THE BLOG
01/10/2014 11:59 am ET | Updated Mar 12, 2014

Mass Affluence and the Politics of Inequality

Economic inequality has become a prime issue of political discussion over recent years. As Lincoln Mitchell stated in a recent article here at The Huffington Post: "2013 was the year where issues of income inequality, raised by the Occupy Movement in 2011, stressed by Pope Francis and, belatedly, by President Obama finally came to the fore of American politics."

Mitchell's article thoughtfully discusses the difference between issues of poverty and inequality, namely the extent to which the inequality debate can lead to more controversy because of its emphasis on critiquing the general structure of the economy. While most people will agree that poverty is a social problem, though they may disagree on how to address that problem, there isn't necessarily a consensus on whether inequality is in itself a social problem. This is particularly true when people analyze how certain examples of inequality arise. For example, inequality that arises from someone creating a better product that is freely chosen in the marketplace and getting rich from that creation generally doesn't rankle in the same way as wealth generated via crony capitalism or kleptocracy. One can call this the Steve Jobs example of capitalism. This is a good thing, as there is (or should be) a difference between concern over the distortive effects of extreme economic inequality, such as its effects on whose interests are focused on and catered to by our national political leadership, versus simple class envy or resentment of the wealthy.

But there's another factor that affects this discussion. There's a famous quote attributed to John Steinbeck that says: "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." Whether this quote is accurate or not, this attitude has its merits. Hope Yen recently wrote in an Associated Press piece that:

Fully 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America's economy and politics...Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners. Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20 percent of earners.

20 percent of the U.S. adult population isn't everyone, but it is a nontrivial portion of the population. Much of the inequality debate has emphasized situations in which affluent or middle-class people have found themselves in dire financial straits. That is a serious problem that can't be ignored and needs to be addressed (those who struggle financially still outnumber the mass affluent), but the Associated Press article shows that the reverse can be true as well. If a few years of penury can affect one's worldview for life or cause others to say "there but for the grace of God go I", a few years of wealth can do the same.

This phenomenon of mass affluence shouldn't lead to complacency or the mistaken view that there are not structural problems with the U.S. economy, particularly in the aftermath (if we have made it to the aftermath) of the Great Recession. But progressives need to keep the nature of this mass affluence in mind as we respond to such problems and discuss the issue of inequality, because simply saying that inequality is a problem in itself not only ignores the inevitable distribution of wealth that occurs in a working market economy (and by that I mean a market economy that has a strong regulatory and managerial state in it, along the Hamiltonian lines that are a longstanding part of American economic history) but the actual lived experiences of millions of Americans who have worked hard and become successful. Mass affluence is just as much a part of our economic structure as poverty and progressives must acknowledge and incorporate that affluence in their policymaking if we want to win and maintain support among that portion of America's population and to incorporate them into the sort of broader political coalitions that leaders like Franklin Roosevelt and Bill Clinton were able to create in the past.