Are Democracy and economic equality fundamentally incompatible?

[Mr Khan]

freedquaker said:

PDF said:

freedquaker said:
I am an economics Professor, and I only have this to say :

Democracy has nothing to do with economic equality. Democracy is not an economic system, so the question is flawed to begin with. However, if you would change the question to ;

"Is capitalism incompatible with economic equality?"

Then the theoretical answer would be yes, they are incompatible. However, an economic system creating a perfect income equality is neither possible nor desirable. So this "incompatibility" does not automatically render capitalism wrong. But what kind of economic system do people want? This is where capitalism conflicts a social democracy (with more of a humanitarian view) :

Social Democracy wants :
a) Equal fundamental access & opportunities to broadly defined rights, regardless of income or status
b) Equally distributed or proportional public responsibilities and rights
c) Active State reflecting the social conscious
d) Heavily regulated market system
e) Earnings based on "worth", and "social value" etc...
etc...

Capitalistic Economy wants
a) Equal capability for entrepreneurship, market and funding access,
b) Self correcting and operating efficient market system
c) Non-disturbing and low level of taxation
d) Near complete private ownership, with state serving only as a regulatory body
e) Free floating and deregulated market system
f) Earnings based on "demand & supply"
etc...

Both of those systems are inherently utopia. Neither of them produces perfect equality or inequality. Social democracy is not socialism because there are well functioning markets with a large but minority share of state operating. The IN*equality will also be much smaller in a social democracy.

The question is, "Is pure capitalism really possible?"... Current experiences disagree. Kuznets famous inverse U shape inequality patterns are not observed and inequality in US (one of the last bastions of pure capitalism) has been increasing tremendously; especially the wealth inequality (Gini > 80%). This is basically unsustainable.

So there you have it. Capitalism in its pure form is incompatible with democracy, just like socialism was an unnatural unsustainable regime. However, democracy with "domesticated" social capitalistic policies seem to be not only very much possible but also lucrative and sustainable.

This is not meant to be a question of Capitalism compatibility with economic equality.  It is meant to be a question of demmocracy effect.  It was proposed by my Professor.  It would be fair to say that democratic government would most likely lead to capitalism.  Which in turn would lead to economic inequality.

This is much more about a quesiton of the electorate and whether they would push for economic equality as a tenate of democracy.  Democracy, along with universal suffrage was designed to give people equality under the law.  Is it concievable that people would push for further equality?  As economic inequality grows and more of the electorate could fall into lower class.  Is it possible they could elect politicians with the goal of leveling the playing field?

added an edit in the OP

The ANSWER to your question is VERY TANGLED UP; and I don't believe we do even know it yet as humans. But there are certain results that may lead to a better understanding...

Democracy IS compatible with capitalism. There is no such country on earth with pure capitalism & democracy. US is neither. The US economy is more capitalistic than pretty much all else but, the state is TOO LARGE, not because of social democracy but because of inflated healthcare, military expenditures and endless other institutions with big budgets. US is also not a true democracy either as there has been practically only 2 parties forever (I am really dumbfounded by the politicians who export democracy to others while we don't have real democracy right here!).

Democracy is compatible with (but not a guarantor for) economic institutions which promote growth, development, freedom, and innovation. Empirical studies show, however, some dictatorships are better at economic growth & development, while some others lag substantially. On the average, there is not much correlation between democracy and economic growth & development, meaning democracy is neutral (but compatible). On the other hand, there is a strict positive with social development and democracy, although with huge variations. In other words, democracy is correlated with development but the implementation varies a lot, and it does not guarantee success.

Finally Democracy doesn't say much about income inequality. However, one might argue, from an egalitarian perspective that the democractic rights of people may mandate equality beyond what capitalism readily offers. In that sense, "pure capitalism" might be at odds with democracy. Personally I wouldn't consider this "incompatible", but "not entirely compatible" so "must be adjusted", which is what exactly the European Social Democracies do, sometimes a bit too much.

There is both correlation and causation, but in reverse. Economic growth and development usually leads to democracy, which is why the "well-intentioned" dictatorships always fall in time, because they spend their time educating their people and building infrastructure and putting the people to work, compared with third-world plutocracies that are just interested in lining their own pockets. More educated people who have time in their lives for something other than just living a hand-to-mouth existence.

Relative levels of economic equality also help decrease tensions between the classes in society. In a highly unequal society, where the wealthy might be in the 21st century but the poor are still in the 18th century, the wealthy are going to fear the poor due to the great degree of "otherness", or the poor will resent the wealthy for having basic things that the poor will never see. This can get exacerbated when the lines are drawn along racial or ethnic boundaries (why, for instance, everyone assumed that Apartheid would end in a bloodbath one way or another, huge inequality enforced along easily discernable lines), so economic inequality will lead to the conditions of dictatorship, either a military coup d'etat usually for the upper class seizing power, fascism if the yeoman class seizes power, or Bolshevism if the underclass takes power by force.

Generally democracies cannot exist without a degree of prosperity and equality. Countries like India, which retain stability while having massive inequality still, are very much the exception rather than the rule.