have entered another period where economic change will occur. President Obama's coalition is sizable and getting larger. There are two problems out there called 'the economy' and 'the financial system." Obama and the Democrats appear to be building that rare, super-majoritarian support needed to implement economic change -- change that will benefit the typical person and strengthen the U.S. economy. And if Obama is able to do so, it will represent an economic and a civilizational advance.
Financial Editor Joseph Lazzaro is writing a book on the U.S. Presidency and the U.S. economy.
Fundamental economic change may be coming to the US