Democracy Benefits Only The Middle Class

Dr. Michael LaitmanIn the News (Opinion, Daron Acemoglu, American economist, currently the Elizabeth and James Killian Professor of Economics at MIT): “In this paper we revisit the relationship between democracy, redistribution and inequality. We first explain the theoretical reasons why democracy is expected to increase redistribution and reduce inequality, and why this expectation may fail to be realized when democracy is captured by the richer segments of the population; when it caters to the preferences of the middle class; or when it opens up disequalizing opportunities to segments of the population previously excluded from such activities, thus exacerbating inequality among a large part of the population. We then provide new and systematic reduced-form evidence on the dynamic impact of democracy on various outcomes. Our findings indicate that there is a significant and robust effect of democracy on tax revenues as a fraction of GDP, but no robust impact on inequality. We also find that democracy is associated with an increase in secondary schooling and a more rapid structural transformation. Finally, we provide some evidence suggesting that inequality tends to increase after democratization when the economy has already undergone significant structural transformation, when land inequality is high, and when the gap between the middle class and the poor is small. All of these are broadly consistent with a view that is different from the traditional median voter model of democratic redistribution: democracy does not lead to a uniform decline in post-tax inequality, but can result in changes in fiscal redistribution and economic structure that have ambiguous effects on inequality.”

My Comment: Today, during the fall and disappearance of the middle class, the hope of the American dream, the gap between the rich and poor is widening. Consequently, the concept of democracy increasingly appears as purely theoretical. There is a growing need for a new form of society with equal distribution, rational production and consumption, and experiencing happiness in connection.

Related Material:
Democracy, The Rule Of The Spiritual Nation
“A Democracy Is Always Temporary In Nature”
Kindergarten Democracy

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