Following her inauguration as Cornell’s 13th president, Elizabeth Garrett moderated a faculty panel on the challenges inequality poses for democratic institutions Sept. 18 in Bailey Hall.
“Income inequality has long plagued the developing world, and it is growing at an alarming pace in long-established economies and democracies,” Garrett said. “Income inequality in the U.S. has been increasing since the 1970s, and it has now reached levels not seen since 1928. The wealth gap between the high-income group and everyone else … is at a record high.”
“Those lacking jobs, education and resources are essentially voiceless in the [democratic] process,” she said.
Suzanne Mettler, author of “Degrees of Inequality” and the Clinton Rossiter Professor of American Institutions, said, “The United States is a real outlier today among affluent nations – we have the greatest amount of inequality… [and] we do much less through public policy to try to mitigate these inequalities.”
One reason is the polarization of political parties in recent decades, she said. “Elections have become very competitive in terms of who’s in control of Congress, so the parties are working very hard to try to beat the other at each election – and not to give an inch for public policy. That polarization creates great stalemate and gridlock, and that’s one of the big reasons why we are not creating public policies to mitigate inequality better.”
A second reason is that “there is more money in politics,” she said. “The amount spent on political campaigns has doubled … in just a couple of decades. The amount spent on lobbying has doubled just between 2000 and 2010. … I think the voice of ordinary citizens is becoming less heard, and what could be called plutocracy is really holding the day.”
Gerald Torres, the Jane M.G. Foster Professor of Law, said that one of inequality’s impacts “is it’s permitted the privatization of things we used to think of as public. One of the great slow-moving tragedies of the last two generations in California has been the complete dismantling of what used to be the greatest public school system in the world. That’s being replaced by a system of private schools.” Prisons also are being privatized nationwide, he said, and “the fastest growing housing systems in the country are gated communities and mobile homes.”
Historian Nick Salvatore, the Maurice and Hinda Neufield Founders Professor of Industrial and Labor Relations, said disparities in wealth in early 20th century America produced “a tension that is not that different from what we have now, although it was better organized politically.” The Socialist Party of that period, he said, defined socialism less in terms of Karl Marx than “of broad understandings of American fairness and … equality.”
The party was politically viable, because it “was able to speak in a language of democratic polity and a set of values that needed to be applied to an economic arena,” Salvatore said. “Themes of individualism, opportunity, the sense of the ability to advance, were a powerful element. … Vis-a-vis today, the issue becomes, where is the organized force, where is the organized approach to dealing with these questions?”
Torres later commented on social movements in the U.S., saying that 83 million people, working in small groups, had “actually taken action to address climate change. … The question is how you take these local movements and pull them together to make a social movement?”
Robert Frank, professor of economics and the Henrietta Johnson Louis Professor of Management, said his main concern with the increase in income inequality is “the practical wastefulness of the spending patterns that have emerged as a result.” For those in the top 1 percent, he said, “you’re not a bad person if you spend more on your daughter’s wedding or on the size of your house that you live in – that’s what everyone does when they get more money.”
But for those just below the top income bracket, “that changes their frame of reference that defines what they feel they need … We’ve seen a cascade of spending induced by the higher income and spending at the top, so that now the median house in the U.S. as of 2007 was 2,300 square feet, in 1980 it had been only 1,700 square feet. The median family isn’t earning significantly more. Why are they spending so much more? Because people like them are spending more. … [and] around the world, it’s the more expensive neighborhoods that are served by the better schools.”
Eswar Prasad, the Tolani Senior Professor of Trade Policy, said that globally, in economic terms, “countries like China, India and Brazil have done very well. About three decades ago, China’s per capita income used to be 2 percent that of the U.S. [and is now] one-seventh that of the U.S., or 14 percent. But there, the good news stops. Within every country, inequality has risen very sharply.”
“When you have a rising tide that doesn’t lift all boats, but leaves the small boats either stuck in the mud or barely rising, and the 90-foot yachts are the only ones rising, that starts eroding the very thing that allows a democratic system to function well,” Prasad said.
Prasad also said, “Policies that are intended to help ease inequality sometimes have the opposite effect.”
“For democratic communities to be healthy and vibrant, they need to have shared values that bind them together,” which in America have included “beliefs in opportunity and in fairness,” Gretchen Ritter ’83, the Harold Tanner Dean of Arts and Sciences, said in her introduction. “If a large section of our community no longer sees social opportunity as a meaningful reality for themselves or their children, then their stake in the country’s future is likely to be eroded.”
Garrett ended the panel acknowledging the complexities of the problems – and the solutions. “The way I think we get traction on it is as an academic community talking seriously about these issues, listening to each other respectfully, as we did today.”