Political Economist Robert Reich Speaks About Money and Democracy

September 16, 2015

Political economist and self-proclaimed “class worrier” Robert Reich warned last week in a lecture at UT that widening political and economic inequality meant that the U.S. would soon have to choose between either authoritarianism or reform.

In an auditorium filled to capacity with people ages 18 to 80, Reich said the economic and political changes that are facing the U.S. heading into the 2016 presidential election during the Liz Carpenter Lecture, hosted by the Plan II Honors Program. Reich, who has advised three different U.S. presidents, spoke about diverse topics ranging from baby boomers to political polarization.

The three most important factors affecting economic change in the U.S., according to Reich, are global competition, job loss by technological change and demographic shifts in a retiring workforce.

“‘What’s happening to the structure of the economy over time’ and ‘who gets what in the economy’ are very often not addressed in the press because we don’t understand it well,” he said. “But we live with those two fundamental questions.”

Reich said that since the 1970s, the U.S. economy has doubled in size, while the wages of most workers has barely increased. According to the Economic Policy Institute, economic productivity has increased by 37 percent since 1995, while the median wage of college graduates increased by only 14 percent, and that of high school graduates only increased by 4 percent.

“When you look at the median wage, you see that there has been very little change,” Reich said. “And how can that be, when the economy is twice as large as it was before? Where did all the money go?”

As he eased the topic towards the political implications of economic inequality, he named anger and disenchantment with political institutions as a cause of political polarization in recent history.

“That anger is so easily transmogrified into scapegoating,” he said. “The scapegoating potentially never ends, but it makes people angry, and it puts people against one another.”

Plan II Honors professor Bruce Buchanan agreed that polarization results from people angry at each other, and said that it is to blame for alienating independent and moderate voters. According to data from the FEC, voter turnout has been decreasing over the past century.

“We have rarely had an election with over 60 percent participation since the 1960s,” Buchanan said about national presidential elections.

Reich said that the younger generation is “very committed to public service” in the form of rights movements and activism, but is cynical toward politics.

“But politics is one of the noblest forms of public service,” he said. “Positive social change cannot be divorced from politics. We need fewer complainers and more doers, more activists.”

One solution that Reich suggested for making the democratic process more fair and appealing to ordinary voters is “getting big money out of politics,” or limiting the amount that special interest groups, organizations and large corporations can donate to campaigns.

Reich said that this connection between money and political power going “to the top” is a problem for a democracy.

“We have a choice,” he said. “We can either have great wealth in the hands of a few, or we can have a democracy, but we can’t have both.”

He concluded his speech by addressing the political turning point he said the U.S. is approaching as inequality grows.

“When people are deeply angry, disenchanted, feel like the game is rigged, and that they can’t get ahead no matter how hard they work, they can go one of two directions,” Reich said. “They can move toward authoritarianism, or they can move toward reform. I, for one, hope we choose the path we have chosen several times before, and that is fundamental reform.”

Reich said that reform is possible if voters are willing to “mobilize” and work together toward change.

“The degree of inequality of income, wealth and political power is reaching a crisis point,” he said. “We could move toward reform. We could move toward a new system that works for most people, rather than for a minority at the top.”

This article was written for J311F: Reporting Words during the fall of 2015.

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