Why Income Inequality Benefits Republicans

            Almost every problem our country faces can be traced to economic inequality.  It distorts our politics and makes it harder to reach the more equitable society we say we want.

            Political scholars Nolan McCarty and Boris Shor have just published a paper with economist John Voorheis with a potential description of the mechanism that makes it harder to reach consensus decisions.  They show that increasing levels of economic inequality simultaneously increase the level of political polarization in state legislatures while also making them more conservative.

            When there is a large degree of economic inequality within a state legislative district, they argue, the legislators elected from that district become more conservative, perhaps because the wealthy people in the district gain more influence.

            When there is a lot of economic inequality between legislative districts in a state, the legislators become more liberal, they say, because there may be greater demands for redistribution.

            Apparently what is happening is that as income inequality grows, centrist Democratic legislators begin to lose elections to Republicans.  As more Republicans take their seats in the state legislatures, the moderating influence of the centrists disappears.  That leaves the more liberal Democrats in place, making the remaining Democratic group more liberal, on average, than before.

            You can see how this works in Table 1.  Imagine that a state legislature, before the election, has 10 Democrats, and then after the election, it has only 7.  Suppose, also, that we can arrange the legislators along an ideological continuum that runs from 1 to 10 with 1 being the most conservative and 10 the most liberal.

Table 1

Legislator	Ideology Score
1	5
2	6
3	7
4	8
5	8
6	8
7	9
8	9
9	10
10	10
Ideological Average	8.00

            Now suppose that legislators 1, 2 and 3 lose their elections to Republicans.  The ideological average of the group of surviving Democratic legislators grows from 8.00 to 8.86.

            Even if the new Republican legislators have ideologies that are equal to the average ideology score of the legislature’s Republican caucus, the mere fact that the Democratic caucus is now more liberal will increase the ideological distance between the two parties.  The ideological distance will increase even more if the people who defeated the incumbent Democrats are more conservative than the incumbent Republicans.

            Increased polarization is likely to increase rancor between the legislative majority and the legislative minority, and it becomes less likely that the two parties will be able to find common ground.

            The authors suggest that these effects reduce “both the appetite and ability of state legislatures to engage in redistribution, which in turn further increases income inequality.”  The appetite for redistribution diminishes because there are more Republicans who favor the discipline of the market.  The ability to pass redistributive legislation decreases because polarization often leads to legislative gridlock.

            Of course, control of economic policy is not all that is at stake in any state legislative election.  The party that controls the legislature also controls the rules governing elections.  A party that finds itself in control of a state’s government when redistricting is on the table has an opportunity to entrench itself in power by redrawing state legislative districts to its own benefit.  It can also reshape the rules to make it easier for its own voters to reach the polls on Election Day, or, perhaps more to the point, to make it harder for the other party’s voters to vote.

            And because state legislatures also establish the boundaries of Congressional districts, state level and district level income inequality influences who gets elected to the House of Representatives as well.

            If all of these things are happening, things can’t help but get worse.  And, in fact, according to the paper, since 2008, they have.

            What the authors don’t explain is why income inequality tends to hurt the electoral prospects of Democrats in the first place.  One possibility is that economic inequality reduces the level of generalized trust required to keep a society functioning smoothly.  As generalized trust diminishes, voters become less and less willing to agree to greater redistribution, and politicians promising less redistribution benefit.

            But another possibility is that as a nation, we have simply sorted ourselves into places where our neighbors are more like us than they are different.  It could be that wealthy folk simply prefer to live in areas with other wealthy folk, and that once an area reaches a level where inequality is high enough, they have sufficient resources to dominate the politics of the area even if they are a numerical minority.

            Voorheis, McCarty and Shor, paint an ugly but informative picture of a vicious cycle.  If there is anything to save us, it is the populist stirrings we’re hearing from virtually all of the presidential candidates from both parties. We can only hope that it is the real populism that arises from discussions around kitchen tables and backyard fences, and not the faux populism manufactured by K Street and Madison Avenue at the behest of Wall Street.